Debt is a reality, and you are not alone in this. We all have debt. Credit card debt, mortgage debt, medical debt, vacations, the car we bought months ago, student loans, child support, and taxes, among others. Do? The first thing you should do if you have a lot of debt is, to be honest with yourself. Read on and find out how.
A symple lending debt consolidation company may seem like the way out for someone with more credit card debt than they can afford. Combine debts into one monthly payment at a lower interest rate.
Some debts can be covered monthly with your salary or with savings if you are careful. However, there are other times when debts cannot be paid with our income or savings, making us uncomfortable, sad, irritated and many different unwanted feelings. Did this happen to you?
So, it’s time to make a decision. I have debt… What options do I have?
Debt consolidation: this is a strategy in which you reduce your interest rate and monthly invoice payments by combining them into one payment.
File bankruptcy – Petition to Bankruptcy Court under Chapter 11 of the US Code stating that you cannot pay your debts.
While there are more options, these are the most common. And what is better for my case: debt consolidation or bankruptcy? Before we take an in-depth look at these two options, let’s gather some information about your debt.
Consider your financial situation:
It is essential to do when you are or feel you are in debt.
Think about all the expenses you’ve made, review your cards, bank statements, emails and postal letters, and how your creditors can collect what you owe.
Please list each expense, and note the amount and when you must pay it.
Also, consider the interest rate you will pay each month on each debt. Include that in the amount owed, as that money will still have to come out of your pocket at some point.
What is debt consolidation?
Debt consolidation is a strategy of paying off debts with multiple creditors or lenders with one loan or credit card. The purpose of debt consolidation is to collect all outstanding amounts together, i.e. all instalments. It also allows you to reduce interest rates, which helps lower the total amount owed.
How do you consolidate debt?
The most common way to consolidate debt is to apply for a debt consolidation loan. You can go to a bank, credit union, or online lender.
To consolidate debt, you must know that:
- There are fees associated with the loan. Ask about them before signing.
- Your credit score can be a determining factor in whether or not you get a consolidation loan. Please note that your credit score must be above 650.
- It’s possible that the interest rate isn’t much better than what you’re currently paying on your credit card.
A personal line of credit
You can apply for a personal line of credit at a credit union or other financial institution.
To do this, you must have a good credit score.
This financial method can be just as beneficial as a personal loan.
Choosing this type of credit will depend on the total amount you owe in other loans and accounts, as you will need a large enough line of personal credit to cover everything.
