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Is Debt Consolidation a Bad Thing if you’re Retired?

Is Debt Consolidation a Bad Thing if you’re Retired?

When you’re retired, you know how difficult it is to deal with rising prices or an unexpected bill.  When you’re on a fixed income, it can seem like there is no good way to save money when the cost of everything keeps going up.  That’s why when a retired person reads that debt consolidation loans can actually help to reduce the cost of their debt, it’s easy to understand why they would be skeptical.

A debt consolidation loan works by combining all of a person’s debts into a single loan.  By reviewing each case personally, a debt counselor is able to assess the risk on an individual level.  That allows a bank to offer a lower interest rate than what is offered by most credit card companies.  Combining the loans together avoids high minimum payments.  Instead of spreading out money among a large number of loans, it is possible to concentrate it on a single payment.  That means that less of your money goes to paying fees and interest, and more of it goes towards paying off your debt.

By lowering your interest rate and stretching out payments, it’s possible to lower your monthly debt payment down to a level that you can afford.  Your debt counselor will review your income and expenses and find a loan that fits into your budget.  Rather than just giving you something you can afford today, a debt counselor will take into account that you need extra money for savings and to combat rising prices at the store.  You’ll get a payment that you can easily afford, even when you have to deal with an unexpected bill.

<p data-sp-element=”content”>It’s also possible to get a loan that will enable you to pay off your debt faster.  By lowering your interest rate and keeping your payment amount the same, you will get to pay off your debt a lot faster.  More of your monthly payment will go towards the principal of the debt, not interest.  In a shorter amount of time, you will have your debt paid off, and a large portion of your expenses each month completely eliminated.  That will put you in a much better position to deal with new bills and rising prices.<p data-sp-element=”content”>By lowering your interest rate and keeping your payment amount the same, you will get to pay off your debt a lot faster.  More of your monthly payment will go towards the principal of the debt, not interest.  In a shorter amount of time, you will have your debt paid off, and a large portion of your expenses each month completely eliminated.  That will put you in a much better position to deal with new bills and rising prices.

About Author: Debt Help Desk

There are tons of sites and articles about getting out of debt. We are different because we are not a site owned or operated by an actual debt relief company. No bias. Our agenda is to help people make smart debt relief decisions- Now let’s help you.

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