Habitually spending more money than you earn will result in debt. That can be an endless cycle of hustling to make your payments but then being stuck in the same position. Learn about consolidating your debts by reading through this helpful information.
Prior to signing up for a debt consolidation company, be sure you check out your credit report. The first step to fix your debt is to know where it came from. You need to know your debtor and the amount you owe. It is impossible to make any adjustments to your financial situation if you aren’t aware of this.
Are you the owner of a life insurance policy? You can cash it in and pay off your debts. Consult with your insurer and find out the amount you can get from your policy. Your policy may have a cash value which you may borrow to help pay debts.
Let your creditors know if you’re working with a credit counselor or debt consolidation agency. Just this news alone might make them willing to make an independent deal with you. More than likely, they won’t know it on their own, so make sure they know it up front. Work with a counselor to get your finances in control for the long run.
Obtain one loan that will pay all your creditors off; then, call the creditors to make settlement arrangements. They may accept a lump sum which is reduced by as much as thirty percent! Not only does this not hurt your credit score, it might even boost it!
When you’re consolidating the debts you have, be sure you’re thinking about what debts you have that are worth getting consolidated and which ones shouldn’t be. Do not include zero percent loans in your consolidation unless the rate is due to expire. You and your counselor should evaluate each loan individually.
If you’re not able to get money from places, you should see if a loved one is willing to help. Make sure to specify exactly how and when you will pay the money back, and live up to your promise. You don’t want to ruin a relationship over money.
See if the folks who work at the debt consolidation company hold counselor certifications. You can contact NFCC for a list of companies that adhere to certification standards. This will help you to know you are working with professionals who can truly help with your financial situation.
Once you have established a plan for consolidating your debt, you should aim to pay everything in cash. You don’t need to start using your credit cards again. This will cause you to get into the same habits that caused problems in the first place. If you pay with cash then you can’t spend more than you have.
Debt Consolidation
Debt consolidation is not a shortcut solution for long-term money problems. You have to change the way you spend money to get rid of debt. After you have gotten your debt consolidation loan, take a hard look at your financial habits and make necessary adjustments for the future.
If you need to eliminate debt and feel desperate, you might borrow from your own 401k. This lets you borrow money from you rather than getting from a regular bank. Be sure you know what you’re getting into, however. You still want to make sure you’ll have some retirement money left.
Consider negotiating with your lenders before you take on debt consolidation. 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 won’t know what they are willing to offer unless you contact them.
Choose a debt consolidation company that is accessible by phone and email. While you may have already signed the dotted line, you may find that you need further clarity at any given time. You can also use this time to see how well the customer service does to help you with your problems.
Make sure you know what fees are associated with debt consolidation. Ask for the fees in writing. Don’t forget to find out how your payments are going to be split up to address your different debts. They should give you a written payment schedule which explains when each debt will be paid off fully.
With debt consolidation, the main goal is to get a simple single payment that’s affordable to you in any month. Usually, you should try to work on a 5 year plan of payment, but longer or shorter terms could be considered as well. Then you will have a solid schedule of payments and an attainable goal in sight.
If you want to be financially secure, you have to get rid of your debt. Although earning more money is a temporary solution, it is just like putting band-aid on the situation; eventually, it isn’t going to work any more. Taking advantage of the debt consolidation tips from this article can help you resolve your financial problems.
