Where Should You Consolidate Debt?
Monday, June 1st, 2009 Subscribe To Our Feed
If you have fallen way behind on your bills and need some help consolidating your debt then you have a couple choices to make. The first one is to try to contact your creditors and work a payment plan with them. The second place to try is a debt consolidation company. A third and more recent option is to use a peer to peer website and try to get a loan.
Trying to work with your creditors on a one one basis is always the first route you should take. This way you keep open lines of communication with them and let them know about your situation. Doing this will improve your chances of having some of your debts lowered or forgiven with a lower interest rate. If you can achieve this then good for you. Do not be mad if they do not try to work with you. There was a contract signed by yourself that you should have known about. Your creditors are in business to make money not lose money.
If they will not work with you then it is on to option two. Now you should look at a debt consolidation company. This company will look at all of the debts you have outstanding and give you a estimate on which ones it looks like they could work to get lowered. They will in turn contact your creditors and start negotiating on your behalf. Many lawyers run these types of companies and are experts in negotiating. When you hire them you will have to pay them a fee and sometimes it can either be a flat one or a percentage of the amount of debt they have negotiated for you. One thing to keep in mind is that it will show up on your credit report as settled for a lower balance. Be prepared to see a drop in your credit scores but be happy knowing that you are probably going to be paying a lot less back. Cura Debt is a popular company that many people work with.
If you have no luck working with your creditors and the thought of ruining your credit is not going to work for you then a peer to peer lending site might work for you. These sites are a community of people who are looking to invest their money with. You make a listing of yourself describing what you need the money for. Normal people, not banks, will pool their money back until the amount you are asking for is reached. When the amount is reached the interest rate at which you first listed yourself up for starts going down as people bid against one another. You want the bidding to keep on going as it lowers your interest rate. After the bidding is done you will be given the money and have to pay it back over a set time period which is usually three years. Your monthly payments back to the loan get divided back to the people. It is a win win scenario as you are getting a low interest loan to pay your creditors back with and normal people can earn a return on their investment. Many people enjoy working with the Lending Club for these types of scenarios.
All of these will help you with your debt problems. Each has their risks and rewards and some are better than others. Do yourself a favor when its over and never get into debt this bad again.
Technorati Tags: No Tags
Related Tags: No Tags
Possible Related Posts
