The Most Authentic Guide on Personal Finance and Investments


Words of Wisdom : "Try to be a rainbow in someone's cloud." ~ Maya Angelou

Think debt consolidation when drowning in debt

Plenty of attractive goods and services in the market
+ Smart bankers ready to finance your dreams and aspirations
= Rapidly multiplying debts and EMI obligations

And before you realize, many small bills add up to a hefty amount that threaten to take away most of your salary... every month.

If your debt problems are yet to achieve serious proportions...
If you haven't still crossed that all-important point of no return...
...  there is a remedy to solve all your debt worries.


Known as 'Debt Consolidation' in financial jargon, it simply means replacing many small debts with one or two large ones. This may, on the face of it, not sound as a very big deal. However, the effect can indeed be quite magical. As I repeatedly exhort, keep things simple. Simple investments, simple insurance, simple debts, etc. are sufficient enough to give you an excellent financial life. You don't need any complicated products to make you rich.

Debt consolidation simplifies your debt profile as it has the potential to lessen your burden in many diverse ways.

Lesser are the loans to service
As you would have experienced, keeping track of several loans and trying to pay various bills by the due date is a tedious affair. Even when you have to ability to service all your debts, it is easy to miss payments when the number is large. And within no time it can balloon into a gigantic problem.  When you consolidate all your debts into one or two, you get a much better perspective of your financial picture and your debt problems appear much less alarming.

Lesser is the interest outgo
Different debts carry different rates. Also, there is the additional penal interest whenever you default. When you take a single loan to pay off multiple debts, the interest payout on this new loan is almost surely lower than the sum total of interests on many individuals loans. This is a double bonanza. One, your monthly payout reduces. Two, lesser payout means more money in hand, which can be helpful in accelerating your debt reduction. So within a short period of time you will see a rapid decline in your liabilities.

Lesser is the time pressure
One of the key aspects of too many debts is too many missed payments. Naturally, therefore, you are under immense pressure of these numerous unpaid bills. And, despite your good intentions, you may have no means to pay them all off at one go. What if you get an opportunity to repay the overdue amount in instalments? Debt consolidation comes to your rescue by staggering these outstanding payments over a longer time frame. With the pressure off, you start rebuilding your life with a lot more peace of mind.

Lesser is the harassment
Many debts means many forgotten bills. And many unpaid debts means many unhappy lenders. Many unhappy lenders means many foreclosure notices and many threatening phone calls. One or two creditors, post debt consolidation, means lesser chances of not remembering your due dates. No delays means no more harassment.

Try it out... now. You won't regret. 


You may also like to read '7 Ways to Manage Debt' and 'How to Reduce your Home Loan EMI'

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