04 October 2017

Some Helpful Alternatives To Try Before Debt Consolidation

While debt consolidation is often perceived as the easy way out, the quick fix to the problem, or the escape route from the knee-deep debts, some people should realize that it is not the only option. In fact, this option is not suitable for everyone. Debt consolidation can help you in more ways than one by combining multiple loans into one that is easier and more manageable to pay with lower rates and monthly payments as well as a long payment term. But again, it is important to remember that there are many helpful alternatives out there that a person knee-deep in debt should try before undergoing this process. Here are some alternatives that you should try first and see if they can alleviate your financial situation.

1.Stop using Credit Cards

For those who have become so attached with the convenience of using plastic money, this may be a difficult thing to pursue. However, you would only continue to bury yourself deep in debt if you pay only the minimum required payment and you still keep on using your credit card. This is actually financial suicide because your principal debt would only grow bigger and bigger. The smart thing to do instead is to strive to make double payments and to stop using your Credit Cards. Save up, spend less, and work extra? all these things would help you accomplish this feat, which is possible by the way contrary to what you think.

2.Start being money-smart

One way to do this is to quit keeping up with the Joneses. Sure, you always want to have something to show for but you know what? None of these would matter anymore after you have become deep in debt! Would you want an extravagant life filled with luxuries you don?t really need but your debt is up to your eyeball? Or would you rather have a simple, relaxed and happy life with just the things you need but you don?t have any debts to worry about? You should also start formulating a budget plan for and recording of your daily and monthly expenses. Yes, this sounds tedious but it is the only way you would be able to allocate budget efficiently and you would know where the money is going.

3.Work extra hours or get a second job

Most of the time, in order to pay for your debts, you just have to work extra harder. Whether you are going to work overtime, work during the weekends or get a second job altogether even if it is only part time, this means that you will get a bigger (or second) paycheck that can help pay your debts. Of course, this check should go to this purpose. You should not spend it on any other thing.

4.Talk to your creditors

What some people do not know is that most creditors are actually willing to negotiate alternate arrangements that would make it easier for you to pay your bills. After all, these creditors WANT you to pay your debts! Call up your creditors, explain your situation, and negotiate a lower interest rate for your debts. They may even come up with some solutions that will help make bill payments more manageable for you.

5.Manage your payments efficiently

Paying the bills on time is a given. Aside from this, it is also necessary that you start paying off the debt that has the highest interest rate. After you have paid this off, work on to the next that has the highest interest rate. Of course, you should do this after negotiating for the lowest possible rates with the creditors.

These tips would surely alleviate your current financial situation. However, if you still feel the need to consolidate your debts, it would be best to ask for debt consolidation advice from a reputable finance company. It would also be a good idea to utilize a debt consolidation loan calculator that would help determine if this is the option for you. If it is, know your way around and study your options such as debt consolidation loans with bad credit, student debt consolidation loans, and so many more. This way, you get to make an informed decision.