Small anthills of debt could eventually occur to you as a massive mountain of problems if you don’t make an effort to consolidate them and have them settled as one.
But how do you consolidate your debt in a manner that’s ultimately advantageous to you?
1-Follow you Credit Reports and Know Your Scores
Every year, you have one chance to view your credit reports, for free, from any of the three primary credit reporting agencies. And you can’t miss this chance because negative remarks or mistakes could impact your debt consolidation.
Your report lists most of your debts which is a good starting point.
2-Keep Records of Your Debts
List all the balances on every card or loan you wish to consolidate, plus interest rates and monthly payments. This way, you can tell which debts are the most important to consolidate.
It helps to see a clearer picture as regards to your total assets versus your liabilities. You prepare better to set more reasonable financial goals. Include business accounts, savings account as well as home equity when listing assets.
And when listing liabilities include all debts like student loans, credit cards, mortgage and car loan balances. Also, zoom in on the interest rates for each debt and the amount owed on every account. Only that way can you get a clearer picture that can help you make smart financial decisions.
3-Compare Debt Consolidation Options
Did you know you can consolidate all your debts with a loan from any credit union or local bank, a web-based lender, or by merely transferring that balance from a sky high-rate card to a low-rate card?
For online consolidations, be sure to work with reputable lenders. Always find out about the lender’s credit requirements before a deal. Debt consolidation is more or less about debt refinancing and can be an excellent option for those extra-high interest rates.
But keeping balances low, making timely bill payments, handling your credit card accounts with care, and avoiding too many cards is so far the best way to consolidate your debt.
4-Seek a Consolidation Loan
After listing your loans and learning your consolidation loan lender requirements, you can now apply to get a consolidation loan.
You’ll qualify without much ado in most cases. If they reject you, try calling your potential lender and see if they can reconsider your request.
But your last option lies with a credit counseling agency. Most of them help clients reduce their interest rates or the amount the repay payments with the help of a Debt Management Plan (DMP).
Consolidate Your Debt; if the lender approves you, the new loan can help you pay off the debt. Still, if you don’t get a loan or bad credit merchant cash advance large enough to cover all your debt, you can always focus on clearing higher rate loans first.
Author Bio: As an account executive, Michael Hollis has funded millions by using alternative funding solutions. His experience and extensive knowledge of the industry has made him a bad credit merchant cash advance expert at First American Merchant.