Debt can ruin your life in so many ways. For those of you who want to live a happy life, debt is definitely not a part of it. Debt relief is the secret to happiness and you may want to find the right program that will give you the debt freedom and eventually, the dream life that you have always wanted to live.
Fortunately, there are many options for you to get out of debt. There are various methods but most of them involves restructuring your debt payments so it becomes easier to commit to. Sometimes, people can afford to pay off their dues. It is just that the multiple accounts make it difficult to keep up with everything. This is when consolidating debt becomes a great option for debt relief.
There are two options to consolidate debt. One is with the help of a professional and the other is by using your own time and effort to handle the whole process.
Options for DIY debt consolidation
Some people refuse to get the help of a debt professional for the simple reason that they do not want to pay the service fee. They think that the money is better off sent towards their debt payments. While there are non-profit agencies that can help with debt consolidation, you have to understand that the dedication that for profit companies can give you is still different.
But if you really cannot afford the fees that debt relief companies will ask of you, there are options to consolidate debt by yourself.
Debt consolidation loan
You don’t need a professional to apply for a loan. Just follow the process of getting a loan and prepare all the documents yourself. The typical requirements include your proof of income and similar documents that will prove that you have the ability to pay back your debt. When you are approved of that 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 so you don’t have to spend too much effort in monitoring your debts. It helps lower the chances of you missing out on a payment.
Another way to consolidate debt without a debt professional is through balance transfer. The whole 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 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 this new card, you will enjoy no interest for the next 6 to 18 months – depending on the specific promo of the new card. Any payment made during this time will only go to your principal balance. That will help you pay down your debts faster.
The last option to consolidate debt on your own is debt settlement. This is something that you can do with or without a debt expert. To do your own debt settlement, 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. You should have a significant amount of money 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 use this amount to negotiate with your creditors. You will tell them that you can immediately pay a certain amount but only if the rest of the debt will be forgiven.
All of these options will help you restructure your debts but you have to know that it can be quite difficult especially in you do not approach it with the right attitude. Debt relief can be hard if you do not have the discipline to follow through with your plans.
Signs you need a debt professional to consolidate credit
Hiring a debt professional or working on your own debt relief each have pros and cons. It is important that you clearly define if you can implement your chosen debt solution – otherwise, you will just waste your time, money and effort.
Here are some signs that will tell you if you should hire a debt professional or not.
You cannot handle the pressure. Negotiating with creditors is no mean feat. While it does not take a rocket scientist to accomplish it, there are some people who cannot handle the pressure. When the creditor refuses to cooperate, that can be very frustrating.
You are easily intimidated. Some people are not confident enough to face their creditor. This probably stems from the fact that they know their debts are their own responsibilities and that they are at fault. This will make them prone to intimidation. And when it comes to intimidation, creditors can be very aggressive just so they can get you to pay your dues.
You do not know what to do. If you have no idea how to go about the process, you should hire a professional to help keep you from making mistakes.
You have no time to work on your debts.Some people have all the confidence to face their creditors but they just do not have the time to do so. This is when a debt professional becomes necessary. You can work on growing your income while being assured that your debt payments are being managed well.
If you want to hire a debt relief company, you have to make sure that they only employ certified professionals. Certifications from the IAPDA or International Association of Professional Debt Arbitrators is a good place to start. Also, the company itself should be a member of reputable organizations like the American Fair Credit Council or AFCC.