The first step you need to take is to extensively research the market for the debt consolidation companies and create a kitty of around 3 to 4. Your next step would be to get free debt consolidation quotes from each of these companies. Once you are armed with the quotes, you need to decide on whether you’ll go for secured or unsecured loans. Now, what are unsecured and secured loans?
Secured Loans are given to the customer only when the latter has a property of considerable value to mortgage, like a house. In such loans, the borrower gets a bigger amount of loan with lower interest rates. Unsecured loans are those loans that are given to the customer without any property assurance. The interest rates are higher and the amount is lower compared to the Secured loans.
However, if you are opting for secured loans prepare yourself. If you default payments here, you’ll lose your house! Commit to secured debt consolidation loans only if you are confident of your regular income. The problem is unsecured loans are not any better. These loans tend to trap the borrowers and do horrible things to the credit ratings. The interest rates are high and the borrower ends up paying much more than what he originally owes the creditors!
Do not be in a hurry to commit to hat you think is the best debts consolidation program. Debt consolidation companies can only give temporary relief. You need to find a proper solution to the debt problems you are stuck in. At the end of the day, the best way to slowly but steadily clear off your debts and improve your credit score is to look ways of cutting your expenses and increasing your monthly income simultaneously.
Did you know that on average every debt-ridden household spends $150 to $200 every month on what is not really required? Yes, what you need to do is pinpoint those expenses. Look out for your expenditure on the monthly entertainment magazine subscriptions, those 100 channels on your TV, weekly meals at fast food chains, movies and baseball games, that ‘little bottle’ of foundation, you bought even though you have one which is half used...
Look around for part time or work-from-home jobs to supplement your income. If you are married, your spouse can rope in too! Finally, if you can sincerely control your expenses for a few months, you will realize that you are actually haunted with fewer bills and whatever, does turn up is easily manageable with your monthly income!
A debt consolidation loan from any of the reputable debt consolidation companies can help reduce your debt burden. Look for debt consolidation quotes from different companies to select the Best Debt Consolidation Program . Bad credit debt consolidation loans are also available for people with a bad credit rating.