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Common Ways to Consolidate Debt


With numerous global economies currently teetering on the verge of recession (or already in recession), there are a huge number of individuals and families out there who are finding themselves struggling with debts that they cannot pay.

For many, the monthly demand for bills can become a complete nightmare as the repayments start to grow larger than the amount coming in. This is not helped by a decline in the jobs on offer and the wages being paid and an increase in the cost of living.

consolidate debt

So what can people do?

Whilst there are no easy answers for clearing the debts completely, there are some steps people can take to consolidate their debts and put into place a plan for paying them down completely.

This consolidation of debts will normally involve bringing down the number of creditors who have owned money and reducing the amount that needs to be repaid. How is this possible? By following one or two of the following suggestions:

Credit Card Transfers

If someone has numerous credit cards with outstanding balances and high interest rates then the best thing they can do is look to transfer all of them together into one single new credit card, taking advantage of interest-free balance transfers on offer.

There are always offers like this out there, as credit card companies compete for your business. If you are lucky you will be able to find a company offering you 0% interest on all balances transferred onto the new card for 6 months or even a year.

This will serve to reduce your monthly outgoings significantly into one easy to manage payment and will reduce the debt you accrue as there will be no extra added interest.

Talk to Your Creditors

If you are struggling with your debts then credit companies will always prefer that you talk to them rather than missing payments and getting behind.

If it is one bank or credit institution that you owe money to over a number of different loans then all the better – if you chat with them they will be able to suggest some kind of restructuring of your debts and organize a manageable repayment schedule.

Family & Friends

If you are really struggling then don’t be too proud to talk to friends or family. Of course, you don’t want to ruin relationships and cause problems so it is best to put in place a solid loan repayment scheme as if they were a financial institution.

On the plus side though, if you borrow a lump sum from your parents or family and are able to clear the whole sum then you will be able to repay them every month without incurring massive interest charges.

Take Out an Unsecured Loan

If you don’t have your own home or are unwilling to borrow against your home then you may be able to take out one unsecured loan to cover all your debts and switch them to one, lower interest payment.

However, in order to qualify for an unsecured loan, you will need to either have a very good relationship with your bank, or very good credit history.

Take Out a Mortgage or Secured Loan

If you are lucky enough to have your own home, and better still have equity in that home, then your best option is to either remortgage or take out a secured loan against your property.

By doing this you can clear all your debts, from credit cards to overdrafts, outstanding loans to payday loans to car repayments into one monthly payment at very low interest rates over a much longer repayment period.

5 Tips for Getting The Best Debt Consolidation Help

For many people who are in debt, getting a debt consolidation can be an ideal way for them to have a break with debt relief. Along with the process of debt consolidation, you are going to have all your unsecured debts combined to become just one loan which is easy for you to manage.

Sometimes, your debt consolidation company could possibly assist you to reduce your minimum payment per month as well as rates of interest, that may enable you to take care of your hard-earned money more effectively.

Opted For Debt Consolidation Loan

In case you’ve opted for debt consolidation loan to settle your financial troubles, then it is important for you to look for a reliable debt consolidation company which could assist you in managing your debt issue for the reason that if you happen to find an unethical debt consolidation company to resolve your debt problem, you may create yourself even more debts. To learn how to find the best debt consolidation loan, you may refer to these 5 tips.

1. Search For More Information Both Online and Offline

The most effective way to be able to discover a reliable debt consolidation loan company is with the endorsement coming from someone you know who had chosen the debt consolidation company services which is of reputable and professional.

If you can’t get any recommendation from any of your friends or relatives for a reliable debt consolidation company, then you can find one from yellow pages or the easier way is just to search for them on the internet.

After you get a list of the companies, the next thing you need to do is shortlisted them and send your requests to them to ask for their debt consolidation service information package.

Bear in mind that you shouldn’t pay anything for getting the service’s details of the debt consolidation loan company. So, you should make use of these useful resources to request necessary information in order for you to compare their services. Finally, you can decide on which company you should go for.

2. Identify Signs of Scam Warning

During your search for debt consolidation loan companies, you need to place yourself in a high alert for any sign of a scammer. If you find some companies offering you service with an incredibly high fee, this can be a red flag; whilst incredibly low cost as well may come with many hidden costs.

Therefore, you have to figure out exactly how the company going to charge you if you choose their service, the thing that you need to alert yourself is to check on the hidden cost.

Never trust those company who promises too many guarantees and also those who offer debt consolidation loan package which looks too good to be true. Keep in mind that your financial troubles will not disappear overnight.

You can immediately identify a company is telling lies if they claim that they are able to get rid of your debt in a very short period of time.

3. Check If Any Complaint Is Filed Against the Company

There will be the case that a debt consolidation loan company is legit but their services can be terrible and not able to offer much help to fix your debt problem. To prevent yourself from dealing with such an incapable debt consolidation loan company, you need to take some time to check on the feedback or complaints lodged against the company.

You can contact the Better Business Bureau in your area to check is there any complaint been filed against the companies that you want to choose for the services.

4. Do not Make Any Decision By Impulse

You might want to meet with every one of the debt consolidation loan companies that you shortlisted and that you think can assist you in fixing your financial troubles. Needless to say, at the time you speak to these companies, you will find almost all of their recommendations and proposals can really impress you.

Even though you wish to fix your debt problem as soon as possible, you shouldn’t decide on picking any debt consolidation plan and services right on the spot. Rather, you should inform the companies in which you will want to have some time to think about.

Don’t rush and when you reach your home, you can then slowly make a comparison on all services offered by the debt consolidation loan companies you have personally paid a visit to and choose the debt consolidation company that you think is the most suitable for you.

5. Read All the Fine Print Before Sign up Any Contract

Once you choose to sign up into a debt consolidation loan program, you certainly are going to be asked to sign a contract or an agreement related to the suggested financial debt solution plan. Make sure you read the agreement in detail prior to deciding to sign the contract.

Never put your signature on the agreement in case you are having doubts or questions on any part in the agreement. You should check out with the company to clear your doubts first.

Summary For Debt Consolidation Help

Once you have made up your mind to choose for help from an expert for debt consolidation loan program, then it’s important for you to get a well-known company that has a debt consolidation plan that of the best terms and lower interest rate.

Subsequently, hopefully, the above mentioned 5 tips are able to shed some light for you to find the best debt consolidation loan.

Warren Paine

Warren is the senior mortgage loan officer who has worked in mortgages and loan industry since 1995. He study in Harvard and major in Finance with a Bsc. Honor Degree. He possesses a Paralegal Certificate as well.

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