The following is a guest post
As an independent person, you’ve always taken care of your own finances. Perhaps you completed your teaching degree on your own dime, and maybe you currently pay your own living expenses. So when it comes to money, you don’t normally ask for help. However, if you feel that debt is beginning to take over your life, getting help from a debt relief company might be the answer to your financial nightmare.
The financial benefits of getting a handle on your debt are too many to count. Paying off your credit card balances will increase your credit score, which in turn helps you qualify for mortgages and auto loans. Not only can you qualify for loans, you may also qualify for better interest rates.
So, when does a debt consolidation make sense?
1. Paying bills late. If you’re constantly missing your due dates, primarily because you’re unable to keep up with your different accounts, a debt consolidation can be the thing that gets you on track.
With debt consolidation, your debts are combined into one bill. This approach “simplifies the bill paying process” and “eliminates multiple creditors,” says Accredited Debt Relief. Rather than dealing with 10 different creditors, you deal with only one – your debt relief company. You’ll submit payments to this company, and the company in turn pays your various creditors.
2. Paying a high interest rate. A high interest rate makes it difficult to pay down your balances. This is because a greater percentage of your payments go toward the interest. However, debt relief companies know how to negotiate lower rates with your creditors. You can call creditors yourself and request a better rate, but they may not comply. Sometimes, you need a professional’s help.
3. On the verge of bankruptcy. If you’re falling behind on your bills and simply overwhelmed by your debt, you may feel that bankruptcy is the only alternative. However, before you make this move, speak with a debt relief company and explore your options. Bankruptcy has a tremendous impact on your credit score – dropping your score as much as 250 points. A debt consolidation, however, may keep you out of bankruptcy. After the relief company negotiates a lower interest rate and lower payments with your creditors, you can enjoy manageable payments, which protect your credit rating.
4. Ready to get out of debt. If you’re simply tired of debt, working with a debt relief company can help. Debt consolidation doesn’t eliminate your balances. But because you’re paying a lower interest rate, and because the debt relief company places a freeze on all accounts included in the consolidation, you can realistically pay off your debt in about 5 to 7 years.
5. Stop collection calls. Some people file bankruptcy simply to stop creditor harassment. But there is another option. If you decide to work with a debt relief company, creditor phone calls may stop as soon as the relief company starts working in your behalf.
Debt doesn’t have to take over your life. Granted, if you owe several thousands of dollars and don’t have the means to pay off your balances, it can be overwhelming. Just know that options are available to you. With the help of a debt consolidation, you can conquer balances.