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Smart Debt Consolidation Strategies That Can Help

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Posted on: 08/22/22


With such high unemployment rates, many people have been forced to go into debt. If you are currently paying off a variety of loans, one thing you should consider is debt consolidation. By consolidating all of your debt into a single loan you may be able to save a considerable amount of money. Read on to learn how debt consolidation can help you.

Dont fall victim to companies claiming to cut your monthly payments in half with just one phone call. It is understandable that you want a quick solution to your problems, however, you can just be making your situation worse. Sit down and consider the different debt consolidation options that are available to you and decide on the pros and cons.

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 companys name may bring up some helpful information.

Make sure you hire a reputable debt consolidation agency to help you manage your debt restructuring. Although you will find many companies offering to help you, few are really in it to benefit the consumer. Check first with government sponsored agencies that offer free credit counseling and will then refer you to a trusted debt consolidation service.

To help you consolidate your debts consider borrowing against your 401k plan. Many employers allow employees to take a loan out against their retirement plans. One of the benefits to this is that you pay the money back to yourself. The interest rates are generally very low and the interest paid also goes back into your account.

Prior to making any debt consolidation decisions, look at the privacy policy of the company you are considering. Youll be giving this company a lot of your personal financial information, and what they are allowed to use it for is a really big deal. Never assume in this instance. Look to that privacy policy to know the real situation.

To consolidate your debt, try taking out a personal or signature loan. This has become a limited option due to the credit crunch, however. Many lenders that used to offer unsecured, signature loans for consolidation do not anymore. If you find one that offers this option, be sure its not a high-interest loan, even if it helps you lower monthly payments by extending the terms.

Think about bankruptcy instead. Although bankruptcy might be the answer, it can really do a lot of damage to your credit. However, if youre already not able to make payments or get any debt paid of, you may already be dealing with bad credit. Bankruptcy allows you to lower your debt and put you back on the path towards financial health.

Exercise

To pay off your debt, try borrowing money from friends or family. This is a great way to save interest. That said, there may be several problems like possibly damaged relationships, expecting returned favors in the distant future despite paying it all back, and possible legal action from a family member or former good friend. Exercise caution when using this suggestion, and make sure to pay it all back in a timely fashion.

As mentioned in the opening of this article, if you are struggling with a great deal of debt, debt consolidation may be just what you need. Although debt consolidation can often seem very confusing, it isnt as complicated as you think. By carefully applying the tips from this article you will be able to successfully consolidate your debts.

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