Excessive debt can cause long lasting damage to your future, not to mention the stress it causes you in daily life. Learning more concerning debt consolidation can help you find the relief you seek. The solid advice presented here should start you on this debt free journey.

If you’re checking out debt consolidation, don’t think that a non profit company is going to be cheaper or better than other companies. Unscrupulous lenders often hide behind this classification, misleading you into signing up for unfavorable loan terms. Go with a group that was personally recommended to you or look at the BBB.

TIP! When choosing your debt consolidation company, look at the big picture. You want work done now, but will they company be there in the future? Some offer services and classes to help you avoid needing such a loan again.

Get a copy of your credit report before embarking on the debt consolidation journey. To fully understand how to fix your debt, you’re going to need to know where it’s coming from. Know how much debt you’ve gotten yourself into, and who the money is owed to. You cannot rebuild your finances if you aren’t aware of this.

Don’t be fooled by debt consolidators just because they claim to be nonprofit. Even though it may seem like a good deal, non profit doesn’t always mean good deal for the consumer. Be sure to check out the BBB online to find reviews and ratings of any debt consolidation company you are considering.

TIP! Bankruptcy might be an option for you. A Chapter 13 or 7 bankruptcy is going to leave a bad mark on your credit.

Just because a debt consolidation company claims to be a non profit does not mean that they are are reputable or won’t charge you excessively. Many companies will use this term to attract people to their loans that have bad interest rates and terms. Inquire with the BBB and also speak with someone who understands these companies.

When considering a debt consolidation loan, look for one with a low fixed interest rate. Anything else may keep you guessing as to what you will have to pay each month, and that is difficult to work with. Try to find a loan that will benefit you throughout the entire time that you have the loan.

TIP! If you are a homeowner, consider refinancing to pay off your debts. With mortgage rates being so low, it’s a great time to pay off your other debts.

Do you have life insurance? Many life insurance policies allow you to cash in your policy. Talk to your insurance agent for more information. Sometimes, you can use some of your payments into that policy to pay off debt.

Call each of the creditors you owe money to in order to discuss a settlement. Once you have an overall total, talk to your bank about getting one loan to cover payment on all of your debt. They may accept a lump sum which is reduced by as much as thirty percent! Not only does this not hurt your credit score, it might even boost it!

TIP! Know that getting debts consolidated isn’t going to do anything to your credit rating. Although there are some debt consolidation programs out there that will harm your credit, a loan of this type will help by reducing the rate you pay in interest and combining everything into one simple manageable payment.

Look into any credit card offers you get in the mail; it might be an excellent way of consolidating any debts you have. This can help you save interest and reduce the amount of payments you’re making. You will have to pay the card off quickly before the interest rate goes up.

Using your 401-K, you can pay off your debts. Do this only if you are confident that the money can quickly be replaced. If it is not, taxes and penalties may make this decision more costly than you thought.

TIP! Is the debt consolidation firm you are considering certified? Check with the National Foundation for Credit Counseling, or NFCC, for reputable counselors and companies. This will allow you to know that you’re secure when you’re dealing with your debt consolidation.

Take a look at how the interest rate is calculated on the debt consolidation loan. You want to choose a firm which offers fixed interest rates. This keeps your payments stable for the term of the loan. Try to steer clear of adjustable rate solutions. Often over time they can lead to paying out more in interest than you were in the first place.

Debt consolidation companies ought to customize their approach for each client. If the staff at a debt consolidation agency seems eager for you to sign an agreement, it may be wise to look for a different agency. Debt counselors need to offer customized solutions.

TIP! Negotiate with your creditors before trying debt consolidation. For instance, ask the credit card company to consider lowering your interest if you close the account.

Debt consolidation programs generally are there to help, but some may be scams. An offer that looks good on the outside may be filled with hidden fees and charges. Write down your list of questions, and always make sure that you walk away satisfied with the answers to avoid getting scammed.

Document your debts in detail. This must include your current balance owed, due dates for payments, the current interest rates attached to each loan and what your minimum monthly payments are. You need to have all your information gathered together so that you have a clear picture of everything during the debt consolidation process.

TIP! If you are offered a deal that has a ridiculously low interest rate, avoid it. Do not expect to get a loan with a low interest rate since your credit score is not good.

Debt Consolidation

If you happen to owe money to multiple creditors, try calculating your average interest. Compare the number with the proposed interest the agency offered to be sure debt consolidation is for you. If you already have a low interest rate, you may not need debt consolidation.

TIP! To get all debt consolidated, you might wish to borrow some money from family. You can pay debt back easier when you have one monthly payment.

You shouldn’t consider debt consolidation as a temporary measure for your debt. You must restructure your spending habits to get out of debt and stay debt free. After you have gotten your debt consolidation loan, take a hard look at your financial habits and make necessary adjustments for the future.

If you miss a payment, it will appear on the credit report. This may raise the interest rate that you’ll pay when you get a consolidation loan. It is vital to clear off your debts so that interest rates do not drown you.

TIP! Debt consolidation professionals can help you get a loan and balance all of your creditors’ demands. If you’re working with someone who just gives a consolidation loan, then they’re not a legitimate business, probably.

Read their privacy policy. You should find out how the company stores your sensitive information. Do they encrypt their files? The more secure the system, the less chance your identity will get stolen.

Many department stores offer credit cards with high interest rates in exchange for savings on their items. Be sure to pay off department store cards within a month of your purchase to avoid costly interest fees. These cards should only be used when you can afford to.

TIP! When trying to combine all your bills into one simple payment look for additional ways to save even more money. Perhaps you can save money on gas and car maintenance by carpooling to work with others.

Ask yourself why you are in debt. You need to think about this before signing a loan for debt consolidation. If you’re not able to fix what is causing you to have this problem, then alleviating your debt isn’t going to really help. Find the problem, and put and end to it once and for all.

Keep in mind that consolidating really just involves swapping one obligation for a different one. Debt can’t be paid off by getting more. You may end up paying on consolidation loans longer than you would have been paying on existing debts. Try calling your creditors to negotiate your debt. Then look at your other debts and try this tactic as well. You’ll pay it off the debt entirely versus paying the credit counseling company.

TIP! Recognize that there are a lot of different programs for debt consolidation. Some programs will consolidate everything into an easy to pay payment.

You’ll want to find out the physical location of the debt consolidation company. Several states do not require a license to start a debt consolidating business. That means you need to know that your firm of choice isn’t based there. This should not be difficult information to find.

Consider giving up your home phone if you still have one. In addition, it is possible to save more on your cell phone bill by reducing your allowed minutes per month. In some instances, the best cost savings option is to use your home phone more and only carry enough cellular minutes for emergencies.

TIP! A Better Business Bureau agent can tell you if any complaints have been filed against a company and how those complaints were resolved. They should have a listing there without any complaints, and if they have some they should have been solved.

When consolidating debt, aim to have one affordable monthly payment. The average loan length is five years, but a shorter or longer one may work better for you. This provides you with a workable goal and a time frame that lets you pay it off.

If you decide to use a debt consolidation company to get your debt consolidated, do your research first. Don’t provide money and personal information to a disreputable debt consolidation company. Check them out on BBB.org.


Debt can wreak havoc in your life. Debt consolidation could be the answer to all your problems. Hopefully, you’ve just learned what you need to know to begin your journey toward financial recovery.


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