It is not difficult to understand why debt is the source of major stress and discord in the lives of those immersed in it. However, all is not lost, because debt consolidation can often provide a valuable solution as long as it is approached wisely. Continue reading to learn more about the options.
Do you own a life insurance policy? Considering cashing in on your policy to pay off your debt. To learn how much cash you can obtain from your policy, talk to your insurance agent. It may help you reduce your debt to a more manageable level.
Ask your credit card company if they'd accept a lump payment for a lesser amount than the debt. Many companies will accept 20% to 30% less than the amount you owe currently just to get the cash in hand. If you can scrape up the cash, this is an excellent way to save funds that can go to other debts.
Try paying your debt off with a credit card. Apply for a credit card with no interests and use it to make payments to your creditors. Pay the minimum amount on your credit card once a month. This is a good way to buy more time to pay your debt off.
Consider borrowing money to pay off debt. Contact a loan provider to learn more about the interest rates you qualify for. If you need to, you can use your car for collateral. Just be sure to pay the loan back when it is due.
Check out different debt consolidation companies. While you may think they all do the same thing, that is not true. Each has their own different set of rules, regulations and fees. Before you sign up with any of them, make sure you compare them to find out which is the best for you.
When consolidating your debt, it is extremely important to find a reputable, respected debt consolidation company. Before hiring a debt consolidation company, consider how long the company has been in business, the company's perceived reputation and the amount of money that the company charges in fees. Shop around to find a debt consolidation company that meets your needs.
Is a life insurance policy something that you have? You might want to consider cashing in the policy so that you could pay your debts. Get in touch with your insurance provider to ask much your policy is worth. Sometimes you can borrow a small part of your policy investment to help cover the debt.
Ask how much you will be charged by the debt consolidation service. All fees should be clearly stated and explained so that you can assess the total cost of them. Debt consolidation professionals don't get a dime from you until they perform their services for you. Do not pay set up fees until the debt consolidation specialists you hired negotiate with your creditors.
If you think debt consolidation will allow you to go back to your old ways, do not use it! You cannot use this method just so you have extra money each month to blow on dining out or going to the movies. Only use it if that extra money will go towards other debts, such as grocery bills.
Avoid any loan offer that sounds like an unbelievably good deal. Lenders will charge you higher interest rates and make the loan application process difficult because you are a high risk client. Don't let the lure of a good deal override your common sense.
If you think a debt consolidation loan will be difficult for you to pay off, even though it lowers your monthly burden, consider bankruptcy instead. Debt consolidation is meant to restructure your payment and reduce interest, but defaulting will put you in even more hot water. Weigh your options, and if the situation is bleak with debt consolidation, talk to a credit counselor before signing anything.
If you want to have a debt consolidation agency help you, ask how your funds will be protected before payments to your creditors are made. Some agencies will keep your funds in a savings account until it is time to pay your creditors while others might invest the funds for a short amount of time.
When some people become buried in debt, they often make terrible choices. Now, this unnecessary - and sometimes tragic - step can be avoided. You now understand the debt consolidation arena, and can start taking advantage of this financial tool to improve your situation.