Many Florida families and others around the nation are dealing with high levels of debt. Some may struggle to make ends meet each month. They often look for ways to improve their financial situation. If there is a manageable amount of debt, one option may be to transfer all debt to a low interest rate credit card. However, some consumers may seek a debt consolidation loan to alleviate financial stress.
A debt consolidation loan groups several debts together. Having a single payment each month often makes it more convenient for consumers to repay the loan. Because of this type of loan’s popularity, many companies have arisen that offer debt consolidations. The Consumer Financial Protection Bureau monitors these companies to help those using their services.
It is important for consumers to research the businesses since many of them only present themselves as debt consolidation companies. They are debt settlement companies instead. These entities may in fact negotiate a lower payment for a consumer. However, this can adversely impact someone’s credit score.
Debt consolidation is helpful to those who have not defaulted on any loans. The main goal for this type of loan is to reduce the amount of interest paid on a person’s total debt. The average debt for a family in this country is over $130,000, which results in roughly $1,300 in annual interest payments. Reducing the amount of interest in a debt consolidation loan can increase someone’s cash flow, allowing them to apply that money to overall debt.
Debt consolidation can be a viable option in a plan to improve someone’s finances. A Florida bankruptcy attorney can help clients evaluate their situations and develop a plan that meets their specific needs. An experienced lawyer will work to help individuals meet their financial goals.
Source: information-age.com, “How does debt consolidation work?“, Jon Sumner, Sept. 6, 2017