If debt is hovering over you like a bird of prey, threatening to destroy your every moment of peace, it is time you fight back with an iron hand. There are plenty of debt relief services in America which can help you in getting out of your debt much faster and in an effective manner. you can also get out of debt on your own. Debt consolidation is a common way out of your debts that you can either do from a debt consolidation company or do it on your own. Read on to know about how to go about the process in details.
- Debt consolidation program – This is a method to get out of debt with the help of a professional approach. When you go to a debt consolidation company for help, they make you enroll in a debt consolidation program. As an initial part of this program, you are given a couple of free credit counseling sessions. A counselor is provided to you by the company and he evaluates your financial situation. He also sets out a budget for you by finding out how much monthly income your family has. This considerably reduces your monthly expenditure. The counselor also acts as a negotiator and negotiates with your creditors to reduce the interest rate on your outstanding debts. As a result of this, you get to make lower monthly payments and get out of your debts faster. Also you can give all your monthly payments to your negotiator at the beginning of the month and he distributes all these payments among all your creditors. thus you are able to make your multiple debt payments by just making single monthly payments.
- Debt consolidation loan – You can take out a debt consolidation loan on your own and pay back your debts. This is easier if you have a property. You can take out a home equity loan and use this loan to pay back your unsecured debts. A home equity loan is a second mortgage loan which is secured against your property. If you fail to pay back this loan, your property will be taken away to pay for the loan. Since the property acts as collateral, the interest rate on such loans are low. Thus you are able to consolidate your multiple loans into a single one with a low interest rate, thereby being able make your debt payments simpler.
- Balance transfer method – This is another way in which you can pay back your debts on your own. If you have multiple credit card debts with high rate of interest, then this is a good way of paying back your debts. You can get a balance transfer card from any credit card company for this purpose. Balance transfer cards are cards in which you can transfer all your credit card balances. These have 0% or 1or 2% interest rate. However, you need to make sure that you pay back all your debts within the time till this offer last.
Thus you can see how the above three methods can help you out with debt consolidation.