Terry’s Blog: Debt Consolidation: The Important Things You Should Know

Debt Consolidation: The Important Things You Should Know

Terry is a gay friendly realtor in Sioux Falls SD.  You may reach him at 605-351-1008 or terry@terrybornitz.com

Terry is a gay friendly realtor in Sioux Falls SD. You may reach him at 605-351-1008 or terry@terrybornitz.com


What is your opinion on debt consolidation? Learning more on this topic will help you make the right decision and perhaps get out of debt quickly. It is a very helpful option at times, but you must become well versed on the pros and cons. Not all of these companies and their offers are created equal. Continue on to learn about different programs so you can make an informed decision.

Don’t fall victim to companies claiming to cut your monthly payments in half with just one phone call. It is understandable that you want a quick solution to your problems, however, you can just be making your situation worse. Sit down and consider the different debt consolidation options that are available to you and decide on the pros and cons.

Following debt consolidation, budgeting your money wisely will help you keep future debt to a minimum. Most people get in over their heads by over spending with credit cards, so learn to work with money you have rather than borrowing. Doing this will also make it easier to pay off your debt consolidation loans and improve your credit score.

Before restructuring your financial situation with a debt consolidation loan, get a copy of your credit report. Analyze your habits and see where you stand with the major credit bureaus. Doing this will help you figure out what you have been doing wrong and what habits you need to change going forward.

Your credit report should be scoured before considering consolidation. You should know where your debt came from. You need to know your debtor and the amount you owe. You won’t be able to get anything fixed if you’re not sure of these things.

Call your creditors and ask if you can negotiate lower interest. You would be surprised to know that a creditor will more often than not accept around 70 percent if you offer a lump sum. A lump sum settlement can increase your credit while lowering your overall debt.

If you have student loans that are from federal programs, consider consolidating them only after your grace period on those loans has ended. If you consolidation sooner, you can lose your grace period, making it necessary for you to start repayment immediately. Timing is everything with federal loans, so make sure you understand the terms of your original agreement before signing on for consolidation.

ecured by your home, you will lose it if you are unable to pay off your debt. Keep this in mind as you choose your path to financial freedom.
Debt Consolidation: The Important Things You Should Know

What is your opinion on debt consolidation? Learning more on this topic will help you make the right decision and perhaps get out of debt quickly. It is a very helpful option at times, but you must become well versed on the pros and cons. Not all of these companies and their offers are created equal. Continue on to learn about different programs so you can make an informed decision.

Don’t fall victim to companies claiming to cut your monthly payments in half with just one phone call. It is understandable that you want a quick solution to your problems, however, you can just be making your situation worse. Sit down and consider the different debt consolidation options that are available to you and decide on the pros and cons.

Following debt consolidation, budgeting your money wisely will help you keep future debt to a minimum. Most people get in over their heads by over spending with credit cards, so learn to work with money you have rather than borrowing. Doing this will also make it easier to pay off your debt consolidation loans and improve your credit score.

Before restructuring your financial situation with a debt consolidation loan, get a copy of your credit report. Analyze your habits and see where you stand with the major credit bureaus. Doing this will help you figure out what you have been doing wrong and what habits you need to change going forward.

Your credit report should be scoured before considering consolidation. You should know where your debt came from. You need to know your debtor and the amount you owe. You won’t be able to get anything fixed if you’re not sure of these things.

Call your creditors and ask if you can negotiate lower interest. You would be surprised to know that a creditor will more often than not accept around 70 percent if you offer a lump sum. A lump sum settlement can increase your credit while lowering your overall debt.

If you have student loans that are from federal programs, consider consolidating them only after your grace period on those loans has ended. If you consolidation sooner, you can lose your grace period, making it necessary for you to start repayment immediately. Timing is everything with federal loans, so make sure you understand the terms of your original agreement before signing on for consolidation.

Remember that filing for bankruptcy normally still allows you to keep your home. If you take on a line of credit which is secured by your home, you will lose it if you are unable to pay off your debt. Keep this in mind as you choose your path to financial freedom.

Ask how the debt consolidation agency you are interested in gets its funding. Reliable professionals will explain how they get their funding through contributions from different creditors. If your debt consolidation counselor does not want to give you any details about funding, you should try finding a more reliable professional.

When working on a debt management plan during debt consolidation, you need to make sure that you bring all of your accounts current. Aging debt needs to be wrapped up into any current debt. If you have any old student loans or debt that is over 4 years old without a payment, get it all consolidated into the new plan.

Do high interest rates have you in a panic? If your interest rates are quite high, you will likely pay a tremendous amount in interest by the time your original debt is paid off. Debt consolidation can be one means to lowering your interest rate, so see if this might be a good option for you.

Before beginning any debt consolidation program, sit down and write out a budget. This will ensure that you can afford the debt consolidation payment that the company offers. Additionally, most debt consolidation companies require you to complete a budget before beginning a debt consolidation program. By having this completed, you can start the program sooner.

Use your common sense when getting involved with a debt consolidation company. You may not think you know as much as these companies do, but you can certainly tell when something is wrong and when you are being taken advantage of. Be very careful to think wisely and to keep your wits about you.

Speak to an accountant before you get involved in a debt consolidation loan from a loved one. There are perks and problems associated with such a loan when it comes to income tax. The interest may be taxed, or they may receive tax deductions. Speaking to a pro will give you the scoop.

Hopefully, you’re ready now to do what you need to do. You should now know what goes into getting a debt consolidated so that you’re able to handle your finances better. Do all that you can to ensure that you have control of the debt, rather than the other way around! Get the help you need and move forward with your life.fbcoverTerryBornitz

3 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *