dcsimg

Debt Consolidation Needn't be a Mystery

By Stanley Rubenti
Mortgage Credit Problems Columnist


Featured Home Equity Loan Provider
    • Get your Free Quote in Minutes!
    • Lenders Compete for your Business
    • Lock in a Low Fixed Rate Before Rates Increase!
    • Do you have the Lowest Rate Possible? Find Out Instantly!
Financial independence is a major pillar of the "American dream," but for many people, this dream is perpetually out of reach. Medical bills, rent, credit card statements, car payments, and other loan notices seem to come nonstop. However, as annoying as these are, the real culprit is interest. Most consumers are at least vaguely familiar with the interest rates they carry on their credit cards and loans, but too few fully understand how devastating compound interest can be in the long run. If you find that your balances don't seem to get any smaller month after month, perhaps it's worth exploring what a debt consolidation loan can do for you and your financial future.

Debt Consolidation and Compound Interest

Believe it or not, debt consolidation can save you a fortune if you shop around for the right interest rate. Let's say that you currently have a $10,000 balance on your 20% APR credit card (or mortgage, student loan, etc.) and you are required to pay $200 a month. It would take you 106 months to pay this off in full, and you'll have paid an additional $11,200 in interest (this is in addition to the $10,000 balance you originally had). If you secure a debt consolidation loan of $10,000, with an interest rate of 10%, you could pay off everything in 65 months, and only fork over $3,000 in interest.

To review:
  • $10,000 balance on a 20% loan = $11,200 in interest over 106 months.
  • $10,000 balance on a 10% loan = $3,000 in interest over 65 months.
You end up saving more than $8,000. Wouldn't that kind of money bring you closer to financial independence?

Making the Most of Your Debt Consolidation Loan

If you are like most Americans, you probably have several credit cards, numerous medical bills, various types of student loans, car payments, and other interest bearing loans. If you can find a debt consolidation loan with a lower interest rate than your current loans you can consolidate them all into one convenient monthly payment. Don't let creditors become rich off of your hard work. Educate yourself, consolidate your loans, and carve out your piece of the American dream.

Solve any
debt problem here.

Start here: