We all have to take loans from various financial institutions to meet our different requirements of life and then we find it terrible to manage them and ensure that we are not defaulting on repaying them. It is not less than a nightmare to receive a notice from a company stating that you are due to pay them for a month wherein you have considered it to have already paid. Then you start checking your bank statements and you see so many payments made to a number of financial institutions that you get puzzled and end up running from pillar to post. The sad part is this is just not your story. It’s the story of every person in our country. At the time of taking loans, we perhaps do not realize that we need to keep a track of the payments and then we notices of this nature hits our doorstep, we tend to panic.
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Now let’s talk about the good part. How about if one can consolidate all his debts into one amount and then start paying a single amount every month instead of making multiple payments to various financial institutions. Well, this is just not an idea but very much practical in this real world. You can simply consolidate all your debts into one amount and then repay it in just one single instalment. Therefore debt consolidation is a process where one can consolidate the number of unsecured loans he has taken from various financial establishments into a single loan and repay them in the form of single monthly payment. You are also saved from paying high interest rates as that is being dropped drastically once you consolidate all your debts.
Let us understand how it works for us. There are 5 simple steps on the basis of which the debt consolidation thing works.
Free counselling:- Once you approach a debt consolidator with your financial statements, he’ll go through them and conduct a financial health check-up. They’ll ask you few questions based on your finances which will give them an idea if you’re in a total financial mess or you can still come out of it. After having gone through your financial reports, they will ask you to attend a free counselling session. There you’ll be given various tips on how you can get rid of the mess you’re in and become a debt free man. You may ask all your questions to them and can expect some great answers from them.
Sign the agreement:- Once you are completely convinced that you need to consolidate your debts, ask them to send over the written agreement to you. Please go through the agreement in details and understand each and every clause they have written there. If you’ve any questions, please call up the consolidator and clarify your doubts.
No collection calls:- You may inform the consolidator that you shouldn’t receive any calls from the creditors asking to repay the money. They should be handling such calls once you’ve enrolled for their service.
Follow their payment plan:- They will prepare a payment plan for you which will also be sent across to your creditors. You should follow the payment plan and things will fall in place for you.
Pay the consolidators:- The consolidators also shares the payment plan with your creditors and after convincing them for it, they start accepting the payments. The payments are then paid to your creditors. Hence, it’s important that you pay the consolidators without any defaults.
Thus by consolidating your debt, you can be relived of making multiple payments to your creditors and can also clear off your debt easily.
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