4 Signs You May Qualify for Debt Consolidation

When your debts begin to get out of control you may start to consider debt consolidation and how it would affect you. Here are some signs that you may want to look deeper into debt consolidation.

You Deal With Multiple Pay Plans and Loans

You may be having a frustrating time trying to plan out when everything has to be paid and trying to make sure it’s all taken care of at the right time. If you qualify for debt consolidation, all of these payments will be combined, making it easier to get things paid on time.

Paying on Too Many Interest Rates is Difficult

Each loan or credit card that you have also has a different rate of interest. Once all of your debts have been consolidated, you will only have one interest rate which is often lower than many others that you might see. This makes it much quicker for you to pay off your debts.

You Are Able to Stop Making New Debts

When you consolidate your debts, it gives you room on your credit cards and loans. So, it’s very important that you are able to avoid the temptation to charge anything new while you are still paying off these debts. Before you start to consider whether you qualify for debt consolidation, ensure that you will be able to control yourself.

It Difficult to Get Organized

You may have so many loans and credit cards that you don’t know where to begin. Consolidating your debt combines all of your payments into one convenient package. This way you can get everything more organized and pay all of your debts off faster and easier without accruing any more late fees.

Where Do You Go to See if You Qualify For Debt Consolidation?

All debt consolidation programs basically do the same thing, but each one has a few different perks or differences. Here are the four main examples with some key differences laid out for you to consider.

Standard Consolidation of Debt Loan

The most basic type of consolidation is to simply apply for a loan through a credit union, bank or other type of lender that agrees to combine all of your credit card payments and current loans into one simple payment. On the positive side, the new loan will generally have a lower interest rate than the ones that you were previously paying.

Transfer of Balance Offers

Transferring your balances from one credit card to another is another kind of debt consolidation. You move all of your current debt from one credit card to another in order to take advantage of a special interest rate. This can assist in paying off your debts faster as long as you pay them off while your interest rate is still low as it is typically an introductory offer.

Loans For Home Equity

If you already have a mortgage in your name, you can apply for a loan that borrows against your home’s value in order to pay off your debts. This type of loan is great to use for consolidation purposes because it typically has very low interest. However, remember that if you can’t pay it back, you do risk the lender foreclosing on your house.

Consolidation For Educational Loans

You may also want to see if you qualify for debt consolidation of your student loans if those are a large portion of your debt. This can be a little bit different than a regular consolidation loan because it is usually from the government. This type of loan generally has a lower rate of interest and easier schedules for repayment. You should remember though, that it can be difficult to discharge debts from educational loans using bankruptcy and the government has the capability to garnish your pay if you default on these loans.

How Do You Find a Good Company After You Qualify For Debt Consolidation?

Once you decide that you would like to obtain a consolidation loan for your debts, you will want to narrow it down to a good, reputable company. You can Contact the banks and credit unions in your area and inquire on their current interest rates for this kind of loan. After this, compare the different information that you get and see which your best route is. Beware of any company that seems shady or that makes unrealistic promises. Also, avoid the ones that seem pushy, make you uncomfortable or try to sell you other products.

Taking the first step to finding out if you qualify for debt consolidation is often the most confusing. But, once you decide to jump in and clean up your debts, you’ll find yourself in a much more comfortable place, both financially and as far as stress reduction in your life. When everything is combined in one payment, your budget becomes a breeze.