Do you feel overwhelmed by excess debt? Would you like to find out how to take control? Debt consolidation is a great process to help you achieve this. The advice that follows will be valuable in helping you get your finances under control. Use the advice here to help you get on the path to better financial freedom.
When considering what options are available to you with debt consolidation services, avoid the assumption that anyone advertising themselves as non-profit is automatically trustworthy or affordable. It could come as a big surprise when this seemingly innocent term results in an unfavorable consolidation deal for you. Go with a group that was personally recommended to you or look at the BBB.
Are you the owner of a life insurance policy? You might want to consider cashing in the policy so that you could pay your debts. Get in touch with your insurance agent and determine the amount of money you can obtain against your policy. Sometimes you’re able to borrow some of what you’ve paid in.
Inform creditors that you’re working with a consolidation service. There might be a compromise that they are willing to work out with you. This will help to take the stress and tension away from your life. When creditors understand you’re truly trying to manage your debt, they may be more willing to help.
Lots of people realize that their monthly payments can be reduced just by contacting their creditors rather than avoiding them. Most creditors will find a way to help their debtors pay off their balance. Note that some creditors, such as credit card companies, may lower minimum payments but will also prevent you from incurring more debt till your account is paid off.
Refinancing your home is one way to get a handle on your debt. Since mortgage rates are showing historical lows, this could be a great solution. Often your mortgage payment can be lower, compared to what it used to be.
Debt consolidation can be the help that you are looking for if they are not a scam. If you see offers that are simply too good to be true, then they probably are. Ask a potential lenders many questions and prior to agreeing to anything with them, have these questions answered.
You might consider drawing money out of your retirement fund or 401K to pay your high interest loans. It’s crucial that you pay back any money to your fund that you take out, though. You have to pay taxes and fees for a penalty if this doesn’t occur.
Figure out if you’re dealing with people that are certified to counsel you when getting debt consolidation. Check the agency out through the NFCC. This will ensure that you are dealing with a knowledgeable company that has employees who have the proper training and certification.
Consider borrowing against your 401k plan to pay your debt off. This lets you borrow from your own money instead of an expensive bank. Be sure you’re aware of the details prior to borrowing anything, and realize that it can be risky because it may deplete your retirement funds.
Individualized Payment
You’ll want to check to see if the debt consolidation company will provide individualized payment programs. A lot of companies do one standard plan, but that is not good because your budget may be different than other people’s. Search for a company that will set up an individualized payment plan. Counselors who take the time to develop individualizes solutions will charge more but your debt consolidation plan will be a lot more efficient.
Prior to taking on debt consolidation, attempt to negotiate with creditors. For example, you can call your credit card lender and ask for a better interest rate on the condition that you stop using it, or ask to be placed on a fixed rate if you are currently on an adjustable one. Most creditors are ready to work with their clients since it is in their best interest to offer a flexible payment plan.
As this article has shown you, consolidating your debt requires thorough knowledge. This article has given you the basics so that you have someplace to start. Put this knowledge to use to find firmer financial footing.