09 November 2011

Paying too Much to Clear Your Debt

Watch daytime TV for an hour and you are bound to seen an ad promising to clear your debts and make your life easy. What the ads don't tell you is that you could end up paying hundreds, even thousands, of dollars more in interest.  That's because, while  you are only making one  monthly repayment and it may be smaller than all your repayments at the moment combined, you may be paying the debts back over a longer period of time. You'll pay more interest because you're taking longer to repay the debts.  Consolidating debt through a third party company (remember, they promise to do all the hard work of dealing with your creditors for you) may seem like a good option, but the hidden fees and the extra interest can actually make your financial situation worse.  Before choosing any type of debt consolidation, look long and hard at it and read all the fine print. Ask lots of questions and make sure you understand completely just what your obligations are before you agree to or sign anything.

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