Are you familiar with what debt consolidation is? You might be in a situation where you are in over your head with debt for a variety of reasons, and you feel unable to gain control. Debt consolidation can be the solution that you’ve been looking for. The information that follows will help you figure out what your next steps should be.
When signing up with a debt consolidation company, you should make sure that the workers there are qualified to do their job. Are these counselors certified by any specific organization? What is their education and training? This lets you know if a particular company is worthwhile.
Do you own a life insurance policy? Consider cashing it in to pay your debts. Talk to your insurance agent and see what the cash value of your policy could be. In some cases, you get to borrow some of your policy investment in order to pay current debt.
A lot of people find that their monthly payments are able to get lowered if they just call the creditors they owe money to. In general, creditors are often willing to be flexible. If you’ve been having trouble paying your credit card payments then you need to contact the company that gave you the card to see if there’s anything you can do to work this situation out.
When considering a debt consolidation loan, look for one with a low fixed interest rate. If the rate is not fixed, you may not know how much you’ll need to pay monthly. Look for a loan that’s one-stop and gives you good terms for the loan’s life so you’re able to be in a good place financially in the future.
Interest Rate
Look into exactly how the interest rate is determined. The best thing to go with would be an interest rate that’s fixed. This keeps your payments stable for the term of the loan. Watch out for variable interest rate plans. A lot of the time this will make it to where you have to pay them more interest than the money you owed.
If you are a homeowner in need of debt consolidation, consider the possibilities of refinancing your mortgage and using the money for debt relief. Mortgage rates have never been lower, and refinancing to pay off old debt has never been a more attractive option. Furthermore, you will be able to lower the amount of your house payment.
Scams abound when it comes to debt consolidation. Deals that look incredible are usually not true. Be sure you ask plenty of questions prior to signing any contract for debt consolidation and do not sign for their services until you get some clear answers.
Think about which debts you want to consolidate. For instance, zero-percent interest rate loans should usually not be consolidated with a loan that is higher interest. Discuss each debt with your debt consolidator to determine which ones should be included.
Is the debt consolidation firm you are considering certified? You can find certified counselors and companies at the NFCC. This way you can have peace of mind knowing that you’re making the right decision and the people are there to help.
You may be able to consolidate your debts by borrowing money from an acquaintance. Personal relationships are often put into jeopardy when money becomes a factor. This is a way to actually pay down debt, but it really ought to be a last resort. Only go down this road if you know how and when you can pay them back.
There is no law stating consolidators in Maryland or Florida must have a license. If you are located in these states, consider working with a debt consolidation counselor from out of state. You have no legal protection if you choose a local firm.
If you’re in the process of Chapter 13 bankruptcy, you may want to consider debt consolidation to help you hold on to your property. If you agree to pay all your debts within three to five years, you will not lose any personal property. This process may even eliminate all the interest you owe on your debt.
With your options explored, now you can choose your fate. This should match your personal situation, and be made with the utmost care. It is time to start becoming debt-free. You no longer have to let it rule your life.
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