Frequently Asked Debt Help Questions
What can I do to get help with my debt?
The first step to managing debt is to develop a budget that takes into account all income and expenses. Secondly, contact your creditors at the first sign of difficulty; do not wait until you are wading through financial turmoil because at that point these creditors may have given up on you. Lastly, if you are referred to a collection agency, familiarize yourself with your rights. You can visit the Federal Trade Commission for detailed information on these rights.
What should I do if I have a budget, but still have persistent financial difficulties?
You should immediately contact your creditors and tell them your situation. They may set up a modified, more manageable payment plan to assist you. You should also consider getting counseling.
How long will it take me to pay off my debt?
Evaluating the prospects of debt payment depend in part on how much money you owe, the interest rate attached to the debt, and how much money you are able to set aside every month.
What is debt consolidation?
A means of satisfying debt by structuring a plan whereby consumers pay back the money lent to them under a single loan/payment plan.
What are the first things to think about when considering debt consolidation?
You should start by assessing your income, fixed (regular) expenses, and variable expenses which include clothing and entertainment. After doing this you should be able to determine the extent of your need. Debt consolidation counseling is also available for more comprehensive assistance.
How does debt consolidation work?
Usually done in consultation with a counselor, borrowers may reduce the sum of their payments by assessing the financial condition of the borrower and realistically calculating a payment plan.
What is a debt consolidation loan?
A loan designed to pay off other loans. These loans may lessen the total amount of money paid by eliminating debt with higher interest rates.
What is the purpose of a debt consolidation loan?
Primarily designed for homeowners wanting to better manage their debt. These loans may reduce the interest-rate related to unsecured debt by placing their home as a form of guaranty securing the debt.
Under what circumstances should I apply for a debt consolidation loan?
Homeowners should apply for these loans when they have a lot of high interest, unsecured debt.
What should I do before selecting a debt consolidation service?
First, get every promise made in writing. Second, determine their service offerings and their price. Lastly, research them at the various consumer protection offices, such as the Better Business Bureau, in order to gauge their fidelity and success.
Will using a debt consolidation service hurt my credit?
It depends; there are some debt management programs with consumer credit counseling services where debt consolidation is not reported to the credit bureaus. Many times if creditors do report to these bureaus, the notation is removed after complete payment is made.
When do I know that I need debt consolidation help?
You need to assess your debt-to-income ratio and determine how much is manageable for your given situation. If you were to find that your debt-to-income ratio is too high, you should consider getting in contact with a debt consolidation service.