Most everyone is having a difficult time these days with his or her finances. Some people are so far behind with their bills that they are choosing to file for bankruptcy, while many others are choosing debt consolidation to help them get back on the right track. There are many ways to get back on your feet so to speak if you are in financial strains. Personally I do not think that debt consolidation is the best way to do it.
It is a myth to think that debt consolidation is going to save you interest and that you will have one smaller payment. The fact is, is that debt consolidation is pretty dangerous because you are basically only the symptom of why you got into this financial mess in the first place.
Debt consolidation is basically a way of sweeping under the rug so to speak all the issues you are struggling with financially. The debt has not disappeared once you have gone through the consolidation process, it is still there and sometimes it is worse than it was before you consolidated.
The debt consolidation companies know that you are in financial trouble, and they are there to take advantage of that fact. They are basically in the process as a middle man and they are most interested in how much money they can make off of your problems.
Many people will fall into the debt consolidation trap because they are interested in having a lower interest rate and a lower payment. This sounds good to them because it will help them not to struggle each month with making payments. What they may not be aware of however, is that their payments only seem lower and the interest rate is lower because the terms of the loan have been extended to a longer time frame. This means that, sure the payments will be lower, but that the payments will be stretched out over a longer time frame, making the reality that they will be paying out more money in the long run. If many people knew that they would actually be paying more for what they have bought after they bought it, they wouldn’t buy it in the first place.
Basically debt consolidation is like saying for example a car is going to cost you $15,000 and after you are set up on a payment plan you will be paying a total of around $16,500 once all your payments are made. This is the norm and most people are fine with this. If you decided to put this into debt consolidation you would pay less each month and have a lower interest rate, sure, but you will end up paying well over $16,500 by the time you’re done.
Chicago Debt Solutions can help you start fresh with debt consolidation in Wheaton.
