Myths About Debt Consolidation

Myths About Debt Consolidation

Debt consolidation is one activity that is slowly picking up pace in our country too. Western countries have been following this trend for some time now, and it has worked wonders for a lot of people over there. The process involves consolidating every debt that you have on you (excluding the personal ones) at one place, so that you only have to pay to one entity only (which also asks for a lower interest rate). This way, you are not only able to save yourself some bucks but are also able to lessen the burden from your shoulders.

There are several types of myths that are also ongoing about Debt Consolidation. It’s really not possible to tell where these originated from, but having incomplete information about them could really be harmful for an individual. Discussed below are a couple of myths from which everyone should refrain from.

All Debt Consolidation plans are same: Though they are not that different either, there are a number of factors that are not alike, and which determine the worth of a plan. One may need it to improve his credit rating, other may need it to meet his finances, or someone may need it to lessen his taxes, and more. You can consult with a credit counselor who would help you out with the best plan as per your needs.

You can get significant cut in interest rates: All the banks and lending companies today have a standardized interest rate, if not more. So, consolidating your debts may save you from paying separately and even a bit less, but expecting significant cut in your debt would be just like lying to yourself.

Private Agencies can help you cut down interest on debts: There is nothing that could be done to cut interest on your debts. Private agencies but show claims about this, but they will be offering only marginal reductions in the final amount, something which is offered under the best plan, which is also easily accessible to you. Moreover, these firms will have a charge on their services too, so you will ultimately end up paying even more than the regular charge.

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