Debt can be overwhelming and make life miserable. To achieve relief through debt consolidation, research is key. Continue reading to learn more about whether debt consolidation is right for your financial needs.

TIP! Never go with a debt consolidation company just because they claim non-profit status. Just because an organization is a nonprofit, it doesn’t make them competent.

Before getting into debt consolidation, look at your credit report. The beginning step in fixing your debt is knowing where it comes from. Know how much you’re in debt and where that money needs to go. You aren’t going to be sure how you should restructure your finances without that information.

Just contacting your creditors often opens doors to lowering your monthly payments. They want you to pay them back, so they will work with you. Just give them a call and ask if you can have your interest rate fixed and the card cancelled.

Credit Card

You should look into consolidating your debts the next time you receive a low-interest credit card offer in the mail. Along with pocketing saved interest, you will find it more convenient to make just one monthly payment. The single payment would be made to the credit card company, as opposed to making several to individual creditors. When you’ve consolidated your debt on a single credit card, try paying that off prior to the introductory interest offer expiring.

TIP! Tell your creditors if you decide to work with a debt consolidation company or credit counselor. They might want to talk about other arrangements with you directly.

Don’t borrow from just any lender. There are many different types of unscrupulous loan providers. Before borrowing money for debt consolidation, find a lender that charges a fair interest rate. You should also seek the help of reputable lenders only.

Debt consolidation offers financial assistance, but you must avoid scams. When something seems too good to be true, it probably is. Ask the lender a bunch of questions and be sure they’re answered prior to getting any kind of a contract signed.

TIP! Bankruptcy may be a better choice for you than debt consolidation. A bad mark will be left on your credit report whether you file a Chapter 7 or Chapter 13 bankruptcy.

It might be possible to withdraw money from a retirement fund or 401k to pay down high interest debt. This shouldn’t be done unless you’re sure that this money can be paid back into your account. If it is not, taxes and penalties may make this decision more costly than you thought.

Which debts would be best consolidated, and which can be paid off normally? It doesn’t usually make too much sense to get a loan consolidated if you have a 0 percent rate of interest. Why would you want to combine it with a loan that’s of a higher interest, for example. Review each of your current loans with the lender to assure you are making good choices.

TIP! You want a low, fixed rate for your consolidation loan. Otherwise, you will constantly be worried about expensive adjustments.

If you’re not able to get money from places, you should see if a loved one is willing to help. Be determined to repay it, though, and have all the terms in writing. Borrowing money from friends can often cause problems.

Make sure the debt consolidation agency is certified. You’ll find companies that you can trust through the NFCC – the National Foundation for Credit Counselors. This will allow you to rest easy that the company you are using is trustworthy.

Spending Habits

Avoid looking at a debt consolidation loan as a short-term fix for your money problems. Debt will always pose a problem if your spending habits aren’t curbed. Once you have found the right loan, take a hard look at your spending habits and make the necessary changes for a healthy financial future.

TIP! Debt consolidation programs generally are there to help, but some may be scams. If someone offers a deal too good to be true, do not trust them.

If you are claiming Chapter 13 bankruptcy, using debt consolidation can help you maintain possession of your personal property. Paying off everything in three to five years can still let you keep all of your personal and real property. You might even get qualified to get interest eliminated from your debt within this time.

Don’t let a lender pull your creditor report until you’ve come to an agreement. They don’t need to have a not on it saying that they accessed the report if you do not use their services. Let the debt consolidation company know how serious you are.

TIP! You can often borrow money from retirement funds to pay your credit card debt off. Only do this if you can afford to pay it back within five years.

Prior to getting a loan taken out you should see if you’re able to take on some of the debt on your own already. This will allow you to reduce the overall expense that you must pay.

Debt Consolidation

TIP! Look for a reliable credit counselor in your local area. Such an office can assist you in debt management and consolidation.

The payments made to a debt consolidation agency doesn’t improve your credit rating. However, the payments to your creditors do improve your credit. This can help you escape debt faster, but you’ll have a footnote in your report about using a debt consolidation service.

There are two options available for consolidating your burdening debt. Debt settlement and debt consolidation are not the same thing. Consolidating debt means that the balance won’t be reduced, but your credit won’t take a negative blow, either. Debt settlement will lower the amount owed, but it must be paid immediately and your credit report will reflect it.

TIP! Try using cash for your different purchases once you implement debt consolidation strategies. Don’t go back to relying on credit cards again.

Say no when necessary. You can easily stray from your budget by going out with your friends one night. Rather, keep your closest friends in the loop with what you are trying to do. Your true friends will alter their social time together to fit your plans.

When considering companies to use, look to see if there are complaints filed with the BBB. This will help you figure out which companies to avoid.

TIP! Don’t look at debt consolidation as a cure for all your financial problems. Debt will always be a problem if you are not willing to change how you budget and spend your money.

When you’re struggling with your debt, you’re under a lot of stress and strain. However, if you take the time to learn about ways to remedy the situation then you can look forward to a happier tomorrow. Keep this advice in mind to get rid of debt and avoid it in the future.