Debt Consolidation: Explore Your Options
Today it’s not unusual when consumers have multiple debts. Many people have mortgages, auto loans,
credit cards, personal loans and etc. Of course, making so many payments each month is complicated
and that’s why the idea of debt consolidation seems so attractive. Paying off the debt takes a lot of
energy and financial resources so it’s easy to understand why people who manage a few loans want to
ease the burden.
Debt consolidation can make things easier. Moreover, getting out of debt through consolidating it has
many benefits, for example, a single monthly payment, lower interest and stopping collection calls.
However, the truth is that getting a debt consolidation loan is not so easy. Many banks don’t make even
small consolidation loans anymore. Fortunately, you get a good chance to get one if you use, for
example, Personal Money Service
for debt consolidation or other alternative options. Let’s take a closer look at the process of debt
consolidation and figure out how to get the most use of it.
Ask Yourself the Necessary Questions
First of all, it’s necessary to understand if debt consolidation is exactly what you need. That’s why start
from asking yourself these questions:
What is the amount of my debt? Yes, it may seem like an easy question but it’s easy to get confused in
numbers when you have multiple debts.
Where does my credit stand now? Some ways of debt consolidation affect credit scores more than
others so before you start you need to understand if your credit score is strong enough for that. Don’t
guess: ask for your credit report and check your credit score because you have to be sure.
How far can I go to get out of debt? Ask yourself this important question to understand how motivated
you are. It’s important to understand that getting out of debt is a complicated process that requires
sacrificing and changing your lifestyle, so your family members should be ready to support you and
follow a budget with you.
Know Your Options
If you’ve gave honest answers for these questions, it’s time to take a look at the options available.
Debt Consolidation Loan
As mentioned above, today it’s not that easy to get a debt consolidation loan from a bank because many
banks don’t offer this option anymore. As an alternative, you may try peer-to-peer lending. However,
make sure you have a good credit to qualify! Also you can turn to your friends of relatives and ask them
for help. But be serious and get a loan agreement
ready, be responsible and carry such a loan like it’s a bank loan because most likely, you know that
debts can destroy relationship.
Remember that just getting a debt consolidation loan don’t fix your problem completely. You need to
change your spending habits, make up a spending plan and stick to it.
Credit Counseling Agency
Applying to a credit counseling agency gives you a chance to get out of debt in five years or less. How
does it work? You can use a Debt Management Program with a help of a credit counseling agency and in
this case you have to make only one monthly payment to the agency. In its turn, the agency will pay to
Sounds good but keep in mind that you’ll have to close all your credit cards and it will harm your credit
score. Make sure you’re able to follow a payment schedule, otherwise you can fail on the program.
Borrowing from Retirement Plans
You can get the money to pay off your loans from your 401(K), 403(B) or pension plan. Keep in mind that
you can’t borrow funds against IRA. There’s no credit check and you’ll pay the money back to your own
However, maximum term for such loans is 60 months. There’s a high risk to get back to using credit
cards again when you’re in tough financial situation and short on cash. Also if by one or another you lose
your job, you may have to pay it back immediately or take the balance as an early withdrawal but in this
case you have to pay taxes and $10 penalty. It also happens when you can’t continue making payments.
Hopefully, one of these options will suit you and will help you to get out of debt. Consider each one
carefully, read about all the pros and cons. Remember that your success depends on your wish and
motivation to get out of debt, so try as hard as you can. Don’t forget the reasons why you’re in debt and
now looking for debt consolidation. Make a budget, learn to live within your means, avoid loans and do
your best it to never happen again! http://www.tb-credit.ru/dengi-v-dolg.html