Where Should You Consolidate Debt?
Thursday, May 21st, 2009 Subscribe To Our Feed
If you have fallen way behind on your bills and need some help consolidating your debt then you have a couple choices to make. The first place to call is the company who you are paying your bills to. The second one is to contact a debt settlement company which will work on your behalf to lower your debts. The third place to try is by using a peer to peer lending site.
Trying to work with your creditors on a one one basis is always the first route you should take. This way you keep open lines of communication with them and let them know about your situation. Some companies will forgive some debts or lower the rates you pay on them. If you can achieve this then good for you. Do not get upset if this does not work. There was a contract signed by yourself that you should have known about. The company is in business to make money not lose it.
If that does not work you need to start looking at other options. Its time to call a debt settlement company. They will take a look at all of your debts and let you know which ones they have a chance of lowering for you. They will in turn contact your creditors and start negotiating on your behalf. Many of these companies are ran by lawyers who are experts in negotiation. When you hire them you will have to pay them a fee and sometimes it can either be a flat one or a percentage of the amount of debt they have negotiated for you. One thing to keep in mind is that it will show up on your credit report as settled for a lower balance. Be prepared to see a drop in your credit scores but be happy knowing that you are probably going to be paying a lot less back. Cura Debt is a popular company that many people work with.
If dinging up your credit report is out of the question then a peer to peer lending site could work. These sites are a community of people who are looking to invest their money with. You make a listing of yourself describing what you need the money for. These people bid at different interest rates and amounts until the amount you asked for is reached. When the amount is reached the interest rate at which you first listed yourself up for starts going down as people bid against one another. The more bidding means the lower the rate you will pay. After the bidding is done you will be given the money and have to pay it back over a set time period which is usually three years. You make monthly payments back and the people earn the interest rate you are paying them. Every body wins here because you get a low rate loan, no dings on your credit report, and normal people earn money for helping you. A popular peer to peer site is Lending Club.
All three of these methods will help you one way or another. Each has their risks and rewards and some are better than others. Do yourself a favor when its over and never get into debt this bad again.
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