What Are the Best Ways to Consolidate My Debt?By JACKSON of Picmoney.com
'What is the best way to consolidate my debt?', is a question that gets asked all too
often in the offices of financial institutions, and the answer will vary to reflect each
individual case and financial situation.
In order to find the right cure it is imperative to have all the details of the illness; so the
first step you need to take is to list EVERY you have, no matter how small or trivial and
the status of that debt; for example, if you are a month behind or up to date but have missed a
payment in the past and so forth.
You need to arrange this list in order of seriousness: This doesn't necessarily mean the largest
to the smallest but rather debts that you have faltered on and are in danger of having
court proceedings started against you. These are deemed more serious than an up to date mortgage
payment for example, but for safety sake any loan you have, that is secured against your home,
you should really deem a higher priority than any unsecured debt.
The next step is to compile your monthly budget; income and expenditure, and don't leave anything
off this list, you want the clearest picture possible of your situation. The objective of this
is to instantly show you whether your current repayments are affordable or not.
The chances are that if you are having to compile this list you have less coming in than is going out and if
this isn't the case then it may be needed that you cut back on personal spending, whatever the
outcome, consolidating will improve your situation.
There are two routes you can take; you can either have a company manage your for you or,
you can replace all your with a singular loan.
The first option is called a settlement program and what happens is that a third intermediary body,
a management service provider, will act on your behalf to negotiate better repayment terms
with your creditors then manage the repayment of these creditors by asking you to pay them a
single set amount each month that they then distribute to your creditors accordingly.
The pros of this type of consolidation are that you do not have to go through a loan application
process and that you have the piece of mind that all your debts are being paid on time (as long
as you continue to make payment to the management service that is). The downside is that you are
relinquishing total control of your finances to a third party but more importantly the agreements
negotiated by the management company with your creditors are not necessarily going to
avoid your creditors taking legal action against you for non payment.
Your second option is the consolidation loan. This is a loan that is used to settle all of
your and can be either secured or unsecured.
The benefits of a consolidation loan are that you can reduce your monthly payments quickly and
substantially and you keep overall control of your finances and your credit score will be less
damaged than it would be with a settlement program. The negatives are; that you may end up
paying more for your in the long run and it is certainly more difficult to get a loan than
to be accepted onto a settlement program.
So, the answer to, 'what are the best ways to consolidate my debt?', are either consolidation
settlement or loan, as your personal situation will dictate as to which of these is best for you.
Should you be in the position where you are looking at consolidation, for no matter what reason
there are secret methods of elimination that the credit card companies and the banks have
known about for years that would have a detrimental effect on their profits should they be used
'en masse'. These methods, when used with a consolidation loan, could clear substantial
amounts of in as little as three years perfectly legally and ethically, and without increasing payments.
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