The Benefits of Debt Consolidation in Suffolk County
When Setauket, NY residents are struggling with their finances, they call Suffolk County’s leading debt consolidation expert, Richard S. Feinsilver, Esq. of Your Long Island Bankruptcy Lawyer. With more than 25 years of experience, Mr. Feinsilver is an expert in debt consolidation. He has successfully guided countless people through the process of debt settlement and get back up on their feet financially, and he can help you, too! If you’re buried under the weight of your bills, contact Your Long Island Bankruptcy Lawyer to learn how you can settle debt and get a fresh start on your financial well-being.
Are you burdened with massive amounts of debt? Are you struggling to keep up with your payments? Are you barely making ends meet? If you answered ‘yes’ to any of these questions, then debt consolidation might be the solution for you.
Debt Consolidation Explained
Debt consolidation refers to the process of rolling over high-interest debts, such as personal loans and credit cards, into one low-interest payment. In other words, it’s a form of debt management, and it can help to solve your financial troubles.
There are two primary ways you can consolidate debt:
- A fixed-rate debt consolidation loan. You can apply for a fixed-rate loan, use the money from the loan to pay off your higher-interest debts, and then repay the money you owe on the loan in monthly installments.
- A balance-transfer credit card. You can also transfer your high-interest debts over to a 0% balance transfer credit card and pay off the balance on the card before the promotional period expires.
With debt consolidation, you can pay off virtually any kind of unsecured, high-interest debt you may have; credit cards, medical bills, student loans, utility bills, personal loans, etc. For example, if you have multiple high-interest credit cards and student loans and you’re having trouble keeping up with the payments, debt consolidation might be the ideal option for you.
Key Benefits of Debt Consolidation
Why is debt consolidation beneficial? Let’s take a closer look at how debt settlement can benefit you.
Easier to Manage Payments
Trying to juggle multiple payments can be tough. With so many bills and due dates to keep track of, late payments are bound to happen. When you consolidate your debt, instead of making several payments each month, you’ll only have to make one, which will certainly alleviate your stress and make managing your financial affairs a whole lot easier.
The majority of unsecured debt – particularly credit cards – has high-interest rates, and those rates can drastically increase the amount you owe. For example, if you charged $400 on a credit card that has a 15% interest rate, you’ll end up paying a total of $460. Add that amount across several credit cards and you’re paying an exorbitant amount in interest; much more than the actual amount you charged.
By consolidating your debt to a single low-interest debt consolidation loan or a balance transfer credit card with a 0% interest rate, you’ll spend significantly less on your monthly payments.
Pay Down Your Debts Faster
Credit card balances can take several years to pay off. When the interest rates are high, it’s likely that you’re only able to pay the minimum amount due each month, which can make it virtually impossible to pay back the amount you actually charged. With low or no interest, your payments will go toward all or most of what you borrowed, so you’ll be able to pay down your debts faster.
Boost Your Credit Score
When you’re carrying a lot of unsecured debt, your credit takes a big hit, but when you consolidate your debts, there’s a good chance your credit score will improve. Why? – Because your credit utilization ratio will drop.
Credit utilization ratio (also known as credit utilization rate) refers to the amount of revolving credit you’re using divided by the total amount of revolving credit that’s available to you; in other words, the amount of debt you owe divided by your total credit limit. The amount is usually expressed as a percentage and it’s important because it lets credit scoring agencies know how much of your available credit you’re using. Credit utilization ratio accounts for 30% of your credit score.
Ideally, your credit utilization rate should be less than 30% if you want to maintain a healthy credit score; any higher and your credit will suffer. By consolidating your debt, the rate will drop and your credit score will increase. Add to that the fact that you’re less likely to miss payments (even one missed payment can have a huge impact on your credit score) when you’re only making a single monthly payment as opposed to several, and debt consolidation can boost your credit score even more.
Trying to juggle multiple payments can be extremely stressful. Keeping track of due dates, writing out multiple checks or logging in to several accounts, making sure you have enough money in your bank account to cover all of your expenses; carrying a large amount of debt can be extremely stressful. Having only one payment to keep track of and actually paying down the amount you owe while seeing your credit score rise will surely make you feel a lot less stressed.
Interested in Consolidating Your Debt?
If you’d like to learn more about debt settlement and how it can improve your financial future, contact Your Long Island Bankruptcy Lawyer today! Our attorney, Richard S. Feinsilver, Esq., is a leading Suffolk County debt consolidation expert and has successfully helped dozens of people throughout the Setauket, NY area take control of their debts and improve their financial well-being. To schedule an appointment for a complimentary consultation, please call 516-873-6330 today!
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