It can feel nerve-wracking to realize that your financial situation is on the brink of failure. Watching as your finances go off the rails could be so stressful that you may consider doing something dramatic. You may want to cut up your credit cards, swear to never eat out again, or scrap your Netflix subscription. While these minor tactics could help in the short term, if you are going to truly pay off debt, you need a comprehensive debt payment plan.
Compare
and Contrast Consolidation Products
There are several consolidation products out there. You need to do your due diligence and research to make sure that the product and service you are using are right for you. Using the wrong debt consolidation product could have detrimental effects on your finances and your quality of life.
Some
people have been able to reduce debt by transferring everything over to one interest-free credit card. If your credit is good enough, you may be
able to get an interest-free credit card for up to 21 months. After the initial
grace period has passed, you will be hit with a double-digit interest rate. You
can improve your chances of qualifying for one of these cards by making sure
that you include all of the money you have as your potential resources,
including your 401(k), your savings account, and your salary.
Benefiting
From The Power of Debt Consolidation
Debt consolidation can be a powerful tool. It is helpful financially and can be helpful psychologically. Even though you have the same amount of debt, only needing to pay a debt to one entity makes things feel more manageable. Of course, debt consolidation is not always the best tool for everyone. Before talking to a debt consolidation Calgary Alberta firm, it is good to have a clear grasp of the type of debt that you have. For example, consolidation works well for individuals who have high-interest debt, like credit card debt. If your credit cards have a balance of more than $6,800, every year you are paying $1,162 in interest.
Thankfully, you have options. No matter how complex or hopeless your financial situation seems, there are always options that can be provided by debt relief specialists. Debt relief specialists can negotiate with your creditors and propose restructuring your debt to an amount that you can afford as opposed to what creditors want from you.
You get
the benefit of one affordable monthly payment. The payments might be
interest-free for up to five years. Creditor legal actions, like wage garnishes
and collection activities, grind to a halt. Some organizations get paid from
government tariffs, so there is no charge to you. These are just a few of the
ways that you may benefit from debt consolidation. There are a few keys to
being successful with debt consolidation.
Make
A Realistic Budget
If
consolidation is going to work, you need to have a clear plan for attack. Your
budget should include money for debt repayment, an emergency plan, and money
for savings. You also need a safety fund that will allow you to cover
infrequent expenses. Your realistic budget should include some money just to
have fun.
Stop
Using Credit Cards
A major
rule of debt consolidation is to stop using your credit cards. There is no
point in trying to pay off your debt if you are adding up more debt on credit
cards. Stay committed to the cause. Write down why you want to be debt-free.
Write down how terrible it feels to be in debt. This will encourage you to stay
the course.
Don’t
Go At It Alone
People
feel ashamed because of their debt. When you have debt, it feels like you have
failed. As powerful as shame can feel, peer support can be equally motivating.
It can help hold you accountable. Online debt support groups and even close
family members can help you work toward reaching your debt-free goal. The debt
consolidation company you work with may offer tips and tools to help keep you
motivated and moving forward.
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