There are numerous methods of dealing with debt, but the most overlooked and misunderstood is debt consolidation. There are many myths and half-truths that can often mislead those in a financial crisis. The following article has compiled some great tips to help you get started with consolidating your debt and making your financial future a happy one.
Avoid storefront debt consolidation and major banks. Finding the right lender is as easy as searching on the web. Lenders found on the Internet can offer you a more streamlined process and not bog you down in paperwork and red tape. These lenders do not have to wait on a paper process to get these loans done quickly.
If you think you have a debt consolation company that you want to work with, make sure you look them up on the Better Business Bureau. You should be able to see consumer reviews, which will help you determine if you really want to do business with them or not. Even doing a simple search online for the company’s name may bring up some helpful information.
Consider a bill consolidation service to help with your monthly debt. When you seek to consolidate debt, paying monthly bills to individual companies can create confusion and missed payments. Use a consolidation service that will pay these providers for you. You supply them with one lump sum each month and they will quickly dole it out for you automatically.
Consolidate all of your high interest credit cards onto one credit card with a reasonable interest level. If you’ve got multiple cards above 20% interest, you are paying way too much. That money going to interest could be helping you pay off that debt! Plus multiple cards means multiple minimum payments. It’s best to attack one card alone if you can.
Never scoff at negotiating your debt. While you may wish for all the debt to go away, it will not. Bankruptcy is your only option for a clean wipe, and most people do not want to go that route. If you can reduce your debt by any amount of money through negotiation, do so. Dropping some of the debt is better than nothing.
Before choosing a debt consolidation company, ask how the counselors of the company are paid. If the answer is “on a commission basis”, then you may be best to look elsewhere. Someone working for commission will say or do many things that are less of a help for you and more of a help to their overall income.
Focus on consolidation services that look at long term goals. Consolidators that offer a quick fix for your debt and credit woes may not get you the best results. Those that focus on creditors one at a time, improving your credit score with each successful negotiation, will wind up saving you money in the long run.
Think about bankruptcy if consolidation doesn’t cut it for you. It can be Chapter 7 or even 13, but it will ruin your credit. Your credit is probably already terrible, if you can’t pay your bills and are missing payments. You can reduce your debts when you file for bankruptcy.
Look into exactly how the interest rate is determined. An interest rate that is fixed is the best option. You will know precisely what the cost of the loan will be. Variable rates are nothing but trouble. Over time, you could end up paying more for interest than you would have if you’d kept your original debt.
Do not get involved with a debt counselor that works for a company that pays by commission. This is a red flag as it’s going to alter your situation according to the best interests of the debt counselor and not your best interests. Instead, look for a reputable company that pays their counselors accordingly.
There is no harm in comparison shopping for consolidation loans. The fact is that some financial institutions, or friends and family, may offer you a better rate than others. Whether it is a line of credit, mortgage, credit card or loan, compare the interest rate and terms and figure out which is the best bet.
Check out several different debt consolidation companies before you pick one to make sure you choose an agency with a good reputation. Be sure you check online with the BBB to ensure you have not chosen a bad company that doesn’t treat its clients properly.
You need to be able to stay in consistent contact with your debt consolidation company. There may be questions you have from time to time. Talk to the customer service of a debt consolidation agency before choosing to use this agency for your debt consolidation plan.
Find out the physical address of your debt consolidator. Certain states have no licensing requirements that debt consolidation companies must have. You have to be positive that the company you go with isn’t located in a state like this. This should not be difficult information to find.
If you borrow money to consolidate your debt, make sure you get a fixed interest rate. An interest rate that is not fixed can keep growing and eventually cost you more than what you originally owed to your creditors. Ask your debt consolidation counselor about the interest rate and make sure it is fixed.
If you are thinking of debt consolidation, one of the big benefits is a huge reduction in the collection calls that you receive. Many people suffer from extreme anxiety and stress from the constant calls from debt collection agencies. This stress can have a negative impact on their entire lives. Once you consolidate your debt, all of these calls stop.
Debt consolidation can work for you if you know how to take advantage of the process to suit your needs. There are many pros and cons, as well as companies out there like Zenith Financial Network, ZFN and Associates whom also operates under many other names including; ZFN debt collection, ZFN Debt Collections, ZFN Processing Debt Collection, and ZFN processing Florida preying on the less fortunate. However, just by reading this article, you are on your way to living a life with less debt.