Archive for November, 2010
Best Debt Consolidation – What Is Best and How Do I Find It?
Anyone who has too much debt is constantly looking for ways to pay it down and get out from under the burden of multiple payments each and every month. Not only is it expensive to have a bunch of different payments to make each month, it is also time consuming to have to deal with payments for several credit cards, store credit accounts, car payments, gas card payments, mortgage payments, home equity loan payments, etc. The solution for many people is to try to find a way to combine as many of these accounts as possible into one easy payment each month. The challenge then is to find the best debt consolidation for your particular financial situation.
Before you can decide what you need to do to improve your financial condition, you first need to know exactly what your situation is. Grab a piece of paper, sit down, and write down exactly how much you owe on each of your credit accounts. Then write down how much the interest rate is on each of these accounts. You might have to search through the fine print or even call the company responsible for the account to get the rate of interest, but it’s absolutely crucial that you know how much interest you are paying on each account. You can’t make a decision on how to get a better rate if you don’t know what your current rate is.
If you would like to use our simple Average Interest Rate Calculator you can find it here: Average Interest Rate Calculator. It will only give you a simple average interest rate, without regard to changing balances or amounts being paid down, but it can give you a place to start when figuring out where your finances are at the moment.
Once you know how much you owe and what your average interest rate is you will have a place to start. Each situation is unique, but most people fall into one of these categories:
- One or two credit accounts with high interest rates, and the rest have more reasonable interest rates, 10% or under, for example
- Lots of credit accounts, most of which have high interest rates
If you fall into the first category you have a couple of options. You don’t have an immediate need to reduce the already lower rates. Your priority is to either eliminate or reduce the high rate debt first. Try calling the companies that hold that high interest rate debt and see if you can negotiate a lower rate. Many companies will be willing to talk to you about it, especially if you have been a good customer over a number of years. If that doesn’t work then you need to follow the same path as those folks who have lots of high interest rate debt.
If you have high interest rate debt and you are not able to convince the lender to reduce the rates, or if you have a lot of accounts with high rates, then you should consider debt consolidation. The best debt consolidation company will offer you a free consultation to discuss your particular situation. You already know what the average interest rate is on your current debt, so you will be able to compare the interest rate they offer with the one you have now. Don’t hesitate to move on to another debt consolidation company until you find one that will work with you to improve your financial future.