Raise your hand if you would like to get out of debt! Did you raise it? I hope so, because being debt free is a wonderful feeling. Of course there are some things you need to do to make that happen, but it can be done. There are actually several options available to you, and the more you put to good use, the better. One method a lot of people turn to is consolidation, but you need to be careful when you choose it as one of your options. With that in mind, here are some debt consolidation tips that will help you.
1. Write it all down. Before you even think about consolidation you need to list all of your debts, their balances and the interest rate you pay on each of them. You will need to know all of this information as you move forward, so be accurate and thorough.
2. Know how much you can afford. If you're looking into debt consolidation, then chances are that you are struggling with making all of your payments on time. Maybe you're doing okay for now, but you still feel like you're treading water, if not drowning. Create a budget for all of your income and expenses, and see how much money you will be able to pay.
3. Shop around. At this point you can start shopping around for the best deals on consolidation loans. Be sure to read all of the fine print. Generally speaking, you should go with the offer that has the lowest permanent interest rate. But, you also need to watch out for balance transfer fees and other catches that could end up costing you more money.
4. Compare your debt to the offer. Once you find an offer you need to compare all of your debts to that offer. Go back to your list and see which debts should be part of the consolidation loan. For example, if you can get a rate of 10% for your consolidation, then you would want to move any debts that are charging you a higher rate. Also, you may have more debt than the loan will cover. In that case, move as much of your debt as you can.
5. Understand the risks. Can you save money through debt consolidation? Yes, and a lot of it! However, you need to make sure you are disciplined enough to not create more debt when you have more credit to play around with. Too many people consolidate their debt, then immediately start charging things again. Don't make that mistake!
By following these debt consolidation tips you will avoid the pitfalls that so many people seem to fall into. Consolidating what you owe can have a positive impact on your bottom line, so go ahead and use it, but use it wisely.
1. Write it all down. Before you even think about consolidation you need to list all of your debts, their balances and the interest rate you pay on each of them. You will need to know all of this information as you move forward, so be accurate and thorough.
2. Know how much you can afford. If you're looking into debt consolidation, then chances are that you are struggling with making all of your payments on time. Maybe you're doing okay for now, but you still feel like you're treading water, if not drowning. Create a budget for all of your income and expenses, and see how much money you will be able to pay.
3. Shop around. At this point you can start shopping around for the best deals on consolidation loans. Be sure to read all of the fine print. Generally speaking, you should go with the offer that has the lowest permanent interest rate. But, you also need to watch out for balance transfer fees and other catches that could end up costing you more money.
4. Compare your debt to the offer. Once you find an offer you need to compare all of your debts to that offer. Go back to your list and see which debts should be part of the consolidation loan. For example, if you can get a rate of 10% for your consolidation, then you would want to move any debts that are charging you a higher rate. Also, you may have more debt than the loan will cover. In that case, move as much of your debt as you can.
5. Understand the risks. Can you save money through debt consolidation? Yes, and a lot of it! However, you need to make sure you are disciplined enough to not create more debt when you have more credit to play around with. Too many people consolidate their debt, then immediately start charging things again. Don't make that mistake!
By following these debt consolidation tips you will avoid the pitfalls that so many people seem to fall into. Consolidating what you owe can have a positive impact on your bottom line, so go ahead and use it, but use it wisely.
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