The debt consolidation loans appear to be the best possible way to solve a lot of financial troubles like managing multiple bills created by the whole net of loans the person gets during the life.
You can choose the most suitable option of your debt consolidation among the secured or unsecured loan or even the mortgage.
There are special cases for the person to resort to the debt consolidation loans. Consider the following situations and if you feel like you’re suffering one of them, then it’s the right time to consolidate your debts.
- You have several bills to pay and can not mend them all together;
- Your income has changed, and the amount of money you earn is no more enough to pay the debts;
- The monthly payments have drastic effect on your family budget, thus you feel like changing the monthly rate;
- You wish to have some money left in your pocket after having paid the monthly bills;
- The creditors turn your life into the chaos with mails and phone calls, so you feel in need for some protection.
There are several available ways to consolidate your debt, use the tips below to figure our< which one will be the best option for you.
- Take your time to look throughout the institutions offering the loan consolidation;
- Find the best rates possible;
- Negotiate about the offered rates, as sometimes you can get better offer after explaining your situation;
- Check the history of the company to make sure it’s not going to collapse or mistreat you;
- Get the clearly defined sum of the monthly payments before actually signing the papers;
- do not forget about the fees, as they might rise the final sum significantly.
PROS & CONS
The procedure of the debt consolidation loans surely does have its own strong and weak points. You shall consider both in order to make the fully confident choice, so here the list of specialties is offered.
There several advantages of the debt consolidation loans:
- Your debts are not consolidated by the other company, so from now on it’s time for the qualified professionals to deal with your loans and mend them together;
- As the payments are now coordinated by the company, you will not have to deal with creditors. You won’t even see them actually, while making the payments to the organization;
- The consolidation will be organized according to your current financial state, so you will have some money left for living after the monthly debt payments;
- If you miss the payment for one month, all you need to do is to inform the company, so your current consolidation plan will be revised according to new conditions;
- The plan will be revised in case of the changes in your financial state in the income level as well;
- The debt consolidation loans are much better then the bankruptcy, as you do not try to get away from your financial liabilities, but you’re ready to pay the debts.
However there are also some disadvantages of the debt consolidation loans we’re about to mention here:
- The payment term will be considerably longer compared to what you’ve had;
- If you opt for the unsecured consolidation, the tax fees will not be affected like they do in case of the secured loan;
- The debt consolidation will surely affect your credit history. It won’t be as drastic as bankruptcy; still it will be not so easy to get the future credits for you.
Choosing the best way to consolidate your debts, you way opt for either secured, or unsecured debt consolidation loans. The unsecured option is more fluent as it enables you to miss the single payment in case of emergency without any drastic consequences. However the secured debt consolidation usually comes with the tax benefits, especially if the sum is significant.
The choice of the company is really important. Usually the consolidation organizations do not try to raise overhead high rates, still some of them do. Thus check the information before making your choice.
THE FINAL PREPARATIONS
After you have considered everything stated above and have finally chosen the suitable company with nice rates and the consolidation option that suits you, take some more time to do the final checking.
- Look through your credit reports, as all of the credits will be consolidated from now on. Perhaps there are credits you’d like to pay by your own before starting the whole thing;
- Calculate the total sum to know if it will fit into the limits offered by the chosen company and will go according to the required rates;
- The choice of the bills is necessary, as it will allow you to pay your payday loans, your credit card dents or any other payments you might have. You may even combine all of them together in order to get better rates;
- Plan your family budget in order to know the exact sum you can afford without getting stressed.