Debt Consolidation Questions
I probably can’t answer all of your debt consolidation questions, but I’ll take a stab at a few of them. I run a website for unemployed people, and I have heard all kinds of stories about debt consolidation. This does not make me an expert on this subject, but I do have a few nuggets of something resembling wisdom to pass along. How to manage a great debt burden is probably one of the most important financial decisions you will make in your life so make sure you do your research on this subject. This little article can’t possibly answer everything for you.
The first question you need to ask is: What will this company do for me?
The term “Debt Consolidation” is floating around everywhere these days and it can mean a number of different things. Some companies operate by giving you a loan to help you get out of debt, others simply combine all your payments and distribute them to your creditors. Knowing how the company works will benefit you, otherwise you may be at a loss.
A major question to ask prior to filing for bankruptcy is whether or not it is possible to work with a consolidation company to achieve a desired outcome. Bankruptcy is a serious legal proceeding and one that should not be entered in lightly. As such, it is advised to weight options.
Question: Is debt consolidation a good idea?
Answer: It might be or it might not be. If the debt consolidation service merely extends the term of your payments and doesn’t lower your total debt load, it is probably a bad idea. As mentioned above, the best will manage to get some portion of your debt forgiven. If you can’t afford to make any payment whatsoever — you do have to pay off your consolidation loan — it could be a bad idea.
Will It Affect My Credit Score?
For some reason I thought that debt consolidation would make my credit rating go worse. I know one thing though. If I had kept on missing my smaller debt payments and not consolidated there was a100% chance that I was going to suffer financially through my credit score. If you keep up with the simpler single payments that you are less likely to forget when you consolidate your debt then you are likely to get an actual improvement in your credit score. This will make the banks decision to lend you money for whatever purpose easier in the future.
What companies will accept customers with bad credit?
Most consolidation companies are meant to help people with bad credit, meaning most companies will not deny anyone with bad credit. In fact people with good credit most likely haven’t missed payments therefore may not qualify for a consolidation loan.
Credit counseling along with loans can be a viable answer to the financial worries that many Americans are facing right now. Let’s face it, it certainly doesn’t hurt to check out all of your options. Credit counseling and the lower interest loans are two of the best options for helping you find your way back to a more secure financial future.