What do you already know about debt consolidation? Where can you find information that is easy to
Get a copy of your credit report before you start your debt consolidation journey. You can obtain your
Equifax, TransUnion and Experian credit reports for free at the government sponsored website
www.annualcreditreport.com. The first step to taking care of your debt is knowing what you owe and
who you owe. This is the only way you can begin to fix your debt problems.
Just because a firm is non-profit doesn't mean they are completely trustworthy and will be fair in their
service charges for debt consolidation. Some companies use the nonprofit terminology to lure
unsuspecting people in while providing very little benefit. In the past the IRS revoked the non-profit
status of many of these companies. Non-profit debt consolidation companies are paid for by the banks.
Another way to look at is to ask yourself if you would want an attorney that is paid for by the opposing
party? Ask any debt consolidation company if they receive “Fair Share.” This means that they are funded
by the credit card companies and will not always have your best interest in mind. Make inquiries with
the Better Business Bureau and look for personal recommendations.
Make sure a debt consolidation service has the proper qualifications and certifications. Is the company
licensed in the state of Texas? Are they located in Texas? What is their BBB rating? Are they accredited
by the BBB? This helps to let you know whether a company is trustworthy.
With any form of debt consolidation, you should be able to save money and only must make a single
payment. You may even be able to have your debts consolidated on one credit card with an introductory
rate of 0%. The problem is you could find yourself in big trouble if the rate skyrockets after the
introductory rate ends and you haven’t paid it off.
Figure out how the interest rate will be formulated for any debt consolidation loan. An interest rate that
is fixed is the best option. You will know precisely what you are paying for the entire life cycle of the
loan. Watch for any debt consolidation program with adjustable interest rate. This can lead to you
paying more in the long run.
It is imperative to fully research a debt consolidation company before hiring a counselor to help you. A
non-reputable company could put you in much worse financial shape or leave you with bankruptcy as no
Mortgage rates have been at historical lows and refinancing your mortgage to pay off old debt has never
been a more attractive option. You may even be able to pay off your debt and lower your mortgage
payment depending on your current rate and how much you owe. Texas caps the equity you can borrow
against at 80% so this is not an option for many Texans.
If you have old debts that have gone unpaid for a long time you may be able to settle them for much less
than you owe without the need to hire a company. The collection agency may require the entire
settlement be paid in a lump sum and you must be sure to get everything in writing when attempting
any debt settlement on your own.
If you really want to stop paying high intertest debt by consolidating it, you may want to consider
borrowing from your 401K. By doing so you will not have to deal with a normal bank or lender, and you
may get a much better rate. This can be risky and expensive if not done correctly. Talk to your
investment advisor if you are considering this route.
If you are applying for a debt consolidation loan, make sure that all documents are correctly filled out
and be sure to be honest about your income and assets. Making false statements can have severe future
consequences. Any errors can result in the loan process being delayed or denied, so complete the forms
correctly and get answers to any questions you have with a representative from the bank or lender.
Ask yourself why you are in debt. You must determine this before taking out a debt consolidation loan.
Is this going to resolve your problem or is it a temporary fix? If you continue to use debt after taking a
debt consolidation loan you may find yourself in a much worse position down the road.
Be sure any debt firm has strong customer service that can help you so you're able to keep yourself
informed about the process. Larger companies may not give you personal treatment. Local companies or
companies within Texas may provide more personal service. It’s nice to know who you will be talking to
when you call.
Make sure to inquire about fees associated with any debt consolidation service. These fees should all be
within the written contract and should be clear. Find out how your payment is distributed. The debt
consolidation company should be able to give you a payment schedule when each payment is made to
each creditor or how the money is deposited into your special purpose savings account.
Texas has very strict debt consolidation, debt management and debt settlement licensing requirements.
Any company not registered with Texas Office of Consumer Credit Commissioner is breaking the law.
Even some companies located in Texas try to skirt around the law and may charge illegal fees.
Understand every debt that you owe and the interest rate on each one before you consolidate debt.
This is important to understand how much you will save with the various options that are available to
Consider your long-term financial objectives prior to reaching out to a debt consolidation program. If
you are looking to resolve some of your debts in order to get financed for a large project, you may need
to pay them on your own instead of using a debt consolidation service.
Keep in mind that any past missed payments can appear on credit reports, so it could affect the interest
you pay on consolidation loans or cause you to be denied. If you intend on taking out a debt
consolidation loan it is important that you do not miss any payments before you apply. If your credit
score is not good, then credit counseling or debt settlement may be your best options. Knowing what
your credit score is like before applying for a debt consolidation loan may save you a lot of trouble.
Use credit cards sparingly. Consider only using them for emergencies and to get seasonal discounts. It is
important to understand any discount may be quickly lost by paying high interest rates. If you cannot
pay off the credit card within 60 days, you should use it.
You will not be able to reduce what you owe by paying off one loan with another loan. If you have a
much lower interest rate with the debt consolidation loan, then you may be able to pay the balance off
quicker. You can also call your creditors and ask for a lower rate. If you have an offer from another
lender your current creditors may offer to lower your rate so that you do not transfer the debt.
You can also save a lot on your cell phone, internet provider and car insurance by shopping for better
deals. People are often surprised at how much they can save if they just spend a day researching and re-
negotiating services that they pay for on a monthly basis.
Jot down some key questions in advance of your meeting with a lender or debt consolidation company
so that you remember to ask them all your questions or concerns. Get all the answers before signing up
for any services.
You should do your homework to learn everything you can about debt consolidation services. You need
to make sure that any business you are giving money to is reputable and will do they say. Check them
out on BBB.org.
Can you afford to consolidate your debts? Even though interest rates are declining, it doesn't mean it's
the best option. You'll end up right back in your current situation if you can't meet your obligations
following your consolidation. Carefully think about your options and that will be saving enough money
Balance transfers are not the answer to your problems if you are in a financial hardship. It may be like
putting a “band-aid” on a serious injury. Remember that you will be charged a fee and the reduced
interest rate only lasts one year in most cases.
When learning something new, getting the right kind of advice is key. Your debt consolidation research
starts with learning more about the information contained in this article. Now that you've become more
informed, start using this information and get control of your debt.