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Tips To Avoid the Risks of Debt Consolidation Loans

October 16, 2013 by editor

risks of debt consolidation loan

Taking out a loan is a tempting choice for solving financial woes but there are risks of debt consolidation loans. This is a single loan for the total of all bills that you would like to pay off. Using this loan you eliminate all individual bills and instead pay one loan monthly.

Usually the debt being paid off is credit card related with high interest rates so when paying minimum balances you are paying only the interest. The principle remains and you are not really paying down the debt. With lower interest you are able to actually chip away at your core debt. Debt consolidation loans generally allow you to pay over a longer period as well thus making your monthly contribution smaller.

The Risks of Debt Consolidation Loans

Knowing the risks of debt consolidation loans will help you avoid creating more debt while you’re working to pay off the original.

Hazard 1: Feeling free of debt.

Paying off the credit cards that have been hanging over you is a great feeling but that zero balance can give the false sense of being bill free. You still have to pay just as a single loan instead of many smaller bills.

Hazard 2: Repeating Old Habits

If your reason for getting a consolidation loan is overuse of credit this warning is for you. Now that the cards have so much equity available, you may be enticed to begin using them again. If you can’t control your spending you may end up running up the same card you are still paying off with your loan. The best way to avoid this is to close off your accounts save for one. The single open account can be used sparingly and paid off in a timely manner to fix your credit score or if your score is still intact this card should be kept somewhere you cannot use it for impulse purchases.

Hazard 3: Check that interest rate

If your credit is good or you are able to provide collateral you can benefit from the lower interest discussed earlier. If, on the other hand you have no collateral to put up and your credit score is already low you run the risks of debt consolidation loans interest being higher than that of the original debt and ending up owing more than you did originally. Be certain to investigate more than one lender and various solutions before committing to something that will not significantly lower your current payments.

Hazard 4. Collateral can be the highest price to pay

The greatest equity most people have at their disposal is that of their home. Risking your home for a loan means if you are unable to pay back the loan for any reason you will lose your house. This is true no matter what you use to secure your loan however it is one thing to lose an automobile, piece of jewelry or other valuable, it is a devastating loss to say goodbye to the sanctuary of a roof over the head of your family.

Take some time to seriously consider whether you can avoid these risks before taking the plunge. There are other ways and it is best to investigate each fully and making an educated decision.

Debt Consolidation Loans CAN Work For You

Now that you have considered the risks associated with this type of loan we can discuss the ways you can make it work for you. One useful point is that consolidation loans can be used in a much more flexible way than debt management or settlement which are far more limiting as to the types of debt you can pay with them. Secure loans cannot be included in other debt payment types but loan consolidation can take them under their umbrella as well as loans that not even bankruptcy can forgive such as Federal Student Aid.

Having looked at both the possibilities and risks of debt consolidation loans if you believe this is the right choice for you here are some tips for making the most of the program:

  • If the interest is not lower than your current interest keep looking. There are many options such as payday loans, peer loans, secure and personal loans. Do not jump into the first one you check, make sure you’re getting the best possible rate.
  • Be sure you’re eligible for the right loan. Good credit and a steady paying job are essential.
  • Be prepared. Unlike other programs there is no one there to guide you along the way. Go in with a payment plan and stick to it.

The most important to do is to learn from the situation and avoid repeating mistakes. If you are aware of and avoid the risks of debt consolidation loans you can get yourself out of debt.

Filed Under: debt consolidation, debt consolidation loans Tagged With: debt consolidation, Debt Consolidation Loan, Risks Of Debt Consolidation Loan

There Are Ways to Consolidate Debt without Breaking Your Bank

August 7, 2013 by editor

If you have many credit cards with debt on them life can be complicated. Outstanding debt can take over your life- depriving you of things that you would have otherwise liked to do with your money. It often takes a long time to pay these debts off. Some people moreover have debt on a large number of cards, for instance seven different cards. But, despite seeming like a daunting task, debt consolidation is possible. It will take some time to consolidate and pay off your debt, but there are a few ways to consolidate debt that you should explore in order to get out from under debt.

Use Debt Consolidation

Debt consolidation is a one of the most efficient ways to consolidate debt. This involves procuring a loan to repay all your outstanding debt so that instead of several high interest debts you have just one loan to pay off. High interest credit card debt, education loans and outstanding utility debt can be included in this loan, while mortgages cannot. Debt consolidation can be done by:

  • Major Banks
  • Non-profit debt consolidation companies
  • Credit Union

Ways to Consolidate DebtIt is a good idea to compare several debt consolidation loans before you decide on one as sometimes debt consolidation companies charge high fees in order to consolidate debt and this may add to your existing debt. However, banks or credit unions have lower interest rates on loans and lower fees. While you do need to demonstrate an ability to pay back your debt consolidation loan and steady income, getting a debt consolidation loan is fairly uncomplicated. Your debt consolidation agency will pay off all your debt on your behalf and you, then, will only have to pay one loan off at a lower interest rate than your credit cards.

Bank on Your Home

If your own your own home, use the equity you have on your home to pay off your outstanding debt. You can borrow, with a home equity or a line of credit, borrow up to 30% of your home’s value. Home equity loan and a home line of credit is a way to unlock the value in your home to solve debt issues. A home equity loan is a close-ended account that has to be repaid over a certain period of time while a home line of credit is an open-ended account like a credit card against which you can repay and borrow against. Home equity loans tend to have higher borrowing limits and low interest rates. This is beneficial as interest rates on home equity or a line of credit is way less than APRs on credit card balances. However, using the value of your home to pay loans does have its risks. If you forestall on payments you could put your house at risk. You may end up with home foreclosure, putting you in a worse position than before.

Borrowing from a Life Insurance Policy

Although this should not be your first choice, borrowing against a life insurance is a viable and preferable option than being bankrupt. You can borrow the cash value of your life insurance and use it to repay your high interest debt. You have to consider, though, that there is an interest on this loan (like any other loan) that needs to be paid at regular intervals. Remember if the loan is not repaid then you will no longer have life insurance for your loved ones after death.

Balance Transfer to other Credit Cards

If you have a card with a big credit limit or are being offered one, consider transferring any outstanding debt to the one with a higher limit.  Most companies that you consider moving to will offer you a low balance transfer interest rate, therefore by moving debt you will be saving money. By saving on interest, you may be able to pay debt back sooner.

Borrowing from Retirement

Remember that over all your working years, you paid into your retirement? You can get an advance on this retirement money. But, this really should be a last resort option because the amount has to be paid back over five years. Any money that is not paid back is considered early withdrawal and the amount is subject to income tax and penalty. If you retire the loan must be paid in 60 days or early withdrawal penalties will apply.

What’s Negative about Consolidating Debt

Debt consolidation can provide you with peace of mind and better credit ratings, but each has its benefits and harms. Know the benefits and harms of the debt consolidation method you choose and be sure to pick one that will get you out of debt rather than one that will push you deeper into it.

 

It is good to know about the several ways to consolidate debt as high interest debt can destroy your lifestyle. But, it is only viable if you are disciplined enough to pay off any debt consolidations as well and you make considerable effort to change your habits to pay off all debts.

Filed Under: debt consolidation, debt consolidation loans, debt relief Tagged With: Consolidate Debt, debt consolidation, debt consolidation loans, How to Consolidate Debt, Ways to Consolidate Debt

Utilize Your Debt Relief Option To Achieve Success Inspite Of Debt

June 21, 2013 by editor

Utilize Your Debt Relief Option To Achieve Success Inspite Of DebtBeing in debt does not mean it is the end of the world for you. If you react to it correctly, it might be the catalyst that will help you achieve elusive financial success. You may be surprised that there are millionaires and billionaires who once declared themselves bankrupt. They were able to rise from the ashes of their financial ruin and emerge victorious and happily rich at present.

That can be your success story. If you are wondering how to do that, pay attention to what we will discuss in this article.

First of all, you have to accept that there is something wrong with the way you are living your life. If you got yourself in debt, that means you have been living beyond your means. You have to correct that so you no longer incur debt.

Once that acceptance is solidified, you may want to consider the options that you have to achieve debt freedom. If you want to be successful in life, you want to make sure that your option will not harm your chances to improve your personal wealth. Usually, that means you have to take care of your credit score. It will allow you to gain better deals in loans that you can use to improve your income. After all, this is commonly included in the background check that employers makes for applying employees. It can also open up business opportunities that you may want to set up.

Debt consolidation is your best option at this point. It will provide you with a more structured payment scheme that will eventually assist you in paying down what you owe. If you chose debt consolidation loans, your score will slightly dip as your debt amount increases. However, once you have paid off the other loans with that new loan, your score will improve again. In debt management, it is usually not reflected in your credit report.

Another great thing about this debt relief option is it lowers your monthly payments. You can use the freed amount to grow your savings and to invest it in a business venture. As you grow your income, you can make bigger monthly payments and that will help you get out of debt a lot faster.

Since this debt solution will not reduce your debts, you will feel the full impact of your debt payments. If you work hard to get out of debt, it will leave a more lasting impression on you. That hardship will keep you from incurring more debt or landing yourself in another debt situation. This is very important because you have to learn your lesson. Some people who went the easy way out did not feel the full impact of how debt can ruin their lives. They did not mend their ways and soon ended up in debt once more.

As you pay off what you owe, you need to identify the lessons that you have to learn to keep away from another debt situation. These involve saving, budgeting, smart spending and the overall living within your means state of mind. This is what will fuel the success that you wish to achieve in your life.

Filed Under: debt consolidation, personal finance Tagged With: debt consolidation, debt freedom, debt relief, personal finance

Tips To Deal With The High Interest Of Credit Card Debt

June 17, 2013 by editor

Credit card debt becomes difficult to pay off primarily because of the high interest rate. The interest amount that you will pay on top of your principal balance will always change depending on your debt. This means the bigger your balance, the bigger interest you will end up paying for. And that will continue to accumulate unless you do something about it.

Fortunately for you, there are many ways to deal with the high interest on your credit cards. Let us discuss them one by one.

Tips To Deal With The High Interest Of Credit Card DebtRequest for a lower interest.

Ask and you shall receive. Believe it or not, this is sometimes effective especially for those who have a good credit standing and have never been late on payments. Just pick up that phone and give them a call. It wouldn’t hurt to ask.

Refuse interest hikes.

Credit card companies have the right to change interest rates without reason. However, the government mandates that consumers must be informed of it. So if you receive this notification, you also have every right to refuse the hike. Two things can happen here: the creditor can accept your refusal and retain your old rate or they can deny your request and agree to close your credit account (after giving you ample time to pay off your balance).

Transfer your balance to a lower interest card.

Balance transfer is a great way to cut back on high interest for a couple of months so you can make significant payments towards your principal debt. It is actually a great debt consolidation option. For a minimal balance transfer fee (3% of the amount being transferred), you get to enjoy an introductory promo of zero interest from 6 months to a year. That can help reduce your debts significantly.

Apply for a debt consolidation loan.

Speaking of debt consolidation, you can apply for a loan that is big enough to pay off all your high interest card debts and leave you with one big loan that is stretched over a 5 year period. Personal loans usually have lower rates than credit cards – especially secured loans. So if you have a good credit standing or a collateral, this can be a great option for you.

Enroll in a debt management program.

While the low interest is not a guarantee, you can also give debt management a shot – at least if you do not qualify for balance transfer or debt consolidation loans. The credit counselor who will work with you will negotiate with your creditors for a lower interest. If you are current in your payments, they may approve. But again, this is not a guarantee so don’t put all your hopes on this one.

Stop using your cards.

If you really want to solve your interest woes, you need to stop using your credit cards. Pay down your debt and keep you card to ensure that you will not have easy access to it. If your credit score can take a hit, cut your cards and keep only one – preferably the one with the low interest. Don’t worry about your credit score because as long as you keep making good payments on your debts, it will go up.

Filed Under: debt consolidation, debt relief, personal finance Tagged With: balance transfer, credit card debt, debt consolidation, debt relief, high interest rates

New California Law: More Consumer Protection Against Debt Collectors

June 9, 2013 by editor

Consumers in California have reason to celebrate as a new law was passed in their State to protect them against abusive debt collectors.

New California Law More Consumer Protection Against Debt CollectorsOne of the causes of debt stress are the abusive practices of debt collectors. Those who are in debt know about their responsibility and that makes it easy for collectors to intimidate them. And if they are not aware of their rights, then it will be easy to bluff them and dupe them into paying even if they cannot afford it.

Recently, the California Senate passed a bill that required debt collectors to submit proof that the person they are calling to collect debt from is indeed the owner of that particular debt. Otherwise, they are in violation of SB-233 Debt Buying.

It is very important that consumers know their rights when they are getting out of debt. Knowledge will be your best asset when you are trying to battling down your debts. For instance, you need to know that abusive practices in general are in violation of the FDCPA or Fair Debt Collection Practices Act. This is implemented by the FTC or Federal Trade Commission. You cannot be threatened or harassed by the debt collectors. By knowing your rights, you will identify any bluffs that the collectors may be throwing your way.

The same is true when you are choosing a debt relief option. Researching on the different ways that you can get out of debt will be your best arsenal against your financial problems.

For instance, if you have enough money for minimum payments and you want to take care of your credit score, debt consolidation is the best way to accomplish that. This debt solution will allow you to make debt payments more manageable because it provides you with a single payment plan. Not only that, this program will help lower your monthly payments. It will free up funds in your budget so you can grow your savings. By doing so, you can be on your way towards financial stability as you work on paying off everything that you owe.

But if you want a bigger reduction, you may want to consider debt settlement that aims for debt reduction. This method involves negotiating with your creditors so they will allow you to pay only a percentage of your debt and have the rest of it forgiven. This is more tricky to accomplish because the collector may drag it out and it will ruin your credit score – although not as much as bankruptcy will. If you opt for this, you need to do more research on the law protecting you as a consumer so that you will not be abused as you try to negotiate.

Both of these will help you but the bottom line is, you have to know which one is best for you. There is no one formula to get out of debt and you have to base it on your financial capabilities. By doing so, you can find the right solution that you can afford and complete.

Filed Under: debt relief Tagged With: California SB233 Debt Buying, consumer protection in California, debt collectors, debt consolidation, debt relief in California, debt settlement

Debt Consolidation Options That Do Not Require A Loan

June 1, 2013 by editor

Debt Consolidation Options That Do Not Require A LoanIf you are wondering if you can consolidate your debts without using a loan, yes that is possible. In fact, there are three ways for you to do so.

The first option is known as debt management. This type of debt relief requires the presence of a debt counselor. With a minimal fee of $50 a month, you can benefit from their expertise, guidance and negotiation skills. You will begin by making a debt management plan that will contain your proposed low monthly payment. Take note that there are no reductions here. You are merely stretching your term so that the longer period will allow you to lower your monthly payments. This plan will be presented by the counselor to your creditor. They will also try to negotiate for a lower interest rate – but that is not a guarantee. When they approve of the plan, you can send the total monthly payment to the debt counselor who will take charge of sending the portions to the creditors – as indicated in your debt management plan. You need to stick to this plan because failing to do so will forfeit the agreement and could return you to your usual high interest contributions.

The other option that you have is balance transfer. This is literally transferring your other credit card balances to a new card. This card has an introductory period that provides you with a zero interest payment plan. This promo usually lasts for a minimum of 6 months to a year. You will pay a balance transfer fee that is a percentage of the amount that you will shift to the new card. It is usually 3% of the debt amount. There is no professional helping out here so you have to be careful. The trick to maximize this debt consolidation option is to put in as much payment as you can into your debt during the promo period. Any amount that you will send will be credited to your principal debt. Using a frugal budget during this period is sometimes the most ideal tool to make it work.

The last option, though usually not associated with debt consolidation is debt settlement. It is only similar because it allows the debtors to create a single payment plan through a debt settlement company. This type of debt relief option targets to reduce the debt of the consumer. The idea is to convince the creditor that you are in a financial crisis so that they will allow you to pay only a percentage of your debt and after you have finished that, the creditor will forgive the rest of what you owe. This is effective but only if you do the negotiations correctly. The creditor will be unwilling at first to give in. But if they do, you can find yourself out of debt in a couple of years.

All of these options have their own pros and cons. Make sure that you do your research to see which one is the best option based on your financial capabilities and the type of debt that you owe. Usually, these three are best for unsecured debts. If the bulk of your problem involves secure loans, you may want to reconsider debt consolidation loan as your debt solution.

Filed Under: debt consolidation, debt relief Tagged With: balance transfer, debt consolidation, debt consolidation loan alternatives, debt relief, debt settlement

Use Debt Management To Deal With Debt Stress And Achieve Debt Freedom

May 25, 2013 by editor

Debt brings into our lives a lot of stress. It is such a difficult and restrictive situation to be in that those in debt want nothing more than debt freedom. Although you are working as hard as you can, you are not allowed to enjoy that money because you have so many credit obligations to deal with. So here’s what you can do to help with debt stress and achieve debt freedom: debt management.

Use Debt Management To Deal With Debt Stress And Achieve Debt FreedomAs one of the many ways to consolidate debt,  debt management involves a debt counselor who will help make your debt and finances more organized. If you choose this solution, you will find that the stress you used to feel will be minimized. The counselor will take over any communication with your creditors. They will also help you come up with a plan that best suits your financial capabilities. You don’t have to worry about your money and how you can afford to pay off all that you need to finance. You can pay off your basic necessities and still take care of your payments.

The debt counselor will help you come up with a debt management plan that will distribute your debt balance over a long payment period – at least, it will be longer than the current.  This will allow you to make lower monthly contributions. The counselor will present this to your creditors to convince them to allow you to use this plan for your debt payments. When they agree, you can send the total monthly payment for all your creditors to the counselor. They will be in charge of distributing the funds to all the creditors that you enrolled in the debt management program. That makes it very convenient for you.

Since you don’t have to communicate with your creditors, you will feel the debt stress going down. Not only that, the ease that the debt counselor helps you attain will allow you to concentrate on growing your income. The process makes it easier for the consumer to complete the program – thus making debt freedom more guaranteed.

Despite the obvious benefits of this debt solution, you still need to do develop a couple of habits that will teach you proper financial management. This will help you stay debt free. Here are a couple of habits that you need to learn.

Budgeting. This involves a plan that will indicate your income and expenses. Be as detailed as possible especially with your expenses because it will help you determine if you are overspending or not. If you are, you can adjust your expenses accordingly or you can earn more to accommodate all your expenses.

Saving. This is an important habit that will support your debt freedom. If you have adequate reserve fund, you can support yourself and your debt payments even when certain situations compromise your main source of income. Also, any emergency expense can be funded without a problem. You don’t have to borrow money anymore.

Earning through a supplemental income. One of the great things about having more than one source of income is financial stability. Even when your main income is gone, you still have some money coming in. It may not be as big as before, but if you combine that with your savings, you should be alright.

Filed Under: debt management, debt relief Tagged With: debt consolidation, debt freedom, debt management, debt stress

Are Debit Cards Really Helpful To Maintain Debt Freedom?

May 22, 2013 by editor

Credit cards are getting so much negative feedback because of the fact that so many consumers are suffering from the debts that have accumulated because of it. The whole concept of this card is to allow consumers to purchase items that they cannot afford at present. They are allowed to pay for it using a future income that has the possibility of not arriving. If it is compromised, the consumer is left with a high interest debt that can end up ruining their financial stability.

Are Debit Cards Really Helpful To Maintain Debt FreedomThis is why debit cards are starting to be a popular alternative for cashless purchases. Some people think that by eliminating credit cards, they are saving themselves from potential debt.

While this may be true, it is only right that you find out what you can about debit cards before really using them.

The benefit of debit cards is the fact that it allows you to purchase items without carrying cash. This is much more safe. When you lose your cash, it is gone for good. If you lose your debit card, you can simply inform the card company so they can freeze the account so it will not be used by the person who got hold of it.

The safety is also for the debt that you will not acquire. Unlike credit cards that rely on future income for payment, you have to deposit money into your debit card before you can use it. When it runs out, you don’t have to worry about overspending. You cannot spend more than what you have deposited into your account. It supports the practice of living within your means.

Most retail stores also give reward points for the use of these cards. These points can be exchanged for products and freebies. Sometimes, it can be used to purchase more products. Some of the popular stores have their own debit cards that you can use and stock up points.

However, all of the benefits do not really answer the question of debt freedom. Will it help maintain a debt free life?

First of all, you need to get out of debt first. If your credit card got you into debt, you have to pay it off to achieve debt freedom. You have several options but if you wish to maintain a good credit score as you pay off what you owe, you may want to use debt consolidation. Once you have paid it off, make the decision to cancel your credit cards. You can choose to have only one credit card or to get rid of them all and use only debit cards from now on. A combination may be good for you too.

Once you are debt free, maintaining them is easier if you have debit cards. Since these cards will not let you overspend, you don’t have to worry about going over budget. You just have to make sure that you put in the right amount into your card.

One piece of warning, make sure you understand the fees involved in debit cards. There are certain fees that you have to pay for when you make any transaction. You need to understand the fine prints before you sign up to anything. Not only that, make sure the account where you will put your debit card money is FDIC insured – just in case.

Filed Under: debt consolidation, debt relief Tagged With: credit card debt, credit cards, debit cards, debt consolidation, debt freedom, living within your means

Make Debt Freedom Last Through Debt Consolidation

May 13, 2013 by editor

Make Debt Freedom Last Through Debt ConsolidationDebt freedom eludes some people because they fail to implement important habits while they are going through the program. This is especially true for those who have chosen debt consolidation.

Among the other types of debt relief, this has a high percentage of people who are unable to achieve debt freedom. It can be because they were unable to complete the program or it can be caused by backsliding into more debt. While the completion rate is low, it is unfair to assume that the whole program is flawed. It is an effective way to achieve debt freedom but the thing is, you have to know the right habits to implement and the pitfalls to avoid.

Unlike debt settlement or bankruptcy, debt consolidation requires the consumer to have a steady income to support their debt payments. This method of paying off debts will only combine your different debt accounts so that paying off what you owe will be more manageable. Although a lower monthly contribution is oftentimes enjoyed, it will not reduce the total amount of debt. You will still end up paying the whole amount that you owe your creditors. The lowered payments becomes possible because the balance is distributed over a term that is longer than your current.

The low monthly payment, longer term and the lack of debt reduction makes for a slow going debt payment. This makes for a scenario that can easily bring discouragement to the debtor. If you want to avoid this, you have to create a payment plan that provides encouragement through pre-determined milestones. These will mark small successes for you and should be partnered with a reward that will help motivate you.

Once you have dealt with the possibility of discouragement, there is another issue that you have to work on – putting yourself further in debt.

Although effective in paying off your creditors, debt consolidation has a high chance of putting someone further in debt. The single payment method is sometimes perceived as a false sense of solution. The ease is a double edged sword. You end up feeling like your debts were not as bad as you thought it was and that may give you the false excuse that you can borrow some more. For instance, when you use debt consolidation loans to pay off your credit card debts, all your cards will be back to zero balance. That makes it very tempting to use. Remember that you haven’t really paid off your debts. You just shifted it so that it becomes easier to manage so you can concentrate more on growing your income for your debt payments.

Debt relief takes some form of adjustment. If you got yourself in debt. That means something was wrong with your old lifestyle. Make sure you implement the right adjustments by practicing the right financial management skills. Also, give yourself some allowance during the first 30 days. A drastic change may take its toll on you. If you think that cutting back on your usual expenses is needed, go at it slowly. It’s similar to how crash diets don’t always work. Make the changes but also ensure that you can commit to them. That is how you make debt freedom last in your life.

Filed Under: debt consolidation, debt relief Tagged With: debt consolidation, debt freedom, debt relief success, effective debt relief

Don’t Let Debt Discouragement Affect Your Debt Consolidation Efforts

April 29, 2013 by editor

Debt discouragement is something that debtors should be aware of. This is a feeling of hopelessness that can sometimes be very crippling. It makes you want to give up on your current debt relief program and even prompt you to make drastic measures.

Don't Let Debt Discouragement Affect Your Debt Consolidation EffortsThis feeling oftentimes plague those who choose to go through debt consolidation. This type of debt relief does not reduce the overall debt amount. Despite the lower monthly contribution, you will still be required to pay off everything that you owe – albeit in a more structured payment plan. The low monthly payment and the lack of debt reductions gives debtors the feeling that they are not making any progress in their debts at all.

Before you can quit debt consolidation, it is important that you try to battle your debt discouragement first. It may still be the best option for your unique financial situation. Try to save it to avoid wasting the time and effort that you already invested in this debt relief program.

First of all, look at the root cause of your discouragement. Is it caused by the seemingly slow progress? If so, you need to review the process of debt consolidation. The low monthly contributions will make it look like it is slow going. Try not to focus on how long you have left to pay off. Instead, concentrate on how much you have paid off so far.

Another thing that can do to battle that discouraging feeling is to go back to your financial goals and priorities. When you began this journey, you should have defined your goals. Remember why you chose debt consolidation among the other options. It will put your progress in perspective. For instance, if you chose this program because you wanted to put up your business as soon as you get out of debt, then you need to take care of your credit score. That is the only way you can get a good interest on your future business start up loan. Or it can be a home that you want to finance in the future. Hold on to these goals and you should find the motivation to override any discouragement that you are currently feeling.

It also helps to create milestones that will mark significant times in your debt relief efforts. Concentrate on these instead of the complete payment of your debt – which in debt consolidation is usually 5 years. Set up yearly or twice a year reasons to celebrate. This will help motivate you as short term goals can be achieved faster – thus giving you the satisfaction early on. You can set up as milestones percentage markers – like how much you have paid off already. Don’t make it too near nor too far. Space it well and make sure you allot a bit of your budget to celebrate.

It also helps to talk to a professional or a loved one for motivation. You can choose a debt counselor who will use their expertise to motivate you. Or your spouse can do the encouraging. Having a support system will help you out of any tight fix in your life.

If you happen to feel this discouragement anytime in your journey towards debt freedom, just concentrate on the positive. Keep your attention on what you have achieved and not what you had to lose in your lifestyle.

Filed Under: debt consolidation, debt relief Tagged With: debt consolidation, debt discouragement, debt relief, get out of debt

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