Consolidating your debt can be the start of your financial freedom. It is a long process and it doesn’t always yield the quick results you deserve, but it is certainly a step up from having to file for bankruptcy. There are plenty of things you need to know about this process before you get started. Use this article full of carefully compiled tips to help you reach your goals!
Don’t fall victim to companies claiming to cut your monthly payments in half with just one phone call. It is understandable that you want a quick solution to your problems, however, you can just be making your situation worse. Sit down and consider the different debt consolidation options that are available to you and decide on the pros and cons.
Consider a bill consolidation service to help with your monthly debt. When you seek to consolidate debt, paying monthly bills to individual companies can create confusion and missed payments. Use a consolidation service that will pay these providers for you. You supply them with one lump sum each month and they will quickly dole it out for you automatically.
Consolidate all of your high interest credit cards onto one credit card with a reasonable interest level. If you’ve got multiple cards above 20% interest, you are paying way too much. That money going to interest could be helping you pay off that debt! Plus multiple cards means multiple minimum payments. It’s best to attack one card alone if you can.
Seek the consult of a consolidation service. Talking to a credible company about your debt can help you establish where you stand. They may help you realize that your situation is not as bad as you expected. You may also find that the debt is larger than you care to deal with alone, which may prompt you to move forward with the service.
Talk to friends, family and coworkers. You aren’t the only one with money problems, and chances are that someone you know already has some experience with debt consolidation. This is a great way for you to find a company you can trust, so that you can avoid using a less than reputable company.
Don’t make any decisions on a whim. Seriously, you’re talking about your personal finances here, something that will affect the quality of your life in many ways. Because of this, real research is needed. Understand what got you here, learn about your options, and fully research the debt consolidation firms you are considering.
When thinking of using a company to consolidate your debt, you should remember to research them and go over a few different reviews of that place. This will allow you to find out who is the best for your situation.
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.
Why do you want to consider debt consolidation to help you out? If it is only to reduce your payments so that you have more money to spend on discretionary things, such as entertainment or going out to eat, you are making a huge mistake. This method is only for those who are intent on paying down debt.
When evaluating whether to use a certain debt consolidation agency, see if they are licensed by an outside organization, preferably the NFCC. Test them as well by seeing if they know how your debt consolidation situation is going to be affected by your state’s laws. Each state is different, and you need a licensed and certified debt specialist that knows about the different laws by states.
Ask your debt consolidation to list their services in writing. By requiring a legal contract stating what the debt consolidation company is to do, you can rest assured that all of your requirements are defined and completed. This legal contract can also protect you if you end up having to seek legal counsel against the debt consolidation company.
Beware of debt consolidation companies that ask for any sort of fees upfront. This is typically a tell-tale sign of a scam. If you are placed in this situation, leave the situation immediately. This is not the way a debt consolidation company should be doing business, and chances are that your finances are not in good hands.
You’ll want to find out the physical location of the debt consolidation company. There are a few states which require no licensing or credentials to start up a debt consolidation company. You should always verify that the company you choose is not located in these states. Finding this information should be pretty simple, and you will be glad you took this step.
If you have an equity line of credit which is secured by your home, consider taking out the equity you have to help you pay off your other debts before getting a consolidation loan. If you have enough to get rid of smaller debts, you will end up paying less each month, leaving more to put down on your larger debts.
It is important that you know exactly what you’re up against financially. Debt consolidation in any form is often overlooked as a way to get out of debt. Instead of letting your finances drift off, get the help you need. Follow the simple advice discussed in this article to be on your way to a brighter financial future.