No matter what the reason is that you are in looking for help to consolidate your debt, it is a very stressful situation. You might have lost your job, gone through an expensive divorce, become disabled due to an accident, or incurred credit beyond your financial means. To make it all worse, many believe that the only way out is to file for personal bankruptcy.
The optimal way to consolidate your debt is by using equity in your property. When comparing the repayments on a mortgage, with other, short term debt, you will easily see why.
Since mortgage is a secured loan, with your property as security, you will benefit by being able to pay it off over a longer term. And the interest the bank will charge you will be much more beneficial. But, generally you need to have a good credit history to be able to qualify for a second bond.
So, if you are not a home owner, or if you don’t have a good credit history, what can you do?
Granted, sometimes bankruptcy is the only answer, but should be avoided as far as it is possible. It will reflect on your credit record for up to ten years, and can cause additional problems at a later stage.
Others will go to a debt counselor, or choose debt administration to tackle their debt problem. This can be a dragged out procedure, and in the end rather costly. Making use of a debt counselors help means you will go through your budget with him or her. After calculating how much you can actually afford to pay back every month, this amount will be divided into installments to all your creditors.
This means you will make smaller repayments, over a longer period of time. This can sometimes drag out, as the repayments are much less. Also, the debt counselor will charge for their service throughout. This means that the full amount that you pay to the debt counselor monthly will not be used to pay off your debt. The debt counsellor will keep a portion of it for their expenses.
The positive aspect of debt counseling is that your creditors can not take legal action against you, while you are under debt counseling. The downside is that you will not have access to any credit during this period.
Unfortunately there are always individuals who will take advantage of others that are struggling. So if you decide to make use of a debt counsellor’s services, learn your rights first. Also, find out exactly how the will go about it, and what the fees involved are. A little bit of research can prevent a headache at the end.
If you are a home owner, and want to apply for a debt consolidation loan you will have to fill out a short application form. You will then receive a FREE quote from well established, nationally recognized lenders. You do not need to decide now whether the debt consolidation loan is for you.
Just apply and compare the repayments to your current situation. There is no obligation on your part. If you decide that it is not for you, you simply do not have to accept the offer. You have nothing to lose and everything to gain.
