Debt can truly burden anyone who has it. By learning about your options, you are taking a positive step. The solid advice presented here should start you on this debt free journey.
Before you get your debts consolidated, see what your credit report looks like. The first step to correcting your debt issues is to understand how they all happened in the first place. See how much debt you have and whom money is owed to. You’re not going to be able to develop a solid plan in which you make different choices in the future if you don’t do all of this.
Figure out if the debt consolidation company you’re looking into actually has qualified counselors. Is there any organization that has certified these counselors? What is their education and training? This helps to determine the legitimacy of the company and whether or not it’s worth pursuing.
Debt Consolidation Company
Use a wide variety of criteria to help you in your selection of a debt consolidation company. Even though it may seem like a good deal, non profit doesn’t always mean good deal for the consumer. Be sure to check out the BBB online to find reviews and ratings of any debt consolidation company you are considering.
When searching around for a debt consolidation loan, look for one that offers a fixed rate that is low. Any other type of loan may leave you in the dark about what your actual payment will be each month, which can get difficult. Look for a single loan that has the terms laid out through the duration of the consolidation loan, and one that will leave your credit in a better place when it is paid off.
When in the midst of your consolidation plan, reflect on how you got to this point. After all, you don’t want to end up in this position five years from now. Look deep into yourself for answers, and make sure this doesn’t happen to you again.
See if the counselors at your debt consolidation agency are certified or not. Check with the NFCC if you’d like to find counselors and companies that have a good reputation. This will ensure that you are dealing with a knowledgeable company that has employees who have the proper training and certification.
If you need to eliminate debt and feel desperate, you might borrow from your own 401k. Borrowing from a bank or from another financial institution will probably cost you more than borrowing against your own 401k plan. Keep in mind that you can lose your retirement funds if you are not able to pay back the money you borrowed against your 401k plan.
Use the snowball tactic to pay off all your credit cards. Find the card you have with the highest overall interest and get it paid off first. Once you do this, use the money you save by not paying this amount and use it to pay off the next-highest interest card. This is a good option to use.
Interest Rate
Speak with your creditors and try to negotiate a more favorable interest rate before going the debt consolidation route. For example, see if you’re able to get a better interest rate, and offer to stop using the card if you’re able to move to a rate that’s fixed. You may be surprised at what you will be offered.
Before using a credit consolidation company, ask them what their privacy policy is. Determine how the company plans to keep your information secure. Ask whether encrypted files are used. If it isn’t, you can be at risk of getting your identity stolen by computer hackers.
Debt is a terrible thing to have to deal with. However, if you’re willing to consider debt consolidation, you can find your way to relief. This article has given you a great start, so keep reading and learning.
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