At the beginning of the year there is an accumulation of accounts such as IPVA, IPTU, school supplies, gifts that have been parceled out on the credit card, and with this you can end up losing control of your finances.
According to data released by the National Confederation of Trade in Goods, Services and Tourism (CNC) in December 2018, credit card continues to be the main responsible for debts, used by 78.1% of Brazilian families.
In this way, the financial uncontrol can deconstruct the entire family budget, and may have economic or educational origin, as a personal tragedy or a professional setback.
So we have separated some suggestions for who is in this situation, and how credit to consolidate your debts can be an alternative at these times.
What is Consolidated Debt Credit?
It is the process of combining two or more debts into a single monthly payment. That is, all your debts will be delivered to an intermediary or consolidation company.
And the payment can be made through automatic debit, debit card or money order, with the facility of the total monitoring of the parcels already removed. Many clients choose to pay their debts from 24 to 48 months, depending on the amount of debt, which entails interest.
It is possible to unite all your debts into one with that kind of credit.
What are the debts included in debt consolidation?
Debts considered unsafe, which do not require collateral can be included in the debt consolidation credit, because they can not be confiscated if they are not paid.
On the other hand, loans like automobiles and similar are considered as secured debts, which means that if you fail to make the payment, in this case, these can be pawned by the bank and thus, are not accepted in the consolidation.
Thus, debt consolidation can combine unsecured debt, such as:
- Credit cards;
- Unsecured credit lines;
- Accounts of public services (water, electricity, among others);
- Medical bills;
- Personal Loans.
What are the benefits of debt consolidation?
In addition to the benefits mentioned above, debt consolidation credit puts you in direct contact with a certified professional who will assist you in matters related to your debts throughout the consolidation process.
He will lead you until you are 100% debt free. In addition, your credit counselor can also help you build your financial future by giving you guidelines on how to track your spending, track what you spend on a day-to-day basis, and demonstrate the best ways to save money.
With this, it is crucial to build a monthly budget that works for you. Contrary to what many people think, the budget is not meant to limit your spending and yes, secure your future.
So with financial management in order, you will increase your bank balance and you can build an emergency fund, to have less chances of getting future debts on credit cards, for example.
Pros and cons of using this type of credit
Debt consolidation is useful only when the final debt results in a lower monthly payment than you already own, or if the applied interest rate is also lower.
Otherwise, it is more advantageous and simple to pay the debt monthly.
Another factor to take into account is the pay period because the higher the number of installments, the more you will pay more interest on your debt.
You need to analyze your financial situation before acquiring a credit.
How to properly use this type of credit?
- Set a budget to ensure you have enough income to cover your expenses;
- Set aside money for emergency accounts, thus avoiding new debts;
- Avoid making new expenses until your debt is fully paid;
- After completing a consolidation plan, make a copy of the credit reports to ensure that your accounts have been debited;
- Analyze the possibility of hiring a credit monitoring service to monitor whether there has been any impact between the consolidation and payment of the debt on your credit score;
- If you are unsure which option is right for you, contact a consumer credit counselor for expert opinion on the subject.
Another option is the Low Interest company, which functions as an online simulator and offers more than 30 loan options for you to take out your debts quickly. Check the information on the website and make your simulation.
Now that you already know how to get a loan to consolidate your debts, how about sharing this article with your friends on social networks? Also, leave your comment if you have any questions or tell us about your experience of applying for this type of credit.