A lot of people want to improve their financial situation. If you’re like most people, you do as well. That’s why it’s a good idea for you to think about debt consolidation. Debt consolidation can be the perfect way for you to take care of your bills once and for all. Here are just a few debt consolidation tips to get you started.
One sign that a debt consolidation company is reputable is whether or not they are a member of an organization, like the National Foundation for Credit Counseling. Even if the company verbally confirms to you that they are a member, make sure you still research it to make sure what they are saying is true. A member of an organization like the NFCC has to follow certain rules, like only employing certified credit counselors.
Understand if your home is in jeopardy with the type of debt consolidation you are considering. Oftentimes, debt consolidation companies put together plans that include a HELOC (home equity line of credit). This essentially ties your home to your debt. If you mess up, your home could be affected. Be aware before making any decisions.
Figure out if you’re dealing with people that are certified to counsel you when getting debt consolidation. Check with the NFCC to find reputable companies and counselors. This ensures you know you’re making a good decision and using good company.
When consolidating your debt, it is extremely important to find a reputable, respected debt consolidation company. Before hiring a debt consolidation company, consider how long the company has been in business, the company’s perceived reputation, and the amount of money that the company charges in fees. Shop around to find a debt consolidation company that meets your needs.
Make sure the money you pay the debt consolidation company gets to your creditors. Follow up every month to make sure that your creditors have gotten a payment. Some debt consolidation companies tend to skim some of your payment to put toward various fees, but you need to make sure you know what is going on.
Choosing a consolidation loan means considering the rate. Not only do you need to know how high it is, but also whether it is fixed or variable. You never know what the future might bring as far as interest rates go, so a long-term variable loan can truly cripple you financially.
When creating a list of creditors, don’t forget a single company or person. Include your car payments, mortgage, medical bills, overdue library books, student loan, utility bills, phone bills, cable bills, internet costs, magazine subscriptions, and anything else you might owe. Be sure to make a comprehensive list so that you can easily figure out what your next step should be.
Think carefully before signing up with a debt consolidation company. You may be in a state of panic or worry about your financial situation, and you may be acting in a rushed or desperate manner. Think carefully about what matters for you in the long run, and make choices accordingly.
Do high interest rates have you in a panic? If your interest rates are quite high, you will likely pay a tremendous amount in interest by the time your original debt is paid off. Debt consolidation can be one means to lowering your interest rate, so see if this might be a good option for you.
For debt consolidation, you can borrow against your life insurance policy. The good thing about this is, you do not have to pay the borrowed money back if you do not have it or you don’t want to. Instead, it will lower the amount paid to beneficiaries upon your death.
Consider getting a new credit card to consolidate your debt. It can be quite annoying to continue to get the 0% interest credit card offers in the mail, but the next time you get one, look at it. You may find that you are able to put all, or most of your debt on this card while paying no interest.
Make sure to pay your debt manager at least ten days before your payments are due to each creditor. This ensures that the money makes it to them in time and you don’t end up paying additional late fees. You can speak to your manager about scheduling your dates in this manner.
There are many websites which offer you the ability to literally comparison shop for debt consolidation loans and companies online, just like you do for a mortgage or insurance. Be careful what information they ask for as you should never offer your social security number to such a website, for example.
Before you sign on the dotted line at a credit consolidation company, be sure to check out the terms of the loan. Find out what the interest rate will be, if there are any added fees, or hidden costs. Most importantly, find out how long the loan term is. The longer the repayment period is, the more interest you will pay, and you could actually become further in debt.
Find a company that will set up a free meeting with you to discuss debt consolidation. You need to outline your finances and share all relevant information. If you can, meet with various local counselors that deal with the debt consolidation services that you’re interested in.
Before you contact a debt consolidator, gather up all of your financial paperwork and organize them. You will need copies of your bills, bank statements, and any paperwork that describes your debt in detail. Bring along contracts from your creditors. Having these at the ready will make the application process go faster.
As mentioned in the introduction, everyone wants their financial situation to get better. If you are serious about having more money in your life, start thinking about debt consolidation. With all the information in this article, you should be able to start as soon as today. When you have your debts consolidated you’ll feel much better.
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