How to Consolidate Your Debt in 6 Simple Steps |
Posted: March 9, 2015 |
Debt, especially debt that has high interest, can wear you down. If you have several cards, the interest amount alone could get you into a lot of financial trouble. Debt consolidation loans have helped a lot of debtors settle their debts and get their financial lives organized. Getting debt consolidation is simple and you can do it in the following simple steps:
Credit reports indicate the status of your credit health. There are agencies that are responsible for generating credit reports and you can access your report through them free of charge at least once each year. You can also check some sites for free. The debt consolidation company will assess your credit score to determine your eligibility. There are certain parameters in your score that could work against you if you are looking for debt consolidation. Find out where you are doing very poorly and work on those areas.
Create a list of all the loans that you owe. Include details such as interest rate for each loan, monthly installments and fees. If you have failed to make some monthly payments, write down the amount in arrears and the number of months you have failed to pay. Create your list in a table format and list everything column-wise to give you a better view of where you are with each loan
Research is the most important part of your process and you should not take any action until you are satisfied that you have learned all you can. There are many companies that offer debt consolidation loans. Some of them offer counseling and this is useful in your decision. There are also some companies that provide debt consolidation online. In addition to conducting online research and making phone calls, it pays to visit the debt consolidation providers in person so that you get first-hand information. Be sure to check lending requirements. When you are satisfied, choose one that you are comfortable with.
After your research, it’s time to apply for your loan. Some debt consolidators might reject your application; therefore apply to different companies to improve your chances. Visiting a credit counselor prior to applying for your loan will help you know where you stand. Some companies that provide debt consolidation have their own credit counselors who can analyze your situation for free. If your application is successful, you will be granted a debt consolidation loan which you can then use to clear some or all your debts.
Your loan will have low interest rate, but double check just to be sure. You will also be required to make low monthly payments in comparison to what you have been paying. As a result, the period for repaying your loan will be long, maybe even more than 5 years. Do everything in your ability to finish off the loan in a shorter time. Also avoid using your credit cards as you will only keep sinking further into debt.
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