Debt consolidation companies have gained a bad rap over the past decade. They claim to help customers replace multiple debts – such as auto loans, credit cards, and school fees – with one loan with lower, more affordable monthly payments. But many unscrupulous companies actually leave their customers paying more in interest on their new loans than they were before. The goal of debt consolidation is to get out of high-interest debt and pay off one loan that carries a lower rate of interest, thus saving money. Here are four debt consolidation techniques that can save you money.
1. Ask Lenders for Lower Interest Rates
The first debt consolidation technique that can save you money is simply asking lenders for lower interest rates. Believe it or not, this is the preferred technique employed by many debt consolidation companies. Lenders would rather work with borrowers and receive some money than pursue expensive debt recovery measures through the courts. Contrary to what they might tell you, debt consolidation specialists don’t have any special avenues open for them that aren’t also open to you.
If you become their client, they will simply call your creditors on your behalf. You can use this same technique. Simply call up the companies you owe money to, explain your situation, and ask for lower interest rates. Most companies are happy to work with customers that show a willingness to pay off their debts. Your route to lower interest rates could be just a phone call away.
Continue ready on the next page to discover more techniques that can save you money.