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Article Series: Debt
Relief & Debt Consolidation
I Want To Get Rid
Of My Debt...NOW!
When
Is It Time To Consolidate Debt?
Everyone carries some kinds of debt. Many
carry large debts on their homes. These will take 30 years
to pay off. Others carry large debts on their cars, yet these
are usually paid off within about six years. Some folks, however,
carry burdens of debt that are neither tied to an asset, such
as a house or car, nor do these debts have a specified date
on which it is considered to be repaid in full. Others have
accumulated a lot of intellectual property, but these years
of schooling have left a significant financial dent in their
overall budget.
It
is therefore not surprising that more and more consumers
are looking to consolidate their debts in order to get a
handle
on them. Here is a list of items that should serve as a timely
wake-up call and alert you to the fact that it is
time to consolidate your debts:
If you had to take out a large number of student
loans to
finance your education, the odds are pretty good that now you
are receiving six or ten different repayment notices and booklets.
Depending on the times during which you took out your outstanding
loans, there is also a good chance that each loan carries a
different interest rate. It might be in your best interest
to check into a student consolidation loan that will permit
you to roll all of your student loans into one loan. The advantage
clearly lies in the fact that you no longer need to write six
or more separate checks, but instead one payment will cover
everything. Additionally, figure out what your median interest
rate on your loans is. If your consolidation interest rate
is better than your median interest rate, you will gain another
advantage. On the downside, if the interest rate is not as
good as some of your student loans, it will take you longer
to repay that portion and may actually cost you more money
than it saves you. As you can see, it is important to shop
around for interest rates.
If you have a large
number of unsecured debts, for example
credit cards or department store cards, you might be better
off to consolidate them. Find out how much you are paying in
interest every month on each card, and then take the average.
If you can qualify for a good consolidation loan with your
local lender, you might find that a loan’s interest rate is
significantly lower than that of some of your credit cards.
Sometimes debt has a way of sneaking
up on you that you might
not have expected. You might have a great job and figure this
is as good a time as any to buy a new car, an air conditioner
for your home, a big screen television set, or perhaps treat
yourself and your family to a nice vacation. Suddenly the job
is downsized and you find that you can no longer support your
life the way you have become accustomed to it. Perhaps you
are behind in your bills, or are in danger of falling behind.
This is a definite warning sign that it might be time to consolidate
your bills and benefit from a lower interest rate.
If you have mounting
medical bills that are threatening to
send you to collections and the doctors’ offices will not work
out a payment plan with you, you should best look into consolidation
to protect your good credit.
Anytime that unsecured debts eat up so much of your monthly
income that you have to use revolving credit to make ends meet,
you are in great financial danger. Robbing Peter to pay Paul,
so to speak, is a definite warning sign that you need to review
your finances.
As you can see, there are several warning signs that should
wake you up to the fact that your financial situation is not
improving, but instead might be worsening. Do not simply ignore
these signs, but instead act on them as quickly as possible.
The sooner you are able to stop the financial downward spiral,
the sooner you will be able to climb out of debt, and restore
your credit profile.
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by SolveYourProblem.com
: 2007
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