Read The Smiths
HOME HEALTH RELATIONSHIPS FINANCE ENTERTAINMENT TECH TRAVEL HUMOR

Considering Debt Consolidation? Read This First

By: Jacky W.

Debt Consolidation

Many people who consolidate their debts (taking out one loan to pay off many others) end up paying far more than they would have otherwise. In the case of home equity loans, an alarming number of borrowers even end up losing their homes.

Debt consolidation, rightfully, has a bad reputation. You don't want to end up as one of the people who lost their home. Still, you may be able to benefit from consolidation if you carefully explore your options and keep these fifteen tips in mind.

1. Pay off debts

Treat debt consolidation as a way to pay off your debts, not as a way to free up extra spending money. You've got to control your spending or you'll just go deeper and deeper into debt. Unless you solve the underlying problem, you'll soon be back in debt, only you'll have the consolidation loan along with all the others. Get yourself on a spending plan and stick to it for several months before consolidating your debts, to prove to yourself that this is going to be a do-able route for you.

If you just want to save money, but you're not in dire straits, simply pay off your debts fast by prioritizing them. Pay as much as you can each month on your highest-rate loan while making minimum payments on your others. This way, you are able to lower your monthly finance charges as quickly as possible.

2. Get your credit report and FICO score

Any loan you get will be based largely on your credit score, so you should find this out before you do anything else. If your credit score reveals that you actually score quite well and have a reasonable credit rating, you may be able to consolidate loans at a lower rate, especially if your credit has improved since you got the loans. Go over your entire credit report carefully to make sure it's accurate. Inaccuracies can hurt your score and keep you from getting the rate your deserve.

3. Negotiate lower interest

Call your credit card company: if you have relatively good credit, you may be able to simply talk to your credit card company and negotiate a lower interest rate. If they won't give you a lower rate, you may be able to transfer your balance to a credit card with a lower long-term rate or a no-interest introductory rate--just make sure you know what your rate will be after the introductory period.

Credit Counseling

A credit counseling agency can give free advice on how to manage your debts.

4. Get help of a credit counseling agency

A reputable credit counseling agency can provide you with free or low-cost advice on how to manage your debt, and they can help you prepare a budget to get your finances under control. Credit counseling, however, does not necessarily mean entering into a debt management program, and you should beware any organization that tries to push you into such a program immediately. In general, be careful when choosing a credit counseling agency. Even agencies that are registered non-profits frequently charge high fees.

5. Sell your car

If you can't afford your car payments, try to sell your car to pay off the loan. If the car gets repossessed, it will end up costing you even more money.

Page 1 of 3123next »

Have something to add to this article?

Special Attention

How To Become A Zen Master (While Doing Household Chores)

By: Donna Smith

1PLs Company (www.1Payday.Loans) is a free online platform where any US resident can find a profitable loan offer: payday loans up to $1,000, installment loans up to $5,000 or personal loans up to $35,000. The borrower can apply online or find direct lenders (addresses and phone numbers) located nearby.

line