When you make the decision to pursue a debt consolidation loan, you might be tempted to dive into it without any preparation. However, your journey into debt consolidation will be more successful if you prepare first.
Know Your Credit Report
Before you begin the process of debt consolidation, you will want to make sure that you know your credit report front and back. If there are any inaccurate parts of your credit report, you may have difficulty obtaining a debt consolidation loan. When you find an error, it's important that you dispute it.
Fortunately, you are entitled to a free credit report from all of the major credit reporting bureaus. There are also many services that will provide you with a summary of your credit report to help you better understand it.
One of the reasons why knowing your credit report is so important is that you need to get to the root of the problem regarding why you are in so much debt. You can get a better handle over the lifestyle decisions you have made that have led to you taking on so much debt. Consolidation is usually an option for debts that are $10,000 or more. This level of debt doesn't usually accumulate overnight.
Know How Much You Owe
In addition to looking at your credit report, you must make sure to gather all of your credit card statements to know how much you currently owe. By knowing how much you owe, you can also make a more informed decision regarding whether you should consider debt consolidation services or whether you should come up with a payment plan on your own.
In some cases, a debt consolidation program can save you money despite the credit card balance transfer fees. For instance, if the debt consolidation plan leads to debts with a lower interest rate, you'll have an easier time paying your debt off. There are often promotional interest rates that allow you to save money if you are able to pay off the debt you owe within the allotted time frame.
Keep Statements
Taking charge of your finances is an important part of beginning a debt consolidation program because you will be required to keep account statements that are sent by your creditors. You are then required to send these reports every three months. The interest you are still being charged is often not reflected in the balance reports, so you will need to correct these reports.
For more information, look into debt consolidation attorney services.
Share
