A consolidation loan can be very helpful if you can get a good rate and an easy payment plan, then it may be ideal. You can pay off your most expensive bills and then instead of paying several small payments a month, you can just make one payment toward your loan.
Consolidation loans have helped many people crawl out of their debt however they might not be for everyone. There are lenders out there who will charge you high interest fees and within a couple of weeks, you might feel like you’re in debt to a loan shark. It is easy to get trapped in schemes like these so it is important to be wary and always do your research on the company you are borrowing from. Based on your credit rating, you may receive a smaller or larger loan than the next person. There are bad-credit lenders out there but it would be best to take control of your credit and improve it and probably try to take a unsecured personal loan from your bank.
To improve your credit, you’ll want to start with taking a glance at your credit report. You can easily purchase one, but there are some sites out there where you can find them free as well. If your credit score is not the highest, here you can find out the reason why and fix it. A high quality report will give you the phone numbers to call to talk to the debt collectors or lenders. From there, they should be able to set up payment plans with you if you are behind. Some lenders will work with you really well to ensure you get back on track and they get their money back.
Some companies will even go so far as to match your payment. Banks and big corporations are out to get your money, but most people are not. It can be a struggle to get back on track once your debt is out of hand and most people will understand that. Once you’ve set up any payment plans with the lenders, you should invest in a planner or calendar. Write down the due dates of the bills you owe. Write down the amounts as well. Get a calculator and track how much as a whole you owe on a given day. If it is too much or if you are paying more bills with one paycheck than the other, than call again and have the due dates changed if possible. Explain yourself and don’t take no for an answer but always be courteous. Remember you are just trying to keep your head above water here and no one can or should blame you for that.
Once you start making payments toward your late bills and have taken care of all the negative on your credit report, see if there any credit card bills you can just pay off. One less bill for you to pay is always great and depending on what kind of card it is, you can it up or put it away for an emergency. These are great steps toward improving your reputation in the credit world and will put good marks on your record. The more positive on your credit report, the better you will look to lenders making you more eligible for things like loans, lower payments on a car, and apartments.
You may find you are doing well with a calendar and budgeting and have made a large improvement in your finances. Life always happens though (and you should plan for it to well in advance). If you happen to come up short on a payment one month. instead of putting off the bill completely, you should pay what you can. If it is a minimum payment, that’s fine, but if you can’t even make the minimum payment, just pay what you can and try not to stress over it. Pay it off the next check and keep moving forward. As stated before, life does happen and when it does, the timing will not be convenient. You will need money. Airplane tickets, funeral costs, repairs on a house, etc. can all get extremely expensive. Build on an emergency fund little by little. Create goals for yourself. Start with something as little as $30.00 a week and build from there. You’ll want to save at least $1000.
Try to never use it unless there is an actual emergency. You will be grateful to have it when something happens and you need it on short notice. You will get ahead on your finances eventually and maybe you’ll decide to go out and buy a new car or you may want to move your family into a better neighborhood. A car salesman in today’s world will see you coming from a mile away. Prepare yourself before you go to a car lot. Decide what you want to put down for a down-payment, which prices are absolutely out of your price range, what you can budge on, and what you would like to walk off the lot with. Chances are even if you go in with a plan, the car salesman will try to ease you away from it, sometimes without you even realizing it. The main goal is not to walk away with an empty wallet and to walk away with something you like.