To Do Libre Blog

Debt consolidation service: how it works?

January 5th, 2012 by admin

Let us know how the debt consolidation service works:

For instance you have accumulated the debt on two credit cards, as well as on the medical bills and that of a personal loan. Therefore the details of these accounts are as follows:

Outstanding balance:

on credit card X (15%) – $15000 on credit card Y (20%) – $12000 on medical bills (13%) – $13000

average interest rate  = 16%

After enrollment in a consolidation program, the rate of interest on debts is negotiated:

Credit card X – 10% Credit card Y – 16% Medical bill – 10%

So, the average interest rate = 12%

Now if your total debt amount is $40000, you’ll save = (16% – 12%) * 40000 = $1600 per year

Posted in Finance   

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