Debt consolidation isn’t that hard to get into and a lot of people do get into it when they have too many bills they have to pay or a mountain of debt. This makes life easier since you make one large payment each month, rather than many small payments. This article provides information about some helpful debt consolidation plans.
Get a copy of your credit report before embarking on the debt consolidation journey. This is the first step to fixing your debt issues. Think about how much you owe, and know who you owe. You cannot rebuild your finances if you aren’t aware of this.
Don’t necessarily trust just any non-profit debt consolidation company when you’re researching your different options. This is often used to disguise predatory lenders, so you may end up with poor loan terms. Check with your Better Business Bureau or try to find a service that someone can recommend.
Do not pick a debt consolidation just because they say they are “non-profit.” Even though you’ve heard differently, not for profit doesn’t mean they know what they’re doing. If you wish to figure out if companies are good at what they do, see if you can find them on BBB’s website at www.bbb.org.
Sometimes a simple call to creditors can help you get a lower payment. Many creditors work with debtors because it’s better for them to get some amount of payment than nothing at all. 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.
When shopping for a loan, work to get the lowest fixed interest rate. Any other type of loan may leave you in the dark about what your actual payment will be each month, which can get difficult. A one-stop loan with favorable terms that are fixed will leave you with a better financial position after you have paid it off.
If you are a homeowner, you might look into refinancing your mortgage to pay down other debts. Currently, mortgage rates are low, making it a great time for debt consolidation this way. In addition, you may discover that your monthly mortgage payment is lower than you believed.
Try to use a loan to clear off the debts that you have. Many creditors will accept as little as 70 percent of the balance in a lump sum. This does not negatively affect your credit rating and can actually increase your credit score.
Some debt consolidation agencies aren’t on the up and up. When something seems too good to be true, it probably is. Ask the lenders plenty of questions and be sure they’re answered before signing for their services.
Try finding a good consumer credit counselling office in your area. These offices are able to help you manage debt and combine all accounts into a single one. Using a counseling service doesn’t hurt your overall credit score like using a professional debt consolidation service might.
Pay Everything
Once you have established a plan for consolidating your debt, you should aim to pay everything in cash. This helps you prevent yourself from accruing new debt. That might be what put you in this position to start with! Whenever you pay everything in cash, you are forced to only buy things with money you currently have.
If you have a 401-K, you can use it to reduce your debts. In essence, you’re borrowing from yourself. It is a little risky, though, as you’re borrowing from funds you’ll likely need in retirement.
Rather than a consolidation loan, try paying credit card balances with the “snowball” approach. Pick the card that has the highest interest and try paying it off as soon as possible. Use the savings from that missing payment to pay down the card with the next highest rate. This might be a solution that could work very well for you.
While watching your bills mount is stressful, it is more prudent to begin thinking about how you can take action. Debt consolidation can help simplify the repayment process concerning your debt. Incorporate the tips learned here and use it to help you combing all your bills into one simple payment so you can get out of debt quickly.
This is a limited-time offer. We are not able to guarantee availability if you wait!
