how do you find out if its time to consolidate? You see a lot of debt management pitches. You talk about the advantages of credit card debt consolidation but should you do this because experts say it’s benefitial for your finances? Let us try to shed light on when credit card debt consolidation is recommended.
Should you consolidate because you have multiple debts?
Not necessarily. Of course, a requirment for debt consolidation is the existence of multiple accounts. However, you don’t need to consolidate your loans just because you have multiple accounts. If you’re not finding it hard to cope with your loans, then you should go on as you are now, of course, you may want to taking a look at your debts and paying some down just so you can get the best rates and terms possible.
Should you consolidate when you are receiving credit collection calls?
Yes, you should begin looking at debt consolidation options when you are already receiving collection calls. Credit collection agents are some of the most persistent personnel in the world. After all, most of them get paid through commission. Thus, they’re deeply committed to making you pay. Unscrupulous debt collectors would even begin harassing you just so you’d e bugged enough to make a payment.
If you’re at this advanced stage, the best way would be to approach a reputable debt consolidation agency. There are debt consolidating agents who will let you consult for free, and they can certainly help you sort through your financial problems. However, going to a professional debt consolidation agency will give you more options such as in-house debt financing. If they don’t offer in-house loans, they can still find you a good debt consolidation loan and even negotiate your current loans with your creditors.
However, do take note that this type of debt consolidation has repercussions on your credit record. However, this professionally guided debt consolidation option is best if you truly need help with your financial problems.
When’s the perfect time for credit card debt consolidation?
It is when you are finding it hard to cope with your loans that you should consolidate. Ask yourself the following questions:
1. Do you have more than two loans?
2. Do you get confused about your various loans’ monthly due dates?
3. Do you have to keep calling customer service to ascertain interest rates?
4. Have you missed one or more due dates because of a payment mistake (i.e. you sent payment for one loan to the wrong creditor)?
5. Have you defaulted on one or more of your loans?
6. Are you paying mostly interest and not making headway on your principal?
7. Are you finding it difficult to meet minimum dues?
8. Are you sending out at least one check every week?
If you answered YES to all or almost of the statements above, then you may have a problem brewing on your hands. This is the propoer time for debt management – when the problem is at its early stages. At this point, you can obtain a secured loan (say home equity loan) and use the proceeds to pay of all of the loans you have. This will not have a bad mark on your – in fact, it may even enhance it.
Essentially, the right time for credit card debt consolidation would be when you’re having problem coping with your accounts but are still in control of your debts.