Here are excellent tips, which can help you choose a debt consolidation program that will suit your needs, personal preferences, and of course, your financial capability:
For Debt Consolidation Loan Applicants:
- Search for credit agencies that can provide you with enough funds to settle your loans and credit card charges, in one full-swoop. This way, you can completely settle your outstanding debts. Moreover, you can stop making huge payments on interest and on other pesky fees.
An important reminder, though. You should resolve to use the proceeds of your loan EXCLUSIVELY for paying off your dues. Resist the urge to use a small percentage of your loan to cover unnecessary costs or to finance unscheduled purchases. And in case there will be extra cash left, set it aside for bringing down the principal amount you borrowed or for covering your loan repayments for the first two to three months.
- Make sure that the credit agency works closely with the three major credit bureaus. This way, you can have the assurance that your good payment habits will be reflected in your credit history, until you can gradually regain your good credit standing. By keeping this tip in mind, you can be sure that the time, effort, and resources you will invest in rebuilding your credit history will all be worthwhile.
- Be ready to offer collateral, especially if you want to enjoy the lowest possible rates of interest and charges. Keep in mind that by securing your debt consolidation loan, you can look forward to receiving immediate approval on your request for funds.
Just don’t forget to keep up with your loan repayments. By doing so, you can reduce, if not completely eliminate, the risk of losing your valuable assets to repossession.
For Those Looking for Balance Transfer Credit Cards:
- Scout for credit cards that come with zero- or low-interest rates. This way, you can significantly reduce the payments you will make on interest. At the same time, you can allocate the savings you will generate from your interest charges to your credit card bills. After all, this will surely help make it easier for you to gradually pay off your charges, until you can completely settle your credit card debt.
- Ask the card issuer if you can lock-in the low rate of interest imposed on your account. Keep in mind that offers for low interest rates usually last for only three to six months. And if you won’t request for the annual percentage rate (APR) to be locked in your balance transfer credit card, it can skyrocket to as high as 15% to 19%.
So, before signing up for any credit card program, be prepared to negotiate with your card issuer for this special provision. This way, you can continuously enjoy the low interest rate that will be imposed on your credit card charges as well as on your balance transfer transactions.
- Scout for a credit card that comes with a reasonable spending limit, especially if you have plans to continuously use it, after settling your outstanding credit card debt. That way, you won’t have to worry about immediately reaching or even spending beyond your limit, in case you charge a huge purchase or bills on your account.
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