Debt consolidation can be an effective way to manage debt by using a plan and a budget. Even though all of your financial problems may not be solved, you’ll only have to focus on one monthly payment that will pay your creditors. If you’ve fallen hopelessly behind on your debts, you need to read this debt consolidation advice.
Just because a debt consolidation firm says they are non-profit, that does not make them a good choice. Though it may surprise you, non-profit is not necessarily indicative of quality. The best way to find out if any company is worth your business is by checking them out with the Better Business Bureau at www.bbb.org.
Think about bankruptcy instead. Bankruptcy does negatively affect your credit. However, if you are missing payments and unable to pay off your debt, your credit may already be bad. Bankruptcy allows you to lower your debt and put you back on the path towards financial health.
Home owners can refinance their mortgage to pay down their debts. This method is optimal for this time period, as mortgage rates are small. Furthermore, you will be able to lower the amount of your house payment.
You may be able to pay off your high interest credit cards by drawing some money from your 401K or retirement fund. Only resort to this option if you feel that the money can be repaid. If you don’t, you will pay huge fees.
If you cannot borrow money from anywhere else, a family member or a friend may be willing to help you out. Be sure that you be specific on when and how you will repay them, and keep your promise. You should not risk damaging your relationship with them.
An effective method of consolidating your debt is simply taking out a loan from a friend or family member. Use caution as an unpaid loan can ruin a relationship. Only borrow money from someone your know if you have no other options.
If you are considering a debt consolidation company, ask about individualized programs. You cannot use a one-size plan that is applied to all debtors. A better option is a company that uses individualized payment plans. These companies generally are a little more expensive up front; however, you will save money throughout the length of your debt consolidation.
Always be fully aware of any fees and charges that will be charged to you for the services of a debt consolidation company. The company should give you a detailed account of the fee structure. The debt professionals shouldn’t be taking money until services are performed. Don’t agree to pay them fees to set up your account.
Make sure that you find out the fees charged by debt consolidation companies. Ask for the fees in writing. You should also ask about the way your payments will be distributed among creditors. You should receive a payment schedule detailing your payment dates and amounts.
A top quality debt consolidation firm will teach you ways to manage your financial obligations in order to become debt free. If they offer it, sign up for workshops or classes to learn more about fixing your financial situation. If the debt consolidation counselor you are using does not provide these services, look for a different agency.
Debt consolidation businesses that work out of Maryland or Florida aren’t required to be licensed. If you are located in these states, consider working with a debt consolidation counselor from out of state. You will have very little legal protection when working with a professional who does not have to be licensed.
Debt consolidation may be the answer if you want to get rid of your debt. After the host of great tips you just read, now is the time to finally take care of your debt by combining everything into one simple payment. Use your new knowledge and erase your debt.