Debt and Bill Consolidation - Signs You Need To Consolidate Your Debt

Written by Carrie Reeder


If your debt is becoming difficult to get on top of, here are some questions to ask yourself to help you determine if you need some help managing or consolidating your debt. If you answer yes to any of these questions, you should probably consider applying for a debt consolidation loan or seeking help from a debt management service.

1. Do you borrow from one credit card to pay another?

2. Are you unable to pay down any principal on your loan balances and can you only afford to makerepparttar minimum monthly payments?

3. Do you make your loan payments onrepparttar 142360 very last possible day that you can get away with making your payment? Are you unable to make your payments even a week ahead ofrepparttar 142361 due date?

4. Do you find yourself putting necessities like groceries and gas on a credit card without being able to pay it back byrepparttar 142362 end ofrepparttar 142363 month?

5. Are you continually seeking new loans or loan sources in order to keep up with your expenses and bills?

6. Do you have more than 5 credit card payments? Are you paying your debt payments to many different companies every month?

If your income is maxed out with debt or credit card payments every month, it can be very discouraging to work all month and only be able to keep up, or not even quite keep up with your bills and debt. Debt can be manageable and livable if you are making progress with paying down your debt balances.

When Your Bills Are Piling Up Here Are 6 Different Ways to Consolidate

Written by Mical Johnson


When it comes to debt consolidation some people dream of day when all their bills will disappear. Next to hittingrepparttar jackpot, a debt consolidation loan is some timesrepparttar 142359 only way out for a debtor. No more playing "pickrepparttar 142360 bill out ofrepparttar 142361 hat" to see who gets paid, all you have is one affordable check to write each month and pretty soonrepparttar 142362 balances quickly disappear. WAKE UP! Come back to reality, it isn't quite that easy, however if you do it right it works pretty well.

Different Ways to Consolidate

People ask me "What'srepparttar 142363 best way to consolidate debt?" and of course "What'srepparttar 142364 catch?" Well, it just really depends onrepparttar 142365 situation. There are all sorts of ways to do it and some folks get really creative too. I'll tell you about some ofrepparttar 142366 more popular ones andrepparttar 142367 pros and cons you get with them.

Just remember because it looks good doesn't mean it is. The advertisers now a days are pretty good about disguising those higher interest loans with payments that go on forever because all you see isrepparttar 142368 lower payment. So try and ignore that sweet pitch for a lower payment if it means you just dug yourself a bigger hole and put yourself deeper in debt.

First things first. Let do a little wake up call. If you are just barely trending water because you are in to much debt, just realize that not all these options will work for you. And some times, no of them will. If that's you, keep your head up high and don't drown. Many people can really cut their debt without ever consolidating.

And don't forget, if you do decide to get a debt consolidation loan, don't thinkrepparttar 142369 fairy god mother is going to make thing all better. After all, once you do a debt consolidation you will still have to make a payment until that loan is paid off.

Home Equity Loans

If you have been paying on your home for a couple of years, put a pretty big down payment when you got it and are lucky enough to be in one of those areas ofrepparttar 142370 country whererepparttar 142371 home values shot throughrepparttar 142372 roof, you may be sitting on little piece of freedom inrepparttar 142373 form of equity in your home. To get to this little nest egg you either have to sell your home or borrow money against it. And so entersrepparttar 142374 home equity loan. Another little thought...If you still owe a considerable amount on your home, IGNORErepparttar 142375 ads for home equity loans for more thanrepparttar 142376 value of your home. Not only are they very expensive but also very dangerous. And if you are still considering one of those loans Contact Me and I'll be more than happy to give you a hundred thousand reasons not to.

If you want to be a stickler about it there are actually two different types of home equity loans. The first, which is my favorite, isrepparttar 142377 home equity line of credit (HELOC), it usesrepparttar 142378 equity in you home like a credit card. You can use a little as you want or up to your limit, and once you pay it down enough you can keep on doing it. It's very useful when done correctly because most of them have some sort of interest only option which will give you greater flexibility. Hence, that's why it's my favorite. Andrepparttar 142379 other type is a fixed amount, rate and term. Your payment staysrepparttar 142380 same allrepparttar 142381 time. Just to make this simple when I talk about a home equity loan it will refer to both of these types.

Many people use home equity loans for debt consolidation. They will often get a pretty good interest rate, and since you can deduct interest payments on their taxes, makingrepparttar 142382 "real" cost even lower. But, of course there is a down side, you must use your home as collateral. Which is just a fancy term to say if you miss your payment I can take your house. And There goesrepparttar 142383 roof over your head...Literally!

Consider a Home Equity Loan for Debt Consolidation if:

You won't be leveraging your home so much that you are borrowing pretty close to, or more than,repparttar 142384 current market value of your home.

You can pay it back in 5 years or less

You are in debt because of unusual circumstances, like an unexpected accident or hospital bill, but forrepparttar 142385 most part you have excellent money management skills.

DON'T use a home equity loan for debt consolidation if:

You are going to have to borrow 100%-125% of your home's value. Interest rates are high on these types of loans not to mention you will be stuck in your house and won't be able to move for any reason for a very, very long time.

Your marriage is onrepparttar 142386 rocks. Separation and divorce may not make it possible for you to remain living there. Especially if you have a court order to move. Not to mention you would loss a great deal of money if you had to short sell it (You would still have to pay offrepparttar 142387 mortgage before you can sell it)

Now if you think that you are in debt because you just don't make enough money...well, I am surprised you made it this far. With that type of thinking as soon as you pay off your credit cards you will just find another excuse to charge them again, then your home will really be at risk.

Credit Cards

Consolidating your debt on a credit card comes off as a pretty bad idea; however it can actually be a great resource if done correctly. Credit cards sometimes offer some ofrepparttar 142388 lowest interest rates around and they are easier to acquire than most debt consolidation loans, butrepparttar 142389 best part is that they don't require collateral like your home equity line does. That is an important thing if a bad situation pops up and catches you unprepared. You can either call your current card company and find out what their interest rates will be on a balance transfer to their card, or if you are like me you get tons of offers inrepparttar 142390 mail for companies offering to consolidate your debt onto a credit card you can chooserepparttar 142391 best one. A big warning here...READ THE FINE PRINT! Make sure if you transferrepparttar 142392 balance it will help you not hurt you. I give more tips on how to handle this in my FREE newsletter so make sure you sign up.

Consider using a credit card for debt consolidation if:

You can get a lower interest rate; make sure it is a fixed rate and not just a low intro rate, that's how they get you. Please Read The Fine Print.

You never payrepparttar 142393 minimum payment, and they tease you with a really low one, and you pay as much as your budget will allow each month to get rid ofrepparttar 142394 debt quickly, after all that's what this is for.

You close outrepparttar 142395 accounts that you are paying off so that you don't go on a shopping spree. A word of caution if you close too many account it will hurt your credit score.

Don't use a Credit card for debt consolidation if:

You can only get an interest rate that is higher than what you have because you have bad, dinged, or a bruised credit history.

You are just so addicted to your credit card that you can't bearrepparttar 142396 thought of getting rid of one or more of them.

You lack consistency in paying your bills on time. All those late fees start to add up pretty quick at $25-$30 a pop, and then you pay 18%-30% interest onrepparttar 142397 late fees...what a racket! Don't get caught in this little trap.

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