Debt consolidation is a good option if you need help with managing your payments to your different creditors or cannot afford these payments anymore. Although, keep in mind that getting your finances in order is not an overnight process. It’ll take time, and a plan is needed to succeed. The information that follows should help you make good choices when you’re considering consolidation.
Are you on life insurance? Many life insurance policies allow you to cash in your policy. Call your insurance agency to see if you can cash in your policy. It may help you reduce your debt to a more manageable level.
Do not borrow from a professional you know nothing about. There are many different types of unscrupulous loan providers. If you borrow money for consolidating debt, make sure the loan provider has a great reputation and a reasonable interest rate compared to what the creditors are currently charging you.
Family can step in to give you a loan when no one else will. Be sure to clarify the precise terms of repayment and keep your word. Personal relationships need to be treasured before money.
You might borrow against your retirement plan if you are truly desperate to lower your debt. This lets you borrow from your own money instead of an expensive bank. It is a little risky, though, as you’re borrowing from funds you’ll likely need in retirement.
Rather than getting a loan through debt consolidation, think about paying the credit cards off through what’s called a “snowball” tactic. Start with the credit card that has the highest rate and pay off its balance as quickly as possible. Once this account is paid off, move on to the next card with high interests. This might be a solution that could work very well for you.
Find out about any hidden fees that a debt consolidation company may charge. They should have a listing of their services and the fees for each one. The staff cannot take your money until service is rendered. You should make sure you don’t agree to any setup fees when you open an account.
Be sure you’re able to speak with your debt consolidation company whenever necessary. Also, call your counselor if you have any questions or concerns. Therefore, you want the customer service department to be solid.
Debt Consolidation
You’ll want to find out the physical location of the debt consolidation company. Some states don’t make a debt consolidation service become licensed before opening up. You must avoid consolidation services from these states. It’s easy to learn this information.
If a debt consolidation company is located in either Florida or Maryland, they do not need a license. If you live in one of these states, you might want to use a firm from another state which does require licensing. You won’t have much recourse if something goes awry with an unlicensed company.
Even if you are given a longer term for repayment of a consolidation loan, aim to get it all paid off within five years. If you wait too long to pay it back the interest on the loan requires you to pay back much more than you owe, so five years should be the most amount of time to pay the loan back.
If a debt consolidation company offers you a loan that just sounds too good, avoid it. Lenders know that lending you money may be risky, therefore you’ll need to pay for them to help. Anyone offering a deal too good to be true is probably trying to scam you.
If you approach debt consolidation strategically, it really can help. You need to make a phone call and know what to expect. This article has shown you the light; now is the time for you to follow through.
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