The economy is at the lowest many people have seen and it has come at a time when you’re probably facing a financial crisis of your own. Not only are you in a bad state financially, but the economy is working against you, i.e. higher gas prices, mortgages and taxes. If ever there was a time to get real about debt consolidation and credit card debt, it’s now!
First, you need to know what your exact position is. Do you know your credit score? If not, then finding this is your first mission. Next, you need to find out how much debt you’re in; the amount outstanding; the interest rate you pay; and the monthly payment. If you have anything that has a lower rate of interest; perhaps you’re a recent graduate and your student loans aren’t due yet for example, these you can leave for the moment. You need to find the credit cards, store cards, loans, etc… that have high interest rates. Concentrating your debt consolidation and credit Card debt efforts on these will help you reduce your monthly outgoing payments, as well as get rid of numerous high interest payments being added on each month.
What you need to remember is that the amount you’ll be charged to pay off debts, is likely to be higher than the outstanding amount; so contact your creditors, tell them what you plan to do and ask them to send you a final payment invoice. Make sure you get this in writing so that when you pay off the debts, the creditor can’t come back to you later asking for more money.
Once you know how much you would need to make a difference to your personal economy, you need to look around for a financial organization that will give you a loan to cover this. Your credit score will affect the feasibility of this option greatly, as the worse your credit score is, the higher the interest rate you will be charged. Check out a few possibilities for raising the money for your debt consolidation and credit card debt reduction exercise.
Analyze each loan offer carefully and determine which of them gives you the best financial option. Assess whether a slightly higher interest rate over a shorter period of time is better than a lower interest rate spread out over more years.
Once you get your loan check to cover the final payments to your creditors, make sure you use it for debt consolidation. Putting yourself on a firm financial footing is a far better gift to yourself than a visit to the spa, even if you feel you need it after having realized your debt.