Alternatives to Debt Consolidation
Consolidation can be a huge financial and psychological burden. To avoid the unwanted stress, consider the following alternatives:
- Negotiate interest rates – If you feel like you can still keep your credit cards open but want to reduce the amount of debt you have now, try to negotiate the interest you pay on each card. If you’ve been an exceptional customer and have paid your bill on time, the company might be willing to cut you a deal.
- Debt payoff planner – Use a planner to make an aggressive plan to pay off your debts. Depending on how much credit card debt you have, this can take several months or years, but doubling or tripling your credit card payments and reducing other non-essential expenses can be a rewarding experience in the end.
- Debt settlement – Calling your credit card companies and asking for a settlement is the best place to start. It doesn’t hurt, and many financial companies will consider it if you close the credit card account first. This option won’t work with all loan consolidation issues, but for serious cases it may be a viable option.
Each option requires a significant amount of research and planning. Regardless of whether you choose to consolidate your debt yourself or get help from a debt consolidation firm, be sure and use a debt payoff calculator and track where you are at all times. In some cases, if you need both loan consolidation and credit card consolidation, two different methods of repayment will be necessary.
There will be unpleasant times ahead for sure. Paying off debt is an emotionally taxing process, and at first it will feel overwhelming. Just remember this: The best time to start was a year ago. The next best time is today.
Photos by Quazie.