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    The Best Ways to Consolidate Bills

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    Bill consolidation is an ideal option if the annual percentage rate for the new debt is lower than that of your credit cards. This can shorten the payoff time, reduce interest rates and make payments more manageable. The best way of consolidating the bills depends on your credit score the amount of debt you have, among other factors. Below are some of the best ways to consolidate bills.

    Bill Consolidation Using A Personal Loan

    A personal loan extended by a credit union or bank is for a specified amount of cash and repaid in a predetermined term, usually 12-60 months and installments. Personal loans typically have a fixed interest rate based on the loan size and credit score.

    After consolidating the bills with a personal loan, you can use the loan cash to pay some credit cards, then pay monthly installments to your lender. Personal loans are a kind of unsecured debt. This means that any collateral doesn’t back the loan. Unlike a mortgage or car loan with secured debts, you will not lose anything when you default on your loan. However, if the creditor sues you because you’ve defaulted on the personal loan, a lien might be placed on your property or wages.

    Credit Counseling & Debt Management Plan

    Credit counseling services work with various creditors to give you affordable terms like low monthly payments and interest rates. A person makes one monthly payment to their counseling services that distribute the cash to your creditors. You are required to live on a budget and surrender your credit card to consolidate your bills with debt management plans. The plan is complete in 3-5 years.

    Enrolling in such a plan requires that you qualify based on income. You are eligible only if you’ve had enough income to cover the monthly income. The credit counselor might recommend bankruptcy or recommend debt settlement if you lack enough cash to settle your debts.

    Peer-to-Peer (P2P) Loans

    Another method of bill consolidation is through peer-to-peer loans. P2P lending matches investors who hope to earn solid returns with borrowers online. P2P lending is prevalent and among its many uses is bills consolidation. The most attractive thing about peer-to-peer loans is that the entire process is online. There’s no credit union, lending institution, or bank involved and no managers to consult regarding your loan. You can finish the entire process with just a tablet or a laptop and find lenders through various P2P lender sites like Prosper, Upstart, or Lending Club.

    P2P loans are also a form of unsecured debt, meaning that you won’t have to offer collateral. Lenders take the risk that a borrower will settle the loan in 3-5 years. You pay monthly installments that are deducted from your bank account automatically.

    Balance Transfers

    You can also use credit card balance transfers to consolidate your debt, which can save you money on interest. A balance transfer is a process of moving your debt from a credit card with high interest to one having lower interest rates. Search the internet for low-interest credit cards to start this bill consolidation method. Being proactive in such searches helps you determine whether you can qualify for a credit card with better terms.

    Although managing your bills might prove a challenge, you can beat it by using different ways of bill consolidation. However, you must consider your resources and assets, credit score, and the ability and income to repay the loan. However, if you qualify for bill consolidation, you can leverage the benefits like lower interest rates, more manageable payments, and a more manageable process. Leverage the above four best ways to consolidate bills to manage your bills better and gain the benefits above.

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