Nothing really can explain the pain that is inflicted on a person when they have mountains of debt on top of them. You can get out of debt in the next five years if you apply debt consolidation strategies adapted to your needs. These tips below are a great starting point.
Are you on life insurance? If so, consider cashing out your life insurance policy in order to repay some of your debt. To learn how much cash you can obtain from your policy, talk to your insurance agent. Sometimes, you can borrow part of what’s invested in the policy to help pay off debt.
Are you a homeowner? If so, it may be a good idea to refinance your home and use the extra cash to pay off some of your debt. Mortgage rates currently sit at historic lows, so now is a great time to consolidate in this way. Your mortgage payment could end up lower than what you were paying originally.
Strive to identify what got you in this mess in the first place as you’re paying off your debt consolidation loan. After all, you don’t want to end up in this position five years from now. Try soul-searching to see what caused this situation to avoid it from occurring again.
Debt consolidation programs generally are there to help, but some may be scams. If something seems too good to be true, it probably is. Question the lender closely, and don’t proceed until you feel comfortable with the information you have received.
Ask a friend or family member for a loan if you can’t get a loan anywhere else. Let them know how much interest you can afford, when you can pay and how much at a time, and then do it. It is a bad idea to ruin a personal relationship if you can avoid it.
Figure out if you’re dealing with people that are certified to counsel you when getting debt consolidation. Consult the NFCC to find companies that use certified counselors. In this manner, you can be sure of getting solid advice and assistance.
Consider borrowing against your 401k plan to pay your debt off. It allows you to borrow what you need from yourself instead of having you borrow from regular banks. You should be aware of the terms before borrowing so you don’t completely spend your retirement savings.
Do you know why you’re in quite a bit of debt? You need to think about this before signing a loan for debt consolidation. After all, if you are not aware of why you have gotten in this much debt, you will just fall right back into this hole in the future. Find the problem, figure out how to fix, pay your debts and find financial freedom.
Keep in touch with your credit counselor. Even after your agreement is in place, you may have questions or concerns that you need answered. Talk to the customer service of a debt consolidation agency before choosing to use this agency for your debt consolidation plan.
Before using a debt consolidation company, be sure you ask about their fees. These fees should all be within the written contract with explanations. Be aware of how the consolidator will be splitting the payment between your different creditors. Obtain a schedule of payments from the debt consolidation company.
A truly reputable agency will provide education on managing your finances so that you avoid going into debt in the future. You can also attend classes that will help you with this matter. If the first debt consolidation counselor you meet with does not offer the resources you need, seek another agent.
Debt can cause you to lose sleep, hurt your marriage and even lower your self esteem. However, help is available from debt consolidation. Use the information above to help you move toward managing your debt.