What Is Bill Consolidation?

By Author: Ty Lee
Total Articles: 2
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In modern times, people have fast-paced lifestyles. Along with this rapidly changing world come numerous expenses to cover for the daily needs of an individual. People always want to search for convenient means of doing things, so as to save time and effort. One of the reasons people choose to apply for credit cards is that they are convenient, especially when you run out of cash and need to pay something ASAP.

Though credit cards seem to be a god-send to humanity, in the long run, these plastic items can turn into nasty nuisances. How can this happen? Consider a spender who has more than one active credit card. After he has charged some amounts to his card, he signs himself up for a debt to that card. Now, if he suddenly falls short of cash, and can't pay his monthly dues to his card issuer, the interest rate on the outstanding balance will get him. What do you get? A huge credit card debt.

Debts do not only sprout from mismanagement of credit card accounts. A buyer or spender can amass debts when he has applied for a car purchase, and has missed out on several monthly payments. What about a family who took a ...
... mortgage loan, but has defaulted on their payments? Then there is the cellular phone user, who has used up more minutes than his plan allows, and now can't pay the outstanding balance.

For people who wound up in these unwanted circumstances, bill consolidation can serve as an answer to their woes. What is bill consolidation? It is a type of loan that can be applied for, and once approved, the borrower has the chance to wipe out his existing debts from his bills. Some sources explain that in order for a person to qualify for bill consolidation, he or she must have an outstanding debt with a minimum of $5,000. There should also be proof of monthly income, so the lender can be assured that you have a means to pay for your consolidation loan.

When you receive the bill consolidation loan, you can pay off all your dues. You now only need to pay a monthly amount to your lender, with an interest rate that they will determine. Your role as the borrower is to be prompt with all your payments from now on. Also, you need to be wiser about your expenses, so you won't fall into debt in the future.