Understanding the process of debt consolidation
>> Nov 22, 2016
Commercial jargons can be
quite confusing for the common man. Even when the simplest of things is being
talked about, jargons can be so baffling that nothing can be made out of it. In
this article, we will try to clear the confusion at least for one particular
topic.
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The money market and the
commercial world are rife with such jargons that have almost become the word of
mouth. Yet not everybody can make sense of it. Many people can vaguely make out
what is being talked about by deciphering the name with the help of common
sense. However, the real meaning of the phrase in its technical sense remains
elusive and unknown. The most commonly
known term debt is annotated in several ways depending on the circumstances of
use. Read on to unravel the meaning of debt consolidation that you often hear
about.
In
simple terms
Debt consolidation meaning in
simple terms is the process of recouping finances. This term or phrase is
usually applicable in the area of personal finance. However, in many instances
it may be referred to bigger areas like government debt or corporate debt. When
an individual or company is neck deep in debts from various sources and does
not have the means of repayment, as a last gamble, he or she can think about
taking a bigger loan to pay of all or majority of outstanding debts. This is
particularly relevant for credit card debts and unpaid medical bills that can
keep spiraling.
Credit counseling agency
If you are happy to know the meaning of debt consolidation,
there is something more that you should know about its administration. This is a payment system that is based on
third party. The third party that manages the show is known as credit
counseling agency. How well the finances are managed and help to meet your
goals of debt repayment depends on the right selection of the third party that
is responsible for paying to the creditors. The credit counseling agency has
links with finance companies and can arrange for cheap loans at lower interest
rates. This ensures that the major part of money that you receive goes towards
the balance payment instead of being consumed as finance charges.
Is debt
consolidation meant for all?
The plan works well if your
balances are in unsecured debts like personal loans and credit cards. If you
owe on account of unpaid child support, unpaid taxes or even unpaid parking
tickets then this arrangement will not work. To avail this facility you have to
ensure that you have enough money to meet essential expenses as well as some
savings. Most importantly, you should have the capability to continue paying
for long term.
The best part of the arrangement is that you have to pay out
a fixed sum of money every month. There are no surprises whatsoever that can
make you trip. Once you make up your mind to avail the facility, discuss with a
counselor to make sure that it is the best option for you.
Read this also : Best debt consolidation loans
Read this also : Best debt consolidation loans
1 komentar:
Very well explained on Debt consolidation and a way out from the Debt trap. Thanks for sharing this information.
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