You are ready to consolidate your debt, but where do you start? Here are quick, easy tips to follow to get your consolidation started, so you can get on the road to being debt free quickly.
First, consult with a reputable debt consolidation company. You should not pay the company up front to help you with renegotiating your credit card rates with other creditors. In fact, most reputable firms will consult with you initially without charging you.
They will help you get on a manageable debt repayment plan. Usually, you will need to come up with a lump sum each month to pay to the firm. They will then pay your creditors on your behalf until your plan is complete and you are debt free.
You might even skip the debt consolidation firm. If you are not too far behind in your monthly payments, call each of your creditors individually, and request that they lower your interest rate. If this does not help, or you are several months behind on your bills, ask if they can devise a repayment plan.
You will likely need to make a larger payment once a month than your regular minimum payment, but this is something you might only need to do for three payments until you are under your limit or the card is paid off. In many instances, your creditors are happy to help you because you are taking a proactive step towards repaying your debt and not being irresponsible. As such, you may even find your creditor does not report you to credit agencies as delinquent if you maintain your pay plan with them.
Whichever option works for you, while you are undergoing a repayment plan, always begin establishing a realistic budget. You do not want to get yourself back into the debt mess you are now getting yourself out of, so you need to live on cash. Do not feel this equals a restriction. If anything, a realistic budget allows you to treat yourself to a meal out once in a while, or buy yourself a new piece of clothing, as long as you are honoring your financial obligations and staying within your monthly spending budget.
You want to pay attention to your behavior with money. If you spend because you are sad or stressed, you need to practice new skills for dealing with these uncomfortable emotions. Remember the pain of being overwhelmed with debts. It alone can help you think before you charge.
Before you know it, you are going to be debt free. Be patient, be consistent and follow these tips get on the road to a sense of accomplishment and financial freedom.