Everybody at some point in their life finds debt an overwhelming problem. Due to all the many things we get involved in, at times we have to send off too many bills each month. If you would like to simplify the process and get out of debt quickly, then read the following article on debt consolidation.
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.
Let creditors know you are using a debt consolidation agency. They may be willing to discuss alternative arrangements with you. More than likely, they won’t know it on their own, so make sure they know it up front. Knowing that you are working hard to solve your problems can make a big difference.
If you’re struggling with high interest rates on your credit card, look for a card with a lower rate that you can consolidate all your debts with. This can save on interest and leave you with just one payment. After your consolidation to one card is complete, try to pay it off prior to the expiration of the introductory rate.
Before applying for a debt consolidation loan, contact the creditors you owe. Ask them if they can negotiate any of the the terms you are obligated to. Doing this prior to getting the debt consolidation loan will leave you in better shape to really minimize your overall debt once the loan is paid off and give you better figures to work with as well.
Sometimes, you can use your retirement or 401K money to pay for credit cards. It’s crucial that you pay back any money to your fund that you take out, though. Income taxes and penalties will be due on money taken out and not replaced.
Make sure to discuss your plans for debt consolidation with your spouse before entering into a program. You need to be on the same financial page as your partner in order to truly reduce your debt and improve your financial situation. If you don’t take the time to discuss things, your spouse could end up continuing to rack up debt, hurting your financial situation in the long run.
If you have student loans that are from federal programs, consider consolidating them only after your grace period on those loans has ended. If you consolidation sooner, you can lose your grace period, making it necessary for you to start repayment immediately. Timing is everything with federal loans, so make sure you understand the terms of your original agreement before signing on for consolidation.
Don’t sign anything until you know what you’re agreeing to. Make sure you have a written copy of the terms and fees you will be responsible for, before you make a decision. It’s important for you to make sure there are no special surprises, and that at the end of the arrangement you’ll be in a better position financially.
It is best to work with a debt consolidation professional who is a member of debt consolidation organization. Ask if they are a member of the National Foundation for Credit Counseling or of the AICCCA. A professional who is not a member of any recognized organization is not a good choice.
Use a zero percent interest rate credit card offer to transfer your high interest debt. These rates are typically good for 12 to 18 months before they begin charging high interest rates. this is only a wise choice if you know you can pay off the full amount before the interest rate increases.
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 state’s laws. Each state is different, and you need a licensed and certified debt specialist that knows about the different laws by states.
Be sure your first talk with a credit counselor or debt consolidation agent happens for free. They should be able to do a preliminary analysis of who you owe, how the company can help you, and what options are available. If you cannot get a simple introductory session, look elsewhere.
After reading the above information it doesn’t have to be that complicated each month when you pay your bills. If you would like the comfort of just paying one bill to all your creditors each month, then debt consolidation is for you. Take the information learned today and incorporate it into your own life to knock down those bills as quickly as possible.
