Have you heard of debt consolidation? The term has been floating around everywhere recently, but it’s likely you don’t know all the details you’ll need to get one. Fortunately, you will soon learn some useful information. If you’ve been considering debt consolidation, read on to find out how it can work for you. The information will give you the information that you need to make a good financial decision.
Make sure the counselors working for a debt consolidation service have the proper qualifications. Do they have certification by specific organizations? Is your counselor legitimized by working for a reputable company? This can help you sort out the good companies from the bad.
Think about long-term ramifications when you choose a company for debt consolidation. Obviously, you want to get the current situation straightened out, but find out whether or not the company will work with you in the future as well. They may be able to help you avoid debt in the months and years to come as well.
Avoid choosing a debt consolidation company only because they are non-profit. Contrary to what you may believe, “non-profit” does not always equate to great. Be sure to check out the BBB online to find reviews and ratings of any debt consolidation company you are considering.
Find out how a company is calculating your interest rate. You want to choose a firm which offers fixed interest rates. This will allow you to know exactly what’s going to have to be paid during the loan’s life cycle. Look out for debt consolidation plans with adjustable interest rates. Eventually, you will be paying more interest than you did in the beginning.
If you own a home, you may want to consider refinancing your home and taking the cash and paying yourself out of debt. Mortgage rates are low right now; it’s the right time to take advantage of this method. In addition, you may actually get a lower mortgage payment than your original payment.
Make sure any debt consolidation program you are considering is legitimate. If you see offers that are simply too good to be true, then they probably are. Ask a ton of questions and get the answers before you agree to use their services.
Your 401K might help you to pay off debt. Still, it should be a last resort, and you have to commit yourself to putting the money back in. If you don’t, you will pay huge fees.
Find a local consumer credit counselor to help you out. They can teach you how to control your spending while also consolidating your debts. This method isn’t as harmful to your credit as other companies which offer similar services.
A family loan can help you consolidate your debt. This is risky, though, since relationships can be damaged if repayment does not occur. Usually debt consolidation should be a last resort, not a first choice option.
See if the debt consolidator will customize payment programs. Every person has different finances, so each plan should be individualized. A better option is to look for a unique, individuals plan for paying the loan back. Although these may seem to cost more when they start, they can save a lot of money for you after a while.
Keep in touch with your credit counselor. After the consolidation has begun, you may run into questions that you’d like answered. Therefore, you want the customer service department to be solid.
What kind of fees will the company assess? The fees need to be provided in writing and explained fully. Make sure to ask how the loan will be divvied up between each of the creditors you have that need to be paid. There should be a payment schedule that the company can provide to you that shows the breakdown.
Consolidating debt allows you to have one debt payment instead of many. Usually, you should try to work on a 5 year plan of payment, but longer or shorter terms could be considered as well. Then you will have a solid schedule of payments and an attainable goal in sight.
If you’re in the process of Chapter 13 bankruptcy, you may want to consider debt consolidation to help you hold on to your property. You can keep much of your personal or real property if you are able to uphold your obligations and pay off the debt within a 3-5 year time frame. You might even be able to go totally interest-free on these debts.
Most debt consolidation experts will get you debt-free in about three-five years. You need to move on to a different company if the one you are talking to does not talk about this time frame.
Department store credit cards can get you into trouble with higher than average interest rates. This can make them good candidates to add to your debt to consolidate list. If you do use one of these charge cards, pay it off right away. Use such cards sparingly and only on buying items that are a necessity.
Look for a way to save money on your bills. For instance, could you set up a carpool with friends from work? If you find 5 people to carpool with, you’ll be able to pay for gas 1 day instead of 5.
Pay attention to the different kinds of programs for debt consolidation. Some plans bring together all of your bills so you only have to make one payment. This sort of program combines revolving lines of credit and installment loans. The other programs may only consolidate any revolving credit lines.
If you keep both cellular and land line service going, think about giving one of them up. You can also save money by using less cellular minutes. Often, it may be less expensive if you reduce your cell phone minutes every month and keep the land line.
Now, you know more about debt consolidation. It is important that you do as much research as you can on the subject of debt consolidation. This will help you regain control of your finances and give you your life back.