Do you have several accounts with different due dates? Perhaps you haven't set up e-mail reminders or automatic payments for your credit card debt. Debt consolidation can provide debt relief, but only if you're dedicated to paying off debt and are sure you won't continue carrying balances on your cards. Before seeking debt solutions using debt consolidation, please consider the following:
- Debt consolidation options: Homeowners may qualify to borrow against their home equity for debt consolidation. If you don't own a home or have no home equity, you can request an unsecured debt consolidation loan from your financial institution or online. Taking advantage of credit card balance transfer offers can also help, but only if you are sure you can avoid incurring more credit card debt after transferring balances.
- Your credit standing: The lower your credit scores, the higher the cost of debt consolidation. If you have bad credit, it can be difficulty to qualify for a loan or new credit card. Ordering your credit scores helps with determining which debt consolidation options are available.
- How much you owe: Unsecured debt consolidation loans are generally available for lower amounts and higher costs than a secured loan such as a home equity loan. If you cannot qualify for the loan amount you need for consolidating your debt, please seek debt help from a credit counseling agency.
- Your expectations: How do you want debt consolidation to work? Reducing high finance charges can help you repay debt faster. Lowering the total of several payments to one lower payment through debt consolidation may also be possible. Consolidating debt can also provide a first step toward eliminating credit card debt.
- You're spending habits: Assessing your spending habits is important for determining how or if debt consolidation can improve your situation.
Professional credit counseling services and financial consultants can help with budgeting and managing credit.
About the Author:
Karen Lawson is a freelance writer with 20 years of experience in mortgage banking, mortgage loan servicing, and home loan loss mitigation programs. She holds BA and MA degrees in English from the University of Nevada, Reno.