Debt consolidation may be what you need if you’re trying to figure out what can be done to get your debt under control. For example. You’re burdened with bills and not enough money to handle them all. Here are a few tips to help you decide if debt consolidation is right for you and how to proceed.
If you have a life insurance policy with a cash value!
You can borrow against your policy and you do not have to pay it back if you are unable to or don’t want to. Just keep in mind, the monies you borrow will be deducted from what the beneficiaries will receive.
Make sure the debt consolidation company has a good reputation!
Do your homework. Check if the company is a member of an organization like the National Foundation of Credit Counseling (NFCC). The company may verbalize you are a member, but you should always trust but verify to make sure what they are telling you is true. A member of the NFCC has to conform to certain rules and employ certified credit counselors.
Check with the Better Business Bureau!
Before you commit to a specific debt consolidation company, check its records with the Better Business Bureau (BBB). There are a lot of superficial “opportunities” in the debt consolidation business. If you’re not careful, it’s very easy to go down the wrong path. Checking the status of a company on the BBB will help you weed out the bad from the good.
Consider Using Your Home Equity!
Another way to consolidate your debt into one monthly payment would be to take out a home equity loan, provided you own a home. Since the interest rates on these loans are tax-deductible, you can save money in several different ways, if you can get a good interest rate.
Look for a local debt consolidation company you can visit!
As the company negotiates with your creditors and manager’s payments, you will have to send a monthly payment to your debt consolidation account and the monies will then be distributed to the different creditors the service negotiated with.
Call your creditor and negotiate different terms!
If you fall behind on your payments, most creditors are willing to work with you if you give the company a call and explain your problem. Call the creditor and negotiate for better terms (like a lower payment). Keep in mind, this will discontinue the use of your card.
Debt Consolidation Loans
Have no impact on your credit rating and can help you pay off your debt with no additional penalty. Provided you keep up with the payments, this can be a very powerful option.
Transfer your credit card balance!
Transferring the balance from a high-interest rate credit card to a 0% introductory APR credit card is another option that could save you a lot of money. This will allow you the chance to pay off the balance a lot easier. However, you must be diligent and disciplined to handle this form of debt consolidation or it will not help you at all.
Considering all the facts!
If you’re thinking about debt consolidation, you have a lot of options. Although learning about it may feel overwhelming, having tons of debt is much more stressful.
I hope this knowledge helps you get back on track.
By the Way
If you would like, you can contact us for a free consultation & credit analysis with a financial coach to discuss your dreams and exactly how we can help you reach your financial goals.
Here’s the link to Schedule a Call.