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Credit Tight - Debt Consolidation An Optioon To Consider

Jan 30, 2008
Is paying the bills a difficult task most of the time? Do you continually battle with a growing mountain of debt? Are you blinded to the fact that your current financial condition keeps deteriorating?

Many people just like you continue to look for ways to solve and get control of their credit issues. More some - not all the best solution is in securing a debt consolidation loan.

Consolidating debt may sound difficult and complex but it is a relatively simple, easy straight forward process. Paying multiple bills from a variety of companies - that's complex. The process of consolidating all of your debts by bringing them all together into one single loan with an interest rate that is lower than the other bills you have been battling.

With credit cards carrying rates which can hit 20 percent and accounts from department stores changing rates higher than that it is easy to get behind. If you're debt is mostly with credit cards, consolidating with a loan my be the best option to get back on a firmer financial path.

A lower interest rate will allow more money to go to paying down the debt instead of being eaten up with interest charges. Plus, all your creditors will be pay except the one holing the consolidation loan. In the long run thins should also help improve your credit score.

Managing Your Debt - Simple Tips

Apart from any loans you may get to consolidate your outstanding debt there are some tips you could follow.

Organize Your Finances

Do you know how much money you earn and bring how each month and how that compares to your expenses.

This can be a little on the depressing side and tedious pulling all the figures together in one place, but it is in fact a step you must take. Coming face to face with where you are really at financially. This is also the first step in developing a budget.

Pretending you don't have a financial problem will not make it go away, the debt problems will be there as soon as you get real with yourself.

Begin by writing down your monthly expenses. Try to separate out the essential and non-essential expenses. Which of the non-essential can be eliminated?

Writing down the numbers will help you see in very plain black and white what your financial picture is and help guide you in making better financial decisions.

Consolidating High Interest Payments

Every loan payment has two parts - principal and interest.
  • The principal is the amount owed on the loan
  • The interest is the money being charged to "use" the money you borrowed.
The higher the interest the more money you are paying each month towards interest and the balance does not move much. Paying only the minimum payment on a high interest laon can over the course of time cost you more than the amount of the loan in fees.

Wrapping all your debts into one loan by consolidating them with a lower interest rate can help you to pay the loan off much quicker.

Start Saving

Saving money when you are facing debt problems looks like a difficult and sometimes impossible task. However, building an emergency fund a little at a time can give you some breathing room. Be realistic, if you have some savings you would not be looking at possible bad credit and considering a debt consolidation loan.

Don't Borrow More

If you have taken the steps to get yourself back in control of your finances work towards getting away from using credit altogether. It may be tempting as you see your debts slowly go away but good money management is what go you to the place you are at. Finding a need for more credit will not help your financial position.
About the Author
We've just scratched the surface looking at the topic of bad credit and debt consolidation . Check us out at http://www.everlife.com/debt-consolidation-loans.php.
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