Is a Debit Consolidation Loan Right for You?

One of the most upsetting circumstances in a persons’ life is finding yourself weighed down with debit, to the point where you feel you’ll never get it paid off. Recent reports have shown that the number one issue in troubled marriages is money, and the number one money issue is too much debit. Frequently, marriage counseling professionals find themselves becoming proficient financial advisors due simply to the amount of exposure they have to the issue.

When visiting a debit councilor, expect to be overloaded with questions about your financial situation. They will attempt to find out all your debits, your income, your spending habits, you savings, and compile a complete picture of your financial situation. If you’re not honest with them at this stage in the debit consolidation program, you will never see the results you’re looking for as their plan for a debit consolidation loan will be based un unrealistic income, debits, or both.

Once all these data are on the table and the debit councilor can make some basic calculations, they will tell you what your total payback amount will be, including interest, and how many years it will take you to accomplish it. They will look at where you’re spending your money, and find ways to streamline your expenditures so you can focus some more of your income on paying down your debit. They’ll also look at some debit consolidation loan programs to determine if you would benefit from them or not.

In some cases, a debit consolidation loan isn’t the best answer and will be more costly than simply paying off the debit as it currently exists. This is often the case with secured debit that has a relatively low interest rate. The only benefit a debit consolidation loan will offer in this situation is one lender to whom you must submit payments, and with associated fees, a debit consolidation loan may even cost you more than your current situation.

However, if the debt counselor believes that may benefit from a debit consolidation loan, he or she will begin speaking to all the companies that you owe money to in an attempt to negotiate a decreased payoff amount. A good debit consolidation loan councilor will pass some of these savings on to you, so work closely with them at this point to maximize your benefit.

As a side note, expect the credit card companies to offer lower APRs if you keep your balance with them. They’re making money off the interest that you pay, so it is in their best interest to keep your balance on their accounts. If you do want to keep nay of your credit card balances, maximize this opportunity.

Now, if you decide to keep some of your balance with a credit card company instead of completely utilizing a debit consolidation loan, you need to make sure that everything they agree to is in writing. Many credit card companies and debit collectors are somewhat dishonest and will be happy to get in you in worse trouble than when you started.

There is much to think about before you make a decision about how you are going to solve your debt problems. A debit consolidation loan may be the right answer, but nothing will change down the road unless you learn to live within your means.