Confused About Debt Consolidation? Get Some Help Here

Do you have a large amount of credit card debt? Do you wish there was a way to get your finances back
in order? The advice that follows will be valuable to learn more about debt consolidation. This
information can help to you when deciding to solve all your high interest debt and find financial freedom

You may be able to save on interest charges by using one of several methods of debt consolidation. One
option is to open a new credit card with an introductory zero interest rate and transfer your balances. If
you can qualify for this method, then it is important to pay off the debt before the interest rate changes
to a much higher one. This will require a very good credit score and enough income to qualify.

When applying for a debt consolidation loan it is important to understand how the interest rate will be
formulated. An interest rate that is fixed will help you budget your money so that you can make your
payments on time. A fixed rate will let you know exactly what will have to be paid during the loan. Be
aware of any variable interest rates because your payments could go up and it could take much longer
to pay off the debt.

If you are going to use a company to consolidate your debt, then it is imperative to fully research the
company. Doing this can help you make the best decision when it comes to your financial future so that
you will be dealing with professionals that are serious about helping you to resolve your debt.

When you enter a debt consolidation program, understand what got you into the situation in the first
place. You do not want to graduate the program debt free and then find yourself in the same situation a
few years later. Although emergencies can happen to anyone, moving forward you will want to manage
your money in a manner that considers your financial future.

Be sure to clarify the precise terms of your debt consolidation program. You should expect any company
you hire to fulfill their obligations, but it is also important that you try very hard to make your payments
as scheduled and communicate with the company asap if an emergency arises.

See if your debt consolidation agency is licensed. You need to also check with the Better Business
Bureau to find reliable company. This will allow you to be assured the company you are using is
trustworthy. You should also be sure the company is based in Texas or has offices in Texas. Out-of-state
companies may put you into a “cookie-cutter” program that does not take advantage of the laws and
protections provided by the state. Even some companies based in Texas are not aware of these laws and

protections afforded to Texas residents. Worse, some companies based in Texas are not licensed in
Texas and charge illegally high fees.

It may be better to use a debt consolidation program that offers individualized payment programs.
Credit counseling companies may offer only one or two standard plans but if you cannot afford the
terms offered you may need to look at debt negotiation. Debt negotiation plans are more flexible
compare to credit counseling plans and the monthly cost can often be much lower.

Ask the debt consolidation company about their fees. All fees should be clearly listed in the agreement.
Most credit counseling and debt negotiation services are not allowed to charge a fee until they lower
your interest rate or negotiate a reduction in your debt balance. Texas has very specific fee caps and
many companies outside of Texas do not follow the law. Even some companies within Texas charge
illegal fees.

Find out how your payments are distributed. In a credit counseling program, you should understand
how your payments will be paid on a monthly basis. In a debt negotiation program, you should
understand where your money is being saved until settlements are mad3e with your creditors. After a
debt is settled you should receive a copy any settlement provided by the creditor. Keep in mind that in a
debt negotiation program your creditors will not be paid on a monthly basis.

You will recover from debt quicker if you have a budget. Your debt consolidation company should
provide you with a basic budget that you can use to plan your finances. One you have paid off your debt
you should consider investing the money to earn interest instead of paying interest.

Avoid very high interest consolidation loans. You may be better off paying the debt without the new
loan or using a credit counseling or debt negotiation program.

Consider what you need to do now financially and in the future before working with a consolidation
company. If you have a good credit score and you can afford to pay off your debt quickly on your own,
then you probably do not want to consider credit counseling or debt negotiation. If you cannot qualify
for a consolidation loan but you can afford your current payments, then credit counseling may be a good
option. If you are struggling and want to get out of debt in 2 to 4 years, then debt negotiation may be
your best option.

You must have patience if you plan to dig yourself out of debt. There is no quick an easy fix to resolve
debt if you do not have the money to quickly pay it off.

Remember that a debt consolidation firm can help you resolve debt quicker and cheaper than you may
be able to on your own, but you will need to get though the program to start rebuilding your credit
score. Once you are out of debt you will also have an improved debt-to-income ratio which can be more
important to your financial profile than a credit score alone.

Also remember that aside from a consolidation loan, there are two non-bankruptcy debt consolidation
options when it comes to resolving debt. Debt negotiation and credit counseling. If you have a good
credit score both programs will negatively impact it. Of these two programs, debt negotiation costs
much less and takes less time.

Be sure you are aware of each outstanding debt that you owe. Debts that aren’t part of your debt
consolidation effort will need to be paid separately. If you do not have all your statements you can
review your Equifax, TransUnion and Experian credit for free at www.annualcreditreport.com.

It is important to understand that debt consolidation loans are much different compare to credit
counseling and debt negotiation. If you qualify for a debt consolidation loan with a fixed rate and are
able to pay off all of your high interest revolving debt, you will be able to maintain a good credit score if
you make your debt consolidation loan payments on-time. Be careful not to re-load your credit cards
after taking the debt consolidation loan.

There is another option if you have enough extra money every month. The snowball tactic can reduce
debt much faster compare to making the normal minimum payments. With this method you would pay
off your smallest credit card balance and then apply the payment you were making to you next smallest
credit card. The process would continue until your last credit card is paid off. This process requires
enough extra funds plus serious discipline and dedication. Any additional credit card charges may cause
this method to fail.

To apply more money into the method you chose to resolve debt, consider reducing your ongoing bills,
especially your cell phone charges. Consider a less expensive plan and ask for any current promotions
offered by your cellular company. Consider switching carriers if your existing company will not give you
a better deal. Stop any streaming services or monthly subscriptions that you are benefiting from.

No matter what form of debt consolidation you use, you will be able to merge most or all your debts
into one monthly payment. This will make sticking to a budget much easier and you should begin adding
money into a savings account. It is important to start using money that you have instead of borrowing
money when you need to make a purchase.

Always research any debt consolidation company before you accept any offer or sign any documents.
Ensure that any company that you give your hard-earned cash to is going to fulfill its promises. Always
make sure any company you use is licensed in Texas by the Texas Office of Consumer Credit
Commissioner. Many companies advertising on TV or the internet are not licensed in Texas. Any
company should have their license number posted clearly on their website.

You need a plan beyond just debt consolidation. You consider what got you into the financial situation
that you are currently in and what actions you will take to avoid it in the future.

Regardless if you chose consumer credit counseling or debt negotiation, you will likely save a lot of
money compare to just making the minimum payments. The debt consolidation company should also
provide you with a budget and make recommendations where you may be able to save money with your
other expenses. Letting a professional evaluate your financial situation can be a very good decision.

You can easily see that debt consolidation requires education. These tips are a great beginning for
helping you understand different types of debt consolidation. Take your new found knowledge and
move forward toward regaining your financial freedom.

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