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Most of us face various issues related to paying up debts at some point of time in our lives. If you are one among us and are looking for a permanent solution for all your debt related issues, debt consolidation may be the answer. There are many lenders available these days who allow you to consolidate your debts and allow you to pay debts in installments within a time period. Here are some of the facts you should know about debt consolidation mortgage loan. • During the debt consolidation, lender takes the responsibility of all your debts and you will be liable to this lender which makes things easy to monitor. • One of the best aspects with the consolidation is that you get a chance to structure your loan to pay affordable monthly payments within your budget which becomes easy to deal and pay on time. • Through consolidation of debts, interest rates on loans can also be negotiated. This is favorable to you and lower monthly payment. • You can get 2 types of loans: secured consolidation loan and unsecured consolidation loan. The other best option with these loans is the longer repayment term with lower interest rates. Next time when you go for debt consolidation loans, keep the above things in mind and plan accordingly. Create your own Debt Reduction Plan • To create your own plan, initially pull a free credit report and place it in a spreadsheet which should contain columns like balance, rate, minimum payment, number of payments left and many more. • Determine a fixed monthly amount within your budget which you can pay for your debt every month comfortably. • Write a list of debts you have according to priority, highest amount and interest rates. Pick two or three target debts and fix them as the first target. Decide on a timeline to pay the amount and close the debts. • Clearly write the name of the debt, the amount you are planning to pay and for how many months. Avoid confusion while writing. Take 2 copies of this sheet. Stick one at home and other at office desk so that you can get motivated looking at them. • Pay the debts with highest interest rates first as this becomes the most expensive debt as the time goes on. This gives you more confidence. Also give preference to lowest balance. If you have 3 or more debts with low balances, consolidate them into a single one. This becomes easier for you to create your debt reduction plan.
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