When collectors are harassing you, you may be able to use debt consolidation. However, paying your debt off takes time and effort. It is a carefully calculated and slow plan that takes time to form. As you read, you will learn how to make the correct decisions in your debt consolidation.
Before going with a debt consolidation agency, make sure they are qualified. Many counselors are certified through a specific organization. Do they have the backing of reputable institutions to help prove their strength and legitimacy? This is the best way to determine whether or not you should deal with a company.
Figure out how the interest rate is calculated when you’re getting into debt consolidation. An interest rate that is fixed is the best option. This way you know the amount you will be paying for the duration of the loan. Watch out for variable interest rate plans. A lot of the time this will make it to where you have to pay them more interest than the money you owed.
Never borrow money from a company or person you know little about. Loan sharks are looking to take advantage of you. You should get an interest rate you can live with and a reputable debt consolidator.
When you’re going through the debt consolidation process, understand what got you into this mess. That will help you keep from making the same costly mistakes twice. Find out what went wrong so you do not end up here again.
You can get a loan that will help pay off many smaller debts. A lot of creditors will settle for a balance for a lump sum that’s as low as 70 percent from what’s owed. This will not affect your FICA score; it may even help it.
If you work with a debt consolidation company, make sure they look at your unique situation and help you plan. If the professionals you talk to do not take the time to ask questions about your situations and seem in a hurry to get you to sign for one of their plans, find another agency. The solution that they give you should be a personalized one.
Find out if your debt consolidation offers individualized payment programs. Everyone has a different ability to pay and companies who don’t offer customization may not be right for you. Sign up with a company that treats you like an individual. Even though it may be costly at first, you end up saving more in the end.
If you need the services of a debt consolidator, make sure you research the different companies and the services they offer. Check with the Better Business Bureau and other consumer watchdog groups to ensure that you do not entrust your finances to folks with bad reputations or who have a history of not fulfilling their obligations to clients.
Speak with the debt consolidation business you’re working with to see if there are any fees. The fees should all be explained to you up front for any services offered. They are unable to get money from you until they have done their job. Don’t do business with an agency that asks for an account set-up fee before they start assisting you.
Be sure you’re able to speak with your debt consolidation company whenever necessary. Even after your agreement is in place, you may have questions or concerns that you need answered. You want to ensure the company has great customer service available so that you’re always in the loop.
Make sure that you know where your company is located. Certain states have no licensing requirements that debt consolidation companies must have. You must avoid consolidation services from these states. This information should be easy to obtain.
Maryland and Florida debt consolidation companies need not be licensed. If you live in these places you may want to get with debt consolidation businesses that are in a different state. You won’t have much recourse if something goes awry with an unlicensed company.
Debt consolidation agreements in the context of Chapter 13 bankruptcies may help you hang onto real estate. If you’re able to get everything paid off within 5 years you may be able to keep your personal and real property. You might even get qualified to get interest eliminated from your debt within this time.
Most debt consolidation companies want you to pay off your debts in less than five years. If the debt consolidation company you are consulting with takes longer than 5 years, consider going with another company.
Many department stores may have credit cards that offer savings while having a high interest rate. If you’re shopping with a card from a store, you should get it paid off within a 30 day period so you don’t have to pay for interest. These cards should only be used for discount store prices and seasonal sales.
With the proper information and expectations, debt consolidation can be beneficial. You need to make a phone call and know what to expect. Use the information from above to help you get started in managing your debt.