Debt can create enormous challenges. Whether it affects your emotional well-being, damages your relationships, or limits your opportunities, debt is often a heavy burden to bear. But there are solutions, and finding one that works for you can help you transform your life.
One of the most common ways to address overwhelming debt is consolidation. With debt consolidation, there are two main approaches. One involves enlisting the help of a debt relief advisor and the other involves taking matters into your own hands. But how do you know which one is right for you?
Taking a closer look at how to consolidate debt on your own can help you decide whether you want to go it alone or turn to a professional.
How to Consolidate Debt on Your Own
When you’re already struggling with debt, it’s natural to want to avoid paying for things you may be able to get for free. Often, people are reluctant to seek the help of a debt relief advisor for the simple reason that they do not want to pay the service fee. After all, isn’t it better to put that money toward paying off your debt?
The truth is that debt relief advisors have valuable expertise and experience that can ultimately help you make better financial decisions and save money in the long run. They can help you determine if consolidation is the right strategy and negotiate with your creditors to reduce your balances. The best advisors also provide ongoing support and education to help you create a brighter financial future.
But if you simply cannot afford professional services, consolidation may still be a good option. For the best outcome, it’s essential to fully understand how to consolidate debt on your own.
Debt consolidation loan
You don’t need a debt professional to apply for a consolidation loan. Just follow the application process and prepare all the documents yourself. The typical requirements include your proof of income and similar documents that prove that you have the ability to pay back your debt.
If you are approved for the consolidation loan, you can use that amount to pay off your multiple debts. That will leave you owing only one lender. Of course, you haven’t really paid off your debts yet. You still owe the same amount of money, you just shifted it and made it easier to manage.
Another way to consolidate debt without a debt professional is through a balance transfer. The idea is to apply for a new credit card that offers zero interest for balance transfers. This is a popular promotion by credit card companies to entice consumers to let go of their old accounts and use theirs instead. These balance transfer cards will typically require you to pay a 3% fee that is based on the amount that you will shift to the new card.
When you have transferred your credit card balance to the new card, you will usually enjoy no interest for the next 6 to 18 months, depending on the terms of the promotion. All payments made during this time will go directly to your principal balance. That will help you pay down your debts faster. However, like the loan, getting qualifying for a new card with a 0% introductory window depends heavily on your credit score. If you have average to poor credit, you may find it difficult to be approved for such a card.
Debt resolution is an important option to consider when consolidating debt on your own. This is something that you can do with or without a debt relief advisor.
To do your own debt resolution, you need to convince your creditors that you are in a financial crisis. You will default on your payments intentionally to prove that you cannot afford to pay your dues like you did before. With this option, you will need to have a significant amount of money set aside to offer your creditors – it can be a lower amount than your balance. If you do not have this, you need to save up for it. You will then use this amount to negotiate with your creditors, telling them that you will be able to immediately pay a certain amount if the rest of the debt will be forgiven. This option can often make sense for creditors since the prospect of getting some of the money is better than getting none of the money back.
While all of these options will help you restructure your debts, they can be difficult to implement, especially if you do not approach them with the right attitude or knowledge.
When It’s Time to Bring in a Professional
Even if you know how to consolidate debt on your own, seeking the guidance of a professional can have tremendous advantages. While it can be easy to get discouraged by the idea of needing assistance, reaching out for help doesn’t make anyone weak or irresponsible. In fact, it’s often the smartest way to pay off debt for good.
Here are some signs that you should hire a debt professional:
- You find it difficult to handle the pressure. Negotiating with creditors is no easy feat. When the creditors refuse to cooperate, it can be very frustrating. Many people get discouraged and give up on their plan.
- You are easily intimidated. Some people are not confident enough to face their creditors. This will make them prone to intimidation. And when it comes to intimidation, creditors can be very aggressive.
- You don’t know what to do. If you don’t fully understand how to consolidate debt on your own or how to negotiate with creditors, you should hire a professional to help keep you from making mistakes.
- You have no time to work on your debts. Some people have the confidence and knowledge to face their creditors but simply don’t have the time. This is when a debt professional becomes necessary. You can work on growing your income while a trusted advisor handles your debtsl.
National Debt Relief Is in Your Corner
Knowing how to consolidate debt on your own is one thing, knowing whether consolidation is the best option and doing it in the right way is another. That’s why partnering with a debt relief advisor can be a wise decision. They understand that there’s more to restoring financial health than getting a consolidation loan and can help you make smarter choices. But getting the most out of professional services depends on choosing the right partner.
Before you enlist the services of a debt relief company, you should make sure that they only employ certified coaches with your best interest in mind. Certifications from the International Association of Professional Debt Arbitrators (IAPDA) are a good place to start. Also, the company should be a member of reputable organizations like the American Fair Credit Council (AFCC).
National Debt Relief is a highly accredited leader that helps people like you pay off their debt once and for all. With an A+ rating from the Better Business Bureau (BBB) and rave reviews from former and current clients, NDR is a name that you can trust to be your debt relief partner. Since 2009, we’ve helped over 450,000 Americans find relief from their debt and get their lives and happiness back.