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Mahomes Capital understands that life comes, and sometimes debt is inevitable. You can avoid high daily compound interest and save money for your future and your family with a Mahomes Capital debt consolidation loan for your unsecured debt.
Based on the reviews of Mahomes Capital clients, this simple step allows you to take control of your finances and save thousands of dollars over the course of your loan. It’s money that goes in your pockets – not your lenders or credit card companies.
Here’s an interesting thought; Have you ever wondered why your friend or coworker raves about debt consolidation and often sits stress-free despite the debt hanging over their shoulders? Well, this is because the accumulation of debt has its own peculiarities that require a sneaky exit. And credit card debt consolidation is one of those loopholes that can strengthen your financial situation and allow you to better pay off your stubborn debts.
We’ve all been struggling with debt at some point, especially as financing a particular lifestyle can get expensive day by day. This is something that should not be taken as an alarm. Why is that ? Well, because for every problem there is a viable and lasting solution. Here, debt consolidation is the answer which can solve all your debt and financing problems. Let’s break it down and get a more in-depth look at what this intriguing process really is.
Understanding financial terms can seem boring, confusing, and intimidating. But not when you have access to the right guide. To put it in layman’s terms, debt consolidation is as close to what the name suggests – it refers to merging or consolidating multiple high interest debts into one with a lower interest rate. People with generally high credit card bills choose this method to refinance their loans and pay their dues.
This leaves you in a better financial position to pay off your debts. But, it is important to remember that this process does not entirely eliminate your debt problems. Your original debt remains, the terms and conditions of its repayment are simply changed and adjusted to make life a little less stressful.
Debt consolidation can be done in several ways. All of them are looking to do the same thing: merge your debt payments into one.
In the first option, you can get almost no interest rate and transfer your credit card balance. This essentially means transferring all of your debt payments to one card and paying off the balance in full if needed. But, for that, you need to have a credit score from a tycoon. There should be over 690 points to make sure you have this option on your table.
On the other hand, you can consolidate your debts and get a fixed interest rate on them. You can repay the loan in installments over a period of time. This is workable if your credit score is 689 or less. And, before you wonder if the interest rate for those with a higher credit rating would be lower, the answer is yes. It all comes down to your credit score.
You can even take out a 401 (k) loan or home equity loan. These options are riskier for your retirement or home, however, so you may want to contact your financial advisor and discuss your debt-to-income ratio and credit profile before choosing these options.
There are several indicators you can consult to decide if this is the right approach for your refinancing project. The success of the process depends on your monthly debt payments. If that, including your rent or mortgage payments, isn’t more than half of your gross income for the month, then you’re good to go.
Second, your credit score should be high enough to get you the lowest or almost zero interest rate. Plus, you should be able to pay it back within 5 years based on your monthly income and expenses.
Plus, debt consolidation can come with loan origination fees that can amount to around 15-25% of your total debt.
The biggest risk in debt consolidation is a drop in your credit rating. This can hurt your chances of taking out a large loan in the future, say, for example, that you want to buy a car or pay your child’s school fees. Why is this so? Well, lower credit scores indicate low financial responsibility and credibility, which makes it a barrier to getting large loans. So, if you are looking to go for this refinancing option, be sure to combine it with measures that can increase your credit score in the future. Some of them are as follows.
- Keep an eye on your credit card reports. In case of discrepancies or errors, immediately alert your bank.
- Avoid making major purchases with your credit card. Instead, opt for personal loans with installment payment options to keep your credit rating stable.
- Observe financial prudence. Avoid spending too much on items that are not needed. You can set a monthly budget for yourself and focus on spending if necessary.
- Make timely payments through the automatic payment options on your credit card. This will help you stay up to date with your payment and not miss it.
If debt consolidation is not for you, you can opt for debt settlement or debt management. Here, a customer credit counseling service can help you develop a viable and long-lasting debt payment plan. You can even work and contact your creditors to reduce interest rates. This process is known as debt settlement and is often the last resort for consumers.
Debt consolidation can bring you comfort in life and make you sleep peacefully at night. Execution however surely depends on your credit score profile, among other factors. So you might want to weigh the pros and cons first and see if you can make a workable deal or not. Make sure you go to your bank and talk to your bank representative or financial advisor first about this. You don’t want to end up hurting your credit score by intervening without having done your homework.
Stuart Bienenstock examines how to limit the use of technology by children
Benjamin is passionate about technology. He previously consulted and managed communications for several tech startups. Now he works with the digital network Xtrapoint as a full time reporter and has the freedom to explore finance, history and the arts.
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