Bill consolidation, simply put, is the act of bringing multiple bills together in order for a lump sum to be paid off. For many people, this is seen as a great service, as it allows them to make fewer payments, albeit larger ones. However, others see it as more of a hindrance than a benefit. For those that are looking to consolidate their own monthly payments, here are some pros & cons that the likes of Robert Jain can draw your attention to.
PRO - All your payments are brought into one. This is the most notable pro that names such as Bob Jain can draw your attention to. Instead of having to make multiple payments each month, which takes time, you'll be able to make one large payment in a shorter amount of time. For those that dislike financial matters like this, it would make sense to roll all payments into one. Not only does this save time, as mentioned earlier, but it can reduce stress as well.
CON - When you create a payment plan, you must stick to it, no ifs, ands, or buts. What happens if, for some reason, you're unable to make a full monthly payment? One of the most common setbacks is a lower credit score. As a result, it can be tougher to be approved for additional credit cards, loans, or anything else that requires involvement from your bank. If you're certain that bill consolidation is for you, understand that it's a process that must be committed to.
PRO - Late payments will be less likely. This is important given how much of a negative impact a late payment can have. When you have to cover multiple debts each month, there is a possibility that you will miss one. Consolidating them into a single payment ensures that this doesn't occur. As a result, you can cover all of the payments that must be made, providing yourself with peace of mind in the process.
CON - Interest must be accounted for. Another reason why many people are against the idea of bill consolidation is the interest that must be paid. Interest rates can increase over the course of time, meaning that the average person will end up paying more than what they originally owed. Of course, this can be solved by simply paying off bills in full, as opposed to simply covering the minimum. Nonetheless, this is a downside that should be noted.
PRO - All your payments are brought into one. This is the most notable pro that names such as Bob Jain can draw your attention to. Instead of having to make multiple payments each month, which takes time, you'll be able to make one large payment in a shorter amount of time. For those that dislike financial matters like this, it would make sense to roll all payments into one. Not only does this save time, as mentioned earlier, but it can reduce stress as well.
CON - When you create a payment plan, you must stick to it, no ifs, ands, or buts. What happens if, for some reason, you're unable to make a full monthly payment? One of the most common setbacks is a lower credit score. As a result, it can be tougher to be approved for additional credit cards, loans, or anything else that requires involvement from your bank. If you're certain that bill consolidation is for you, understand that it's a process that must be committed to.
PRO - Late payments will be less likely. This is important given how much of a negative impact a late payment can have. When you have to cover multiple debts each month, there is a possibility that you will miss one. Consolidating them into a single payment ensures that this doesn't occur. As a result, you can cover all of the payments that must be made, providing yourself with peace of mind in the process.
CON - Interest must be accounted for. Another reason why many people are against the idea of bill consolidation is the interest that must be paid. Interest rates can increase over the course of time, meaning that the average person will end up paying more than what they originally owed. Of course, this can be solved by simply paying off bills in full, as opposed to simply covering the minimum. Nonetheless, this is a downside that should be noted.