Look for a debt consolidation loan with low fixed rates. Without this, you wont know what to pay every month and that can make things hard. Search for a loan that give you decent rates, allowing you to be in a better position than today.
Remember that your lenders want to be paid back, even if its not in full. The cost of using a collections agency or going to court ends up coming out of the money you owe, and they dont want to go that far. Talk to them about dealing with the situation through reduced interest rates or payment plans before considering a consolidation loan. Get your credit report before meeting with a debt consolidation professional. Show them your credit report to give them an idea of what your current situation is like. It will be easier for your counselor to help you if they can get a good idea of how much money you owe.
Another option to consider when consolidating your debt is that of borrowing cash from family. This could be an easier method to help you with lower monthly payments each month. You may even be able to save on interest payments by making payments to one creditor rather than several. If you are checking out debt consolidation programs, you shouldnt automatically think that a non-profit company will provide you with better terms. This is often used to disguise predatory lenders, so you may end up with poor loan terms. Check with your Better Business Bureau or try to find a service that someone can recommend.
Keep a written log of each conversation you have with your creditors. In the log write down the date, time and person you spoke with. Also, include any information discussed. Always let whomever you are speaking to know that you are keeping a written log of the conversation. This will help ensure that they will not honor their offers.
Debt consolidation works best when applied to credit cards. If you have significant balances on various cards, youre probably paying way too much in interest and could benefit greatly from a debt consolidation loan. See if you cant combine all of the debt into one payment with a favorable interest rate, and limit your credit card spending once that is accomplished.
Find out whether a debt consolidation company will take your unique situation into account. A one size fits all approach generally does not work when it comes to these kinds of financial matters. You want to work with someone that will take the time to determine what is going on with you and figure out how best to address the situation. Find out whether a debt consolidation company is a “home equity loan” provider in disguise. Some debt consolidation companies really just want you to take out a home equity loan. Dont let this be you. After all, your home is the most important thing you have. If you find out a company wants you to take out a loan on your home, move on. 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. Before restructuring your financial situation with a debt consolidation loan, get a copy of your credit report. Analyze your habits and see where you stand with the major credit bureaus. Doing this will help you figure out what you have been doing wrong and what habits you need to change going forward. 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 states laws. Each state is different, and you need a licensed and certified debt specialist that knows about the different laws by states.
Generally, debt consolidation takes one of three forms. Make sure you are aware of all of them so you know what your options are and what you are getting yourself into. For example, a second mortgage or a home equity line is usually one choice. Depending on what you go with, your interest rates could vary. You now know more about debt consolidation, and you can work towards finding the right solution for your needs. You need a solid plan, and you need a company that is going to fight on your side.
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While the decision isnt easy, it should now be something you are equipped to do.. Debt consolidation works best when applied to credit cards. If you have significant balances on various cards, youre probably paying way too much in interest and could benefit greatly from a debt consolidation loan. See if you cant combine all of the debt into one payment with a favorable interest rate, and limit your credit card spending once that is accomplished.