The recent creation of debt consolidation programs has really helped consumers to manage, reduce and eliminate their debts. The following steps will help you get on track towards a healthier financial future.
Step 1 – Contact a consolidation service.
The first and foremost step into managing your debt is to contact a consolidation service. There are various ways in which a consolidation service can help you manage your debts.
One of the ways is that they can contact your creditors and negotiate a more reasonable repayment plan and also bargain for a lower interest on your balances.
They can also negotiate with the creditors to forgive a portion of your actual debt. This can either be done by lowering the principle of your current debt or by scratching off the already accrued interest.
If you would like to keep your current accounts active, then this can be the best option for you. You would be able to relieve yourself from the expensive monthly bills that do not tend to reduce your debts but rather prolong it.
Step 2 – A consolidation loan
I know for most people this does not seem like the right plan. But before you jump into into any conclusions, you should ask the debt specialist you are working with about a debt consolidation loan.
What a consolidation loan does is that it closes all your credit accounts by paying off all of your debts. You will then afterwards just have one monthly payment which will cover all your unsecured debt payments. They usually have a lower interest rate and a rather lower monthly payment than before.
You should note that, when you take a consolidation loan and continue to make the same monthly payment, you will settle your loan quicker. Even deciding to pay $10 more will help reduce the principle quickly. Most consumers are not aware of this and simply make the standard payment amount.
This also applies to credit cards and other loan payments. It is so frustrating to make payments every month and not see a substantial decrease in the principle.
Step 3 – Improving your money management skills.
Once you manage to finalize your loan for consolidation, try to work out a plan with your debt specialist to find the best ways to manage debt now and even in the future. They will always be able to counsel you on money management techniques that will help you prepare for a better financial future by saving money.
The sooner you consolidate, the better. You should get started now. Share this with friends and family to keep them on the know on how consolidation can help manage debts. They can also ask for free quotes from their services and see what programs they are able to offer.
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- Thomas Nelson
- Dave Ramsey
- Publisher: Thomas Nelson
- Erik Wecks
- Kindle Edition
- Edition no. 2 (03/08/2012)
Last update on 2020-03-19 / Affiliate links / Images from Amazon Product Advertising API
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