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How to consolidate your debt

How to consolidate your debt

Knowing how to consolidate is important for two reasons.

Firstly, it enables you to know exactly what needs to be done to get rid of your debt.

And secondly, it helps you to find the best possible solution for your current debt status. One of the first steps you need is to list all your debt accounts and repayments thereof. This will give you an overall idea of how much you would need to loan but also what your current expenditure is on debt.

Listing of debt is a requirement when applying for a debt consolidation loan, in order for your lender to know, which debt amounts would need to be paid. Some debt consolidation lenders pay the loan amount directly to the applicant. This is not always the most advisable option. To ensure you are debt-free, opt for the lender to pay over the outstanding balances to your current lenders. Not only do you have professionals handling your financial affairs but it saves you the time.

List your debt

Start by listing each of the debts you wish to consolidate. It is important to make sure you do not overlook any of your accounts. The aim is to cover all your debt so that you don’t have to pay any more than your one, convenient debt consolidation payment.

List all current debt repayments

Planning is key when you are planning to consolidate your debt. List the monthly payments and interest rate of each one of your debts. This will give you a good idea on how much you are spending on all your debt repayments. You could also work out the estimated interest you would be paying back on all your debt repayments. This will give you an estimate on how much you will be saving on interest, once you have secured a debt consolidation loan.

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