How Can Bill Consolidation Reduce Your Outstanding Debt?

How Can Bill Consolidation Reduce Your Outstanding Debt?
by: Jason Holmes



If you are finding it really hard to repay your multiple bills/debts,
then bill consolidation may be a feasible option for you. You can combine
all your existing bills (such as, your medical bills, utility bills,
store card bills, credit card bills, etc.), and replace it by a single
one. Bill consolidation is also sometimes referred as debt consolidation.

2 types of bill consolidation

Your multiple bills can be consolidated in 2 ways – Consolidation program
and Consolidation loan. Though both are effective in consolidating your
multiple bills into a single one, yet they are different in the way they
function.

(1) Bill consolidation program

As soon as you enroll yourself in a consolidation program, the
consolidation company will begin to negotiate with your creditors in
order to reduce the interest rates on your bills. The company will
carefully analyze your financial status and decide upon a single monthly
payment that you can afford. It is also the task of the company to get it
approved by your creditors. In this way, your entire bill payments will
get replaced by a single monthly installment. You need to make this
approved monthly payment to the consolidation company, which in turn,
will distribute the payments amongst your creditors.

You need to pay a certain fee to the consolidation company for its
service.

What are the benefits of a bill consolidation program?

Debt consolidation program offers a number of benefits, which are given
below:

• Only one monthly payment – You need to make a single monthly payment
towards clearing your multiple bills.
• Reduces stress – Your creditors and collection agencies will stop
making any more harassing calls.
• Decreases interest rates – The interest rates on your multiple bills
will get reduced.
• No late payment fees – Your late payment fees will either get reduced
or get completely waived off.

How do you choose which consolidation company is best for you?

There are a number of consolidation companies, out of which, you need to
decide the one that can benefit you the most. Therefore, it is advisable
that you compare the rates as well as the terms of agreement that the
consolidation companies offer. You should also verify how efficient they
are in handling your accounts.

(2) Bill consolidation loan

You can take out a personal loan and with the help of that you can repay
your multiple bills. In this way, you’ll be able to replace all your
bills into a single one. Moreover, you’ll have to make a reduced monthly
payment in comparison to the sum of your multiple installments. You can
take out this personal loan from any financial institutions or any
lender; sometimes, consolidation companies also offer personal loans.

Though debt consolidation offers a number of advantages, yet there are
some disadvantages that you should know before you opt for it. If you
choose consolidation program, it will reflect in your credit report.
However, consolidation is a better alternative than filing bankruptcy, as
the latter has adverse effects on your credit report.

For more information, you can visit:
http://www.debtconsolidationcare.com/forums/bill-consolidation.html

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About The Author
Jason Holmes is a reputed author and she has been writing articles on
debt consolidation. She has also written for the Debt Consolidation Care
community. Some of the articles written by her include Debt free, Debt
negotiation, Bill consolidation, Ameriloan and Legacy Visa. Her write ups
are very informative and have proved to be very helpful those in debt.

For more information, you can visit:

http://www.debtconsolidationcare.com/forums/bill-consolidation.html