Five Tips to Making Your Debt Consolidation Successful
There are many people who are in debt up to their eyeballs and have no idea how to successfully use debt consolidation. However, you do not have to be in debt for the rest of your life. There are many tips and tricks that individuals can use to get around their mountains of debt and use debt consolidation as their friend. Here are five tips that will help you to successfully eliminate the debt that you are constantly fighting with.
1) Check your credit report!
Many people think they know how much debt they owe but then may forget about an account or two. Knowing the exact amount of debt as well as the creditors it is owed to is vital. Also, if you are behind on your payments make sure to write that down as well. It is crucial to get on time with payments as soon as possible. Not only will all of these tips help you when you go to consolidate your debt but you will be able to save your credit score as well!
2) Do NOT use a HELOC as a debt consolidation tool.
Many people think that they should use their home as collateral for their debt consolidation. This is a very bad idea. Even though you may have equity in your home, you do not want to lose your home if you are unable to pay back the loan you took out for your debt. It is a terrible idea to use a HELOC. Go to a bank or other lender to try and secure some other type of secured loan if you are unable to qualify for an unsecured loan. Many banks and lenders may be willing to take a car or boat as collateral on a debt consolidation loan if you do not owe money on the items.
3) Non-profit doesn’t always mean they are going to be helpful.
Just because a debt consolidation service that you are using is a non-profit does not mean that they are going to be helpful. They might try to bilk you out of your money and run for the hills. Check with reputable credit services to see who they recommend for a debt consolidation company. You will be glad that you spent a few extra minutes doing so!
4) Borrow money against your life insurance.
This can often be a great way to pay down debt especially if you have a lot of life insurance paid off. You can borrow money against your policy and pay it back later. You should pay it back later, even if you are not required to!
5) Transfer all your credit card debt to a 0% credit card.
Many credit cards are willing to allow you to have a new credit card account for six or twelve months with 0% interest. Take advantage of that balance transfer they keep offering and pay off your debt. You may be charged a balance transfer fee but it is likely to be less than the interest you are currently paying!