Constructive Ways To Consolidate Your Debt Part II
Feeling like a slave to debt? Debt consolidation can help.
In yesterday’s article “Debt Consolidation | What Are Your Options?” We identified some criteria that would help you determine whether or not debt consolidation was something that you should pursue, or if payday loans could help you out.
We also listed a few possible solutions you could begin pursuing if you felt you were indeed a candidate. These were credit card transfers, home equity loans and borrowing money or small interest loan from a noted family member or friend, or payday loans through a reputable lender.
If you didn’t feel that these were options worth pursuing, perhaps today’s article will present a few more solutions for debt consolidation that will appeal to you a little more.
Borrowing Against Your Life Insurance
If you happen to have whole life or permanent life insurance and have been paying into it for some time, you may be able to borrow against it. Obviously you signed up for your life insurance to help secure the financial future of a loved one in case of an accidental or premature death, so consider the consequences carefully. The nice thing here with whole life insurance is that you don’t have to pay back the whole amount borrowed if you aren’t able. It simply comes out of what would be given to the beneficiary upon your passing.
Your Local Credit Union
Credit Unions offer loans at interest rates that are typically lower than that of most standard banks. If your credit is still decent and you have identified your need for help before defaulting on your accounts, you may be able to apply for and get approved for a loan to pay off your creditors. Since most consumer credit card accounts carry interest rates around 20% , you may be able to lower your monthly payment and pay your debt off quicker with a loan from a credit union which will typically carry interest rates of around 10%.
Consumer Credit Counseling Agency
For many burdened by debt, this may be your best option. Nonprofit consumer credit card agencies provide counselors who work with and understand your situation as well as your need to get out of it. These counselors also have experience in dealing with and negotiating with creditors. With the stress and burden that you are already likely feeling, this a solution that will take care of the stressful leg work for you.
Typically, these agencies will take into account, organize and restructure all your outstanding debts as well as the payments you are making on those debts. They will likely get any accrued late fees you have accumulated waived and get your interest rates lowered as well.
Negotiate with your credit lenders on the premise of default
Be upfront with your creditors. If you feel you are about to go into default on your home mortgage, credit card or other consumer credit accounts, talking with your lenders may be all it takes to get you back on track.
Your creditors do not wish to see you go into default. If you express that you are on the verge of defaulting on your accounts or even worse, going bankrupt, your creditors are very likely to throw some more favorable terms your way.
Creditors are very much aware of the consequence of you going into default or bankruptcy. If this happens they will lose everything that you have left to pay them. If they can keep you paying your debt by extending you more favorable terms, they will, and payday loans may be worth looking into if you only miss a payment here or there.
No matter what your means of consolidation are, finding one quickly is essential to gain control of your debts before they begin controlling you.
On behalf of Personal Money Store, we wish you financial health and prosperity.
Debt consolidation is a viable option for many. Keep in mind that some consolidation companies have what some consider strict rules you will have to follow.
Many consolidation companies require you to cancel all credit accounts and agree not to add any additional debt to your financial situation. In many cases this helps but it is a real inconvenience when it comes to getting some cash to cover unexpected expenses.
Usually payday loans and cash advances do not affect your credit rating or score. These types of loans are not something to rely on for your financial health but in an emergency they can really get you out of a jam.
Though many debt consolidation companies have strict rules, I believe they are a great alternative for those under financial pressure. As for me I have quite a few and it can get frustrating to keep track of. So it’s a benefit to know that not only are they good at lowering your interest rates or accrued late fee’s, but that they organize and restructure all your debts as well!