Debt burdens have the ability to make life truly miserable for those dealing with them. That said, there are things that can be done to make the situation much better, with debt consolidation being among them. Read on for some useful information about assessing the available options and making life better.
Look into whether the debt consolidation firm you are considering approaches things individually or if they use a “one size fits all” approach. Quite often, those general approaches can be pretty cheap, but it may not be the best fit for your specific need. They may even cost you more money in the long run. A custom approach is typically the best.
An simple way to reduce your debt or lower your monthly payments is by contacting your creditors. Many creditors are more than willing to work with consumers to resolve their debt situation. If you have a credit card and cannot afford the monthly payment, call the credit card company and explain your situation. The credit card company may be willing to lower your minimum payment; however, they will not let you charge using the card.
Refinancing your home could be a good debt consolidation strategy. Find a financial institution willing to refinance your home and take some cash out at closing. Use the cash to pay your debt off and make your mortgage payments on time. Compare the interest rate of your mortgage to what creditors are charging you.
It is very important to select a debt consolidation agency with a good reputation. Do plenty of background research and contact your Better Business Bureau to make sure the professionals you are interested in are reliable and properly licensed. Do not hire a debt consolidation specialist who has some complaints pending against them.
A non-profit debt consolidation agency is not necessarily a better option. Regardless of the status of your debt consolidation agency, contact the Better Business Bureau to make sure it is a legitimate business. If you find that some complaints have been filed or come across some bad reviews online, find another option.
Find out how the debt consolidation company is funded, and do not do business with them if they refuse to disclose this information. If they say they are a non-profit organization, make sure to check with the state to see if that is true. Also, if they say they are tax-exempt, check that out too.
Always call your state’s consumer protection agency before signing anything with a debt consolidation agency. Make sure the agency is properly registered, has a valid license and no complaints filed. You should not work with a professional who is about to lose their license because of complaints filed by consumers.
It is important to be aware of all costs associated with debt consolidation. Reliable professionals should have a brochure with their fee structure. Debt consolidation professionals are not able to take any of your money before they have performed a service. Don’t pay set-up fees just for opening an account there.
Ask yourself how you ended up with a high amount of debt. You must decide this prior to assuming any consolidation loans. If you’re unable to fix what caused it, treating your symptoms will not help. Locate the problem, end it, and then go forward in paying off your debts.
Carefully consider location when you are choosing a debt consolidation company. While you should check certification and licensing anyway, remember that not all states require licensing. Two of these states are Florida and Maryland. So, if the company you’re considering is in one of these states, proceed with careful caution.
Find out what type of educational materials or workshops the debt consolidation company has available. Are they offered at no cost to you? Are the materials found on the Internet or will they be shipped to your house? A debt management plan should not be your only option, and if a company claims it is, work with someone else.
If your debts aren’t truly putting you on the bring of bankruptcy, debt management might be a better solution for you. A company will work on your behalf to talk to your creditors and ask them for lower interest rates or payment plans you can handle. This can be a better solution than consolidation in many cases, so try it first.
When working on a debt management plan during debt consolidation, you need to make sure that you bring all of your accounts current. Aging debt needs to be wrapped up into any current debt. If you have any old student loans or debt that is over 4 years old without a payment, get it all consolidated into the new plan.
When negotiating with creditors, explain to them your plan for freeing yourself from debt. Most creditors will listen and may even help advise you on how to pay yourself out of debt quickly. Additionally, by explaining your plan to your creditor, the creditor may be more willing to work with you on getting you out of debt.
Don’t allow companies to access your credit report unnecessarily because excess requests for your credit report will reflect negatively on your report. You do not want to have too many people access your credit report, since this can lower your credit score. Be sure the lender knows you are serious about this.
It is hard to exaggerate the difficulty that extreme amounts of debt can have on any individual or family. Therefore, it really does pay to explore the options available for solving the problem, including that of debt consolidation. We hope the information above has provided some valuable insights on the process and the benefits it can provide.