5 Ways To Make Sure You Do Debt Consolidation The Right Way
For many, debt consolidation is seen as a the best way out from under debt. But is it a wise move? We’ll talk about it in this article.
Debt Consolidation at a Glance
Simply put, debt consolidation is the combination of several unsecured debts (medical bills, credit cards, personal loans, etc.) into one single loan. Rather than writing multiple checks to various creditors each month, you’ll simply write one, eliminating any potential mistakes.
Why Debt Consolidation May Not Be The Right Move
A recent article in US News & World Report detailed why debt consolidation loans may not be all they’re cracked up to be. For example, the article states, debt consolidation loans can be very expensive. While you may not see the costs associated with the loan, they’re there…wrapped into your single monthly payment. About the claims of many loan providers to get you better terms for lowering your debt, the article maintains that you can negotiate the same terms yourself by contacting the individual lenders directly on your own.
Instructions for Doing Debt Consolidation The Right Way
With the average U.S. household owing about $132,000 in debt, consolidation loans are a popular financial tool. Below are a few things to do to make sure you do debt consolidation the right way.
- Figure our exactly how much you owe and borrow only that. While it may be tempting to aim for a bit more, resist that temptation. The more you borrow, the longer it will take to pay it all back.
- Use an online debt consolidator calculator to make sure you can afford your monthly payments.
- Make sure you choose loan terms that fit your budget for paying it back. Most lenders will offer loans in 36 and 84 month terms.
- Keep an eye out for the hidden fees. The difference between your calculated monthly payments and the actual amount required could differ wildly if you’re not fully aware of the associated fees.
- Be sure to make your monthly payments in full on time. This is not the monthly bill that you want to risk missing. Remember, this is a fantastic opportunity to pay down debt and rebuild potentially low credit scores.
To Find Out If Debt Consolidation is Right For You, Call The Oswalt Law Firm
Crippling debt can easily ruin so many aspects of your life. To learn more about the many options you have to get out from under debt, get in touch with us at The Oswalt Law Firm. The first meeting is always free, so call us at (602) 225-2222.