Is Debt Consolidation the Solution to Your Debt Troubles?

If you are struggling with debt issues, then you need to find a solution as soon as possible.

Should you try debt consolidation? Where can you ask for debt consolidation loans?

Should you try other solutions?

Let’s analyze it into details.

Before to Start

It’s quite common if you find yourself making four to seven payments each month for your debts. In this situation, it’s hard to keep it up, both physically and emotionally.

Getting a debt consolidation loan can be the right solution to clean up all your debts.

Before using this procedure, remember to answer to these questions:

1. How much do you owe? Try to make a total of everything you owe, basically all your debts.

2. How much is your credit score? If you want to get a debt consolidation, it will influence your credit score.

3. Do you really want to get rid of your debts? This is really important. It’s a question you should answer with sincerity. While some people will do everything to clean their debts, some others aren’t willing to do a lot. Ask to your partner, and review your budget. These are the first things to consider.

Debt Consolidation Loan

Getting a debt consolidation loan means receiving an unique loan to use it to pay off all your creditors and then make one monthly payment to your new lender.

This sounds cool, right?

The problem is getting a debt consolidation loan may be hard, if you really need it (which means, you are not in clean waters).

Also, it will influence your credit score and your future ability to borrow money at a decent interest.

This is why you should get a professional consulting first, who analyze your situation and will advise you on the best solution, according to your needs.

Credit Counseling

If you want to take the path of a debt management program (DMP) with a credit counseling agency, you will do one monthly payment to the counseling agency which then will use it to pay each of your creditors. With this solution, you will be soon out of debt.

While credit counseling may have pros, the cons are that you are going to close all your credit cards and your credit score will be affected too.

DIY Consolidation

With this option, your credit card creditors find out an amount you need to pay each month to pay off your balance in three years.

Normally, it’s set up an automatic withdrawal from your bank account for that amount, and your credit cards will be closed, so you can’t use them.

Bankruptcy

This is the last step you should consider, and the most drastic.

But unfortunately for some people, it’s necessary in specific cases.

So, don’t be one of them and wait to much to fix all your debts issues, because you can even lose your house!

Whether the solution you are going to choose, be sure to make a plan and talk to a professional.

Getting out of debt should be your first priority.

Featured photo source by CafeCredit under CC 2.0