Monday, March 20, 2017

Want Answers For Your Debt Consolidation Problems? We Have Them

How much do you know about debt consolidation? If you do not know a great deal about this subject, now is the perfect time to start learning. Debt consolidation is a great way to start to dig yourself out from under a mountain of debt. The following article will provide some useful information on this topic.

Do your research on your potential debt consolidation companies. Not every one of these companies
is best for your scenario. Some are not even reputable--there are a lot of "fly by night" operations in this market. Don't fall into the trap. Research the companies fully before making any decisions.

Understand the difference between debt consolidation and a home equity loan. Many companies will guise a home equity loan (where you put your home on the line for the debt) as true debt consolidation. That's not always the wisest move to make, especially if you have a family involved. Know the differences and the risks before making that decision.

When consolidating debt, consider doing the footwork yourself. Consolidation companies may have fees associated with their services. However, you can easily make the same phone calls to your creditors and negotiate with them. There is no special consideration from the creditor about who calls, whether a service or you, the customer.

Try keeping and applying for those introductory 0% interest credit card offers in the mail. Consider the amount of interest that you may save via consolidating all that debt onto your new card. You must use caution, though. Keep to a plan that lets you pay off the transferred debt during your low interest period. Don't miss payments or you will make your interest rates go up drastically. Don't open multiple cards and keep one of your old ones with a small balance on it.

You might be able to remove some money from your retirement fund to help you get your high-interest credit cards paid off. Do not consider this unless you know for sure you can pay back the amount withdrawn. Otherwise, the money is considered an early distribution of retirement funds, and you are on the hook for penalties and taxes.

Pay off your smallest loans first. Then concentrate on large amounts. Using this technique allows you to quickly get some small bills paid off. Then, you can use the money that you had been paying towards those small bills to help pay off larger loans. This technique works well when you are saddled by a lot of small credit card balances.

When you consolidate your debt, be prepared to use cash to pay for things. If you don't start using cash, you could find yourself in trouble again with even more credit problems. These things may be what caused your large debt. When you use cash, you can only spend what you have.

If, like most people, you struggle with having too much debt, now is the perfect time to start taking action. An effective debt consolidation program can be a good part of your strategy for improving your financial health. Keep the information in this article in mind as you begin to reduce your debt.

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