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Debt consolidation needs dedication and immediate action. Procrastination only leads
to deeper debt and puts you on the path to bankruptcy court. What you need is a fool
proof plan to consolidate and pay off the accrued debts. The perfect solution will not
walk to you. You need to make up your mind to straighten your life and get out of debt
by planning your finances and avoiding overspending.
The ideal method is to seek debt consolidation advice which will point you towards
a debt consolidation scheme with the lowest interest rate possible and the debt
consolidation will not adversely affect your credit report or score. Aim to use
a plan that will get you out of debt in 3-5 years.
Remember there are many ways in which you can consolidate your debt:
1. Use your credit cards: If you have a good credit rating you should
approach your credit card company to help you consolidate your debts. Many
card companies appreciate clients who are upfront and honest about their needs.
According to debt consolidation advisors often accredit card debt consolidation
may work out cheaper in the long run. Ask one card to take over all pending
payments at a consolidated rate of interest. Many credit card companies may even
waive transfer fees. Choose a plan that optimizes monthly installments and gets
you free of debt in 3-5 years.
2. Consider a home equity loan: Many finance companies offer home equity
loans as a debt consolidation option. In this you can get competitive rates,
low payments, and the advantage of payments being tax deductible. Choose your
loan carefully and opt for early closing options.
3. Cash-out-refinance is a workable option: In this finance companies allow
clients to refinance their home equity and allow withdraw of funds to pay off bad
debts. This scheme offers lower rates of interest but you need to study carefully
the pros and cons.
4. Find out about debt consolidation loans: This is a personal loan that does
not endanger your home or property that is held as security in the case of home
equity loans. In this interest rates are often high and the payment term long,
between 10-15 years. Find out if this option will suit your debt consolidation
plan . Check out websites that have loan comparison tools like
http://www.whatprice.co.uk/money-extra/personalloans-search.html and determine
if you have the “best” and most feasible option.
5. Contact non-profit organizations like credit unions and local agencies.
Very often these offers lower interest rates as well as free credit counseling
services. Of course you or a family member needs to be a member of such an
organization to avail of their debt consolidation schemes.
6. Use your pension or retirement plan to pay off debts: This is a viable
debt consolidation option if you are young and have time to rebuild your nest
egg. You apply to borrow against your retirement fund. Remember never withdraw
however tempting it may seem. Weigh carefully the cost of your debts and the
high rate of interest against systematic repayment into the retirement fund at
a more workable rate of interest.
Since debt has become common all over the world and in the US experts are
developing several ways to rid people of debt. Debt settlement, credit counseling
agencies, and non-profit agencies are being set up to counsel people in debt and
the World Wide Web has become a valuable source of information, advice, as well
as tools that offer instant comparison of schemes as well as interest rates like:
www.credit.com.
About Author
Barry Allen is a freelance writer for
Consolidate Debt , the premier
website for free Debt Consolidation Services for loans, debt management plans, debt
counselors, advice, loan payments and many more.
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