Debt restructuring or debt consolidation combines several loans such as credit card, medical bills, personal loans, etc into a single loan. In doing so, it helps avoid late payments and better debt management. In additional, debt consolidation can also bring down monthly loan commitment to a manageable level by extending the payment term longer.
Example of Debt Consolidation
Credit Card Balance Transfer is one of the common debt consolidation methods. This method helps to reduce your balance with lower interest rates. The other function is that it is also being used to consolidate all your credit card balances from different cards into one single card. However, for licensed money lender, it merely means you are consolidating debts from different money lender into 1 single combined debts, making it easier to manage.
Personal Loans can also be used to consolidate all your debts. Most people transfer their higher interest debts such as credit cards, into lower interest debts.
Similarly with licensed money lender, if the loan is overdue, the interest rates compounded to become extremely more expensive. Hence, that is why you see some people moving from 1 money lender to the other money lender.
Borrowing against a life insurance policy or retirement/ savings plan through the cash value of the policy is another debt restructuring method. The negative side of this method would be a reduction in cash value and sometimes sum assured. This indirectly lowers your protection that you have built over the years.
If you are ever in need of cash, whether it is for debt consolidation or for urgent financial emergency needs, you can always enquire on how this services works. Debt consolidation is a good way to gain control over your finances. It is also a perfect solution to those finding it difficult to deal with a large number of payments on a monthly basis. Should you need further clarifications or consultation on debt consolidation, feel free to contact us.