A Debt Consolidation Plan can provide many benefits to consumers trying to regain their financial footing and stability. Upon enrollment in a Debt Consolidation Plan, the benefits may not be the same depending on who your creditors are, but each will afford you certain concessions that will make your debts easier to handle. Here are some of the benefits that may be available to you through a Debt Consolidation Plan:
A Single Monthly Payment:
You will no longer have the trying task of paying separate bills each month. The credit card consolidation program combines all of your accounts into one monthly payment. The processing company will divide and disburse the funds to all your creditors. So, you don't need to make multiple payments to individual creditors at different rates of interest. Your payment due date, chosen by you, will be the day of the month that is most convenient for you.
Reduced Interest Rates:
The current interest rates on your unsecured debts will be substantially reduced. This allows more of each monthly payment to be applied toward the principal balance instead of toward interest.
Re-aging Of Accounts:
When an account is past due, or delinquent, creditors usually demand full payment of past due amounts to bring the account current. Re-aging the account marks the account current without payment of the delinquent amounts. This means that your account will be reported as current, and will stay current, as long as you keep making your payments through a Debt Consolidation Plan, if the creditor re-ages your account.
Keep in mind that if you are extremely delinquent when you enroll in a Debt Consolidation Plan your creditors may require you to bring your account current before the creditor accepts a proposal.
Long Term Benefits:
Unlike introductory offers, the benefits through a Debt Consolidation Plan are long term. They remain for the entire period that you are enrolled in the program.
Currently you are on what we refer to as the Pay Forever Plan which keeps you paying your debt for 20 to 30 years. On this plan, you end up paying double to triple the amount of your total debt.
Most clients enrolled in a Debt Consolidation Plan become Free of Debt in as little as 3 to 5 years. There are no prepayment penalties, so if you are motivated to get out of debt before the 3 to 5 year timeframe, you will not be penalized to do so.
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