Bill consolidation is one of those unfortunate processes that people are driven to because they are having trouble making their monthly payments. Whether they have two big loans to pay off or multiple smaller debts that are hanging around, they all have to be paid. Sometimes it is difficult to remember each one if they are due at different times of the month, and they are left out by accident, which accrues extra interest. There are also the circumstances that include too many payments and not enough income before the stress of interest and late fees. This is when bill consolidation comes in. There are numerous benefits to this procedure that help individuals get back on their feet again.
When an individual starts the bill consolidation process, they will have to start something that the agent might call debt counseling. This is basically when they are meeting with the agent and providing them with their financial information – their bills, monthly income statements and so on. Then they will discuss the various bill consolidation options that the clients may have towards making their financial situation better.
The agent will then start negotiations with the creditors concerning the individual’s debt and will enter into an agreement with them based on what is best for you and the creditor. When it comes to credit cards, these accounts will be closed. Therefore, not allowing the individuals to use them at any time. The agent completing this bill consolidation process with the individual will then go over a budget and calculate how much of a payment can be afforded each month. Depending on the outcome of the calculations, the bill consolidation payments will then be negotiated with each of the creditors as an offer to them.
Once these bill consolidation payments are agreed to and all the paperwork is signed, it is expected that the individuals to pay these amounts each month on time. There is another way to obtain bill consolidation and that is through a loan. These monies are called bill consolidation loans and are specifically for the purpose of individuals to pay off their individual debts with this money then continue to pay off the loan on the agreed terms. This form of the process is quicker than going through an agent, but the responsibility of getting the funds to each creditor is the individual’s, not the agent’s.
With either form of bill consolidation, there are a number of benefits to follow. First, the monthly payment is lower and over an extended period of time. Second, the interest rate is usually lower, so less hard-earned money is being spent on this interest. Third, there are fewer bills to have to keep track of. In fact, if all of the debt is put onto this one bill consolidation agreement, then there is only one main check to write out. The fourth point, and a very important one, is that there will be less stress to face. For those who are experiencing higher monthly bill payments than they can afford, bill consolidation is on option that is open.