subject: 3 Factors To Consider Before Opting For Debt Consolidation [print this page] 3 Factors To Consider Before Opting For Debt Consolidation
According to a general survey by the US Federal Reserve, more than 40% of the households in the United States spend more than they earn and one in every 100 households in the country files for bankruptcy. This indicates the aggravated position of debt in the US. There are basically two ways, as suggested by financial experts, to come out of this debt situation, debt settlement and debt consolidation. While debt settlement does not work in everybody's favor, more people are turning to the second alternative to free themselves from the burden of mounting loans. Debt Consolidation: Some Factors to Consider
Debt consolidation basically involves borrowing a large sum of money to pay off all existing debts. After this the story is the same - you have to pay off the loan in installments. The benefit here is that you are paying back only one lender in easier monthly installments. So, before you decide to consolidate your debts, there are some factors that must be considered: * Can you manage a single monthly payment with your financial resources?
After consolidating your multiple debts at one place, you will be left with a single monthly payment. If you think that you can manage this amount without compromising on your essential needs, such as food, shelter, gas and electricity, then you can opt for it. * Will you be able to find a lender for debt consolidation purposes?
It is hard to win the trust of a lender once you are heavily in debt. However, if your net debt amount does not exceed $10,000, finding a lender is not that difficult. Still, a lender thinks many times before agreeing to lend you the amount required to pay off your debts. A professional debt relief company can help you in this case and can also provide some guarantee for raising a loan. * How will you find the best debt consolidation plan?
Acquiring the best loan plan with low interest rates and convenient pay off schemes is a little tricky. You will have to make sure that you are not landing yourself in more trouble. So, it is advisable to seek the help of a professional who can guide you in this matter.
