If you already have several debts and if you are having problems in maintaining all of the bill payments at the same time, you can take help of bill consolidation. The bill consolidation process helps you to pay off your debts faster than you usually do. However, if you want to become debt free early, you will have to make more than minimum payments against your consolidated debt.

Consolidating your unpaid bills

There are mainly three ways in which you can consolidate your bills. You can transfer balances from your credit cards or take out consolidation loan – secured or unsecured or else you can also take help from a bill consolidation company.

When you consolidate your bills, irrespective of the process through which you are consolidating your bills, the interest rate on your debt lowers and thus, the amount that you are required to pay each month lowers too. Moreover, the number of creditors or lenders you are required to deal with lowers too.

But, if you really want to quicken your debt pay off process, you will have to make payments strategically against the consolidated debt. That is, you will have to make more than maximum payments on your debt in order to become debt free quickly. Another thing that you need to keep in mind is that if you are not able to make more than minimum payments on your consolidated debt, if you are not able to pay off the debt quickly, you ultimately end up paying more on the interest.

Moreover, in case of balance transfer, you transfer the balance from high interest rated credit cards to one offering you 0% introductory rate on balance transfer. Now, after the offer period ends, the interest rate is going to rise. Thus, you need to first read the terms and conditions of the credit card. You need to check by how much the interest rate may rise after the offer period.

You will have to try and pay off the debt within the offer period (as much as possible), otherwise the debt amount can increase all the more with the increase in the interest rate. In that case, it won’t be possible for you to become debt free quickly. Not only this, you may not even be able to become debt free in near future. The debt cycle may go on and on with the increased interest rate.