If you’re serious about getting your finances together, you should consider debt consolidation. When you put all of your debts together, you can start making headway toward a stronger financial future, and debt consolidation is one of the ways to do that. Here are some debt consolidation tips to help you out.
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.
Understand the difference between debt consolidation and a home equity loan. Many companies will guise a home equity loan (where you put your home on the line for the debt) as true debt consolidation. That’s not always the wisest move to make, especially if you have a family involved. Know the differences and the risks before making that decision.
Don’t look at debt consolidation as a horrible thing that you are doing alone. This is a real common situation. Millions of people have been exactly where you are right now, and they’ve survived. Know that going in. It’s nothing to get worked up about. Channel that potential anxiety into the right action steps to move forward.
Investigate any debt consolidation company you are considering. That means calling the Better Business Bureau, but it also means you need to do some online research. Most companies will have reviews written by people who used them. Watch for any company that does not seem to have positive reviews, that could be a problem.
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.
It is important that you read the fine print of any debt consolidation loan before agreeing to it. For instance, let’s say you get a home equity loan. Should you default on this loan, your lender can take your home from you. Prevent this from occurring by reading the fine print.
Before you decide which debt consolidation loan is right for you, analyze your current debt carefully. Only include the debt for which you are paying high interest on and calculate your savings with a low interest loan. It’s okay to keep some of your debt out of the consolidation loan, so long as the interest is low enough.
Find out whether you can use a small amount of money from your retirement fund to get a grip on your credit cards that have high interest rates. Do not consider this unless you know for sure you can pay back the amount withdrawn. If it is not, taxes and penalties may make this decision more costly than you thought.
Think carefully about whether you want to go ahead with debt consolidation. Consider all the facts and consider all the choices you have for paying back your debts. You might find it’s better to go ahead with the debt consolidation, but you may decide it is better to just ask your parents for a loan instead.
Now that you’ve learned a little about debt consolidation and how it can help you, start looking into ways you can get started. Use the information laid out here to turn you in the right direction and to provide a springboard for starting your own debt consolidation efforts. Keep your head up and your financial picture will improve.