subject: Debt Consolidation - A Journey To Peace Of Mind [print this page] Congratulations! You've overcome a lot of mental hurdles and have decided to change your life by eliminating your debts. Where do you go from here? Where is the information you need to begin your journey to financial freedom?
Some people think that bankruptcy is the answer to their problem, but the truth is that bakruptcy has some serious repurcussions you may want to avoid.
The Consequences of Bad Credit
Once you've damaged your credit rating, it could be difficult to impossible to get a loan for a house or a car.
If you are able to manage to get your loan approved, the fees and interest payments will be prohibitively high. Your financial future may seem very dismal, but the fact is that your credit rating is salvageable.
Don't settle for permanent indebtedness; with the proper tools and patience, you can fix your credit.
Debt Consolidation and Reduction
One of the most effective tools you will find to eliminate debt is Debt Consolidation. This is not a magic potion, you cannot make debts go away without some serious effort.
The key to your being able to pay off your debt is lower interest rates. All your debts are incorporated into one low-interest payment at a rate you can afford.
Generally speaking, if you have bad credit it will be very difficult to get a personal consolidation loan. However, if you own anything of significant value, such as a home, you have collateral for a home equity loan or mortgage refinancing.
You can use the money from a loan or refinancing at a lower rate to pay off your debts and thereby improve your credit rating.
If these options are not going to work for you, you may consider the services of a debt management consultant. This service combines your debts and acts as your intermediary without the requirements of collateral, home ownership or credit checks.
When Should You Consolidate Your Debts?
You should think about consolidating your debts when you can no longer handle your debt payments.
There are online resources that make the process easier than you think. You can do all the research you need online and even submit applications with a debt management agency. It's much easier to research the process online because you have all the information right in front of you and companies are competing for your business. From the time you make that critical decision to take control of your credit, you could be debt free in as little as seven years.
