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In this day and age debt consolidation is becoming more and more common. It seems that many people have gotten in over their heads with credit card debt, student loans or other expenses, brought on by genuine need such as a death in the family, loss of income, ect. Getting a debt consolidation loan is not always the easiest thing to do, especially if you have poor credit. Let's take a look at some of the different options for consolidating your debt or lowering your bill payments.
#1. You can refinance your home - Basically, what you're doing here is extending the length of the loan. This will lower your monthly payments and make them more manageable. However, in the long run you'll likely be paying more money for the loan. Even though your monthly payment will be lower than before, that money must still be repaid. All that's happening here is that the money is being placed on the "back end" of your loan. This makes your payments lower, but in the long run your interest will be higher because you've extended the length of time to repay the debt. It's best to only do this as a last resort. #2. You can go through a Debt Consolidation Loan Company - This is something that you really need to be careful of. There are advertisements out there that state that they'll help you to consolidate your debt, even with bad credit, but some of these loan companies may charge as much as 25% interest or more. You may be giving yourself a bit of breathing room by consolidating everything into one payment, but you may be paying an enormous amount of money in the long term by doing this. Once again, only consider this as an absolute last resort. #3. Consumer Credit Counseling - There are some companies that will call your creditor's for you and get them to reduce your monthly payment. Some of these places claim to be non-profit organizations and this may be true, however, it does not mean that they're not charging you for the service. There's no way that they could stay in business without collecting fees from either you, your creditor's or both. Non-profit does not by any means mean that it's a free service. Do your homework before using these types of services. #4. You can do exactly what the companies above do. Get on the phone and speak to your creditor's directly. Some of them will be very patient, understanding and appreciate the fact that you were mature enough to give them a call, rather than having to chase you down. Some creditor's will allow you to defer your payments for a brief time frame by making a small payment instead of the normal amount due. If your financial situation can be corrected within six months or less, you shouldn't have too much of a problem getting people to work with you. After all, these people are aware that by sending you to collections they are likely to get less than what the original amount of the debt was. They also know that if you file Chapter 7 Bankruptcy, that they'll likely get nothing at all, so listening to you and accepting a smaller amount on a temporary basis is likely in their best interest. A good piece of advice is to do your best to try to live within your means. It's not always easy to do because things sometimes seem to spring up out of thin air, but do your best to put away a regular amount out of each paycheck. Also, only get one credit card and use it for emergencies only. Don't even carry it with you, unless you're traveling. It's too much of a temptation that can easily get out of hand before you know it. Bottom line - save your money, pay cash, use credit only when you must and you'll not only prosper in the long run, but also live a stress free life. Has your personal debt become too much? Are You Aware Of Your Options? Are you trying to avoid bankruptcy, but aren't sure which way to turn? Joe Stewart is a former Insurance agent that has experience with Debt Consolidation and Bankruptcy Proceedings. Get more information by visiting TheDebtConsolidationGuys.com or by clicking on Bad Credit Debt Consolidation Loans http://thedebtconsolidationguys.com/ |
