WHAT IS DEBT CONSOLIDATION?
Is your business juggling multiple debts? Are you struggling to keep up with the repayments and the constant energy that is required to stay on top? If so, it might be time to think about debt consolidation.
The aim of debt consolidation is to save money and simplify your payments and the paper work involved by combining all your balances into a single debt.
- It can make it easier to manage your repayments. When keeping up with multiple debts on different payment schedules, you run the risk of forgetting payments and ending up paying extra fees. For businesses, it means more time spent maintaining multiple accounts which translate into more expenses.
- You can potentially save money by getting a lower interest rate.
- Better cashflow. Lower repayments gives you a better cash flow, lowering the risk for missed payments and extra fees.
UNSURE IF DEBT CONSOLIDATION IS THE BEST WAY FORWARD FOR YOUR BUSINESS?
“Beware of little expenses, a small leak will sink a great ship” BENJAMIN FRANKLIN
THINGS TO CONSIDER
- Debt consolidation may cost you more if the interest rate or fees, or both, are higher than before.
- You could also get deeper into debt if you get more credit, as it may tempt you to spend more.
- To get a lower interest rate, you might be considering turning your unsecured debts, into a single secured debt. For secured debt, you put up an asset as security. This means that if you can’t pay off the new loan, the asset may be at risk. The lender can sell it to get back the money you borrowed.
Consider all your other options before using your home or other assets as security.
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