Curious About Debt Consolidation?

Once you’ve found yourself in debt, it can be a struggle to stay afloat and even harder to get out of it. Choosing a debt consolidation loan or credit counseling program to consolidate debt is different to each person based on your unique financial situation. Once finding the right program it can help you lower your monthly debt payments (you’ll be amazed as to how much lower your payments may be), avoid filing bankruptcy, and eliminate collection agencies from calling you. Debt consolidating won’t get rid of your debt overnight but it will help you on a new path with some flexibility. Your goal is to get off on the right foot and to get the debt under control into one easy monthly payment. It’s best to research and explore your options.

1) If you have enough equity in your home and not afraid of a ‘down’ market (these days the market has been pointing down for housing), it might not be a bad idea to take out a low interest home equity loan to pay off your other bills. Just make sure your spending is under control and reinvest the money back into your home equity when your situation improves.

2) When looking to consolidate your loan, stick with well known institutions even if the deal isn’t as attractive. There are many ‘not for profit’ organizations that promise to help your situation and get you out of debt with no costs involved. Many of these organizations are fronts for ‘loan sharks’ that will screw you over. Seek advice from those you trust.

3) If you don’t understand something that they ask you to sign, don’t sign it! Ask a friend or family member to help.

4) Make a budget by writing down your monthly income after taxes and subtract your monthly expenses such as your rent/mortgage payment, groceries, utilities, other loan payments, insurance. Use what is left to pay off your debts each month and find new ways to cut back spending. You’ll be amazed what you’ll be over to save over a year by removing things you don’t need (maybe a cable subscription? daily take-out food?).