The first step toward making debt consolidation work is calculating the total amount you pay for credit cards every month and the average interest paid on those cards.That provides a baseline number for comparison purposes. For many people, there is enough left to handle their debt if they organize their budget better and get motivated to pay down debt. In finance, the process includes importing data, mapping general ledgers to a single chart of accounts, normalizing the consolidated data and producing reports called consolidated financial statements.
The loan is repaid in monthly installments at an interest rate you negotiate with the lender.
The repayment period is normally 3-5 years, but how much you interest you are charged is the key element.
Lenders look closely at your credit score when determining the interest rate they charge for a debt consolidation loan.
This debt-relief option untangles the mess consumers face every month trying to keep up with multiple bills from multiple card companies and multiple deadlines.
Instead, there is one payment to one source, once a month. There are two major forms of debt consolidation – taking out a loan or signing up for a debt management program that doesn’t include a loan.