Over the last few years, debt consolidations have become a very popular form of debt relief. For various reasons, not least of which are the single monthly payments and the significantly reduced interest, debt consolidations make it easy for those struggling to maintain a hold on their finances to regain a measure of control.
That being said, there are some definite dos and don’ts when it comes to debt consolidations. If you are considering this method as a means to fix your financial situation, here are some important things to think about before going full-steam ahead.
Do: Talk to a professional debt consultant. For some, debt consolidation is the best option – but this will depend on a number of different factors, including the amount of debt, type of debts, and your current credit status. For example, if your credit is less than stellar, you may not be able to obtain approval for a debt consolidation loan.
Don’t: Going with the first company you find is never a good idea. Do your research. There are a great many companies that claim to offer debt consolidations – but some are more reputable than others. Beware of those companies that require you to pay upfront and amass a small sum before any money goes to creditors. Also be wary of those with a less than stable history: if the company has only been in business for a year, it might be better to stay away. Read up on those companies you are considering. Make sure that they have a well-established, respected reputation, and the experience that means they can actually help relieve your debt worries.
Do: Once you have decided that a debt consolidation is the right choice for your financial situation, think carefully about repayment terms. A longer term may be attractive because it offers lower monthly payments, but just remember that you will end up paying more in interest vs. a shorter term with higher monthly payments.
Don’t: Using those cards that you have cleared with a debt consolidation is a very bad idea. For example, if you completely clear a credit card with a limit of $10,000, that doesn’t mean that you have $10,000 to spend!! Consider reducing the limits on cards you’ve cleared, and stop using these unless you absolutely have the money to pay them off as soon as you get the bill. This is a very dangerous temptation for many – so try and remove the temptation as much as possible.
A debt consolidation can be incredibly beneficial – you just need to be careful before enlisting the services of a company that offers this service.
DebtCare Canada has the knowledge and experience – and the reputation! We know how to help you get rid of those debts and get back on track financially. Call us today for a free consultation: 1-888-890-0888.