When bills are overwhelming, debt consolidation can help you calm the storm. Does this situation sound familiar to you? Or perhaps it is someone you may know? If this is the case, you’ll need to keep reading for an education on debt consolidation.
Your credit report should be scoured before considering consolidation. The first step to taking care of your debt is understand how it began. Assess your debt and document how much you owe and who it 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.
When you are considering debt consolidation, don’t automatically trust a service that says it is a nonprofit, or think they will cost less. Some predatory lenders use the nonprofit terminology to lure unsuspecting people in and then hit them with exorbitant interest rates. Try to seek out a personal recommendation or look up companies on the BBB website.
Don’t be fooled by debt consolidators just because they claim to be nonprofit. Non-profit doesn’t mean you will get the best service. Check the BBB’s website to find good companies.
Are you on life insurance? You may want to cash your policy in if you wish to pay some debts. Your insurance agent should let you know how much money you’d be able to have against your policy. You can borrow back a portion of your investment to pay off your debt.
Paying off debt can be done through a loan. Contact a lender to see what kind of deals you can get on the interest rate for a loan. Perhaps you could use your car as loan collateral and repay more urgent debts with the loan funds. Make sure you pay your loan back on time.
Consider filing for bankruptcy. A bad mark will be left on your credit report whether you file a Chapter 7 or Chapter 13 bankruptcy. However, missed payments and high debt will also lower your rating. Bankruptcy could let you start over.
Sometimes, you can use your retirement or 401K money to pay for credit cards. Borrow against your retirement fund only if you are confident about your ability to pay the money you borrowed. If not, you will owe taxes and penalties on the account.
Try to find a reputable consumer counselor in your area. This type of office can assist you into combining your accounts in order to better manage debt. Going through a business such as this one won’t be as harmful to your credit rating as other companies that offer to get you out of debt.
If you cannot borrow money from anywhere else, a family member or a friend may be willing to help you out. Specify exactly when and how the money will be repaid and honor that promise. Do not damage your relationship over money.
If you work with a debt consolidation company, make sure they look at your unique situation and help you plan. If you meet with a financial counselor who rushes you, doesn’t know your details and give you a cookie cutter type of financial plan, then don’t waste your money or time on them. You need a counselor who is willing to tailor a program specifically for you.
Inquire of the privacy policy. Know how the information you give the company is going to be stored. Do they encrypt their files? If such precautions are not in place, you leave yourself open to identity theft should a hacker get your information.
Debt Consolidation
Learn the physical location of your debt consolidation service. There are several states that don’t require credentials or licensing for people to begin a debt consolidation business. Because of this, you want to avoid companies who do business in those states. You can find this information on the web.
Even a debt consolidation loan comes with fine print, so be sure to read your contract in full. You may be surprised by the fees and costs that arise. The point of this loan is to help you reduce your debts, not increase them, so know what you are getting into.
If you are looking at debt consolidation as a way out, seek out a family member who might be of some financial assistance. This might be a good method of repaying debt in a single monthly chunk. You may also be able to avoid interest fees by doing this.
If you’re trying to get out of debt, you’ll need to have patience. Debt can accumulate much more quickly than it can be paid off. Getting a plan together and obtaining a loan that you can afford will help you get out from under that debt load sooner than you think.
You should now understand that reducing or even eliminating your debt does not have to be difficult, as long as you are knowledgeable on the debt consolidation process. You can simply get all your bills combined into one easy payment each month. Use the tips you read above to help you get started on your journey of getting out of debt.
This is a limited-time offer. We are not able to guarantee availability if you wait!
