When experiencing cash crisis and bad debt, anyone can feel confused and helpless. Some people can make decisions in a hurry in the hope to solve their problems right away. For instance, many consumers think that filing for bankruptcy is a quick and easy solution to extreme debt problem.
But the truth is, seeking bankruptcy is not an easy escape to your responsibilities to your lenders. Before you even start thinking of bankruptcy, consider all other possible options first and save yourself from more trouble.
For instance, you consider acquiring a debt consolidation loan. Consolidating can help stop your debts from continuously accumulating. The high interest rates can be cut off. Furthermore, you can lower your monthly payments without worrying about late penalty charges.
Another advantage of consolidating debts is that you’ll only have to deal with one lender. Instead of experiencing stress because of dealing with multiple creditors, you can give yourself the peace of mind that your creditors won’t be bothering you.
Needless to say, consolidating your debts by getting a loan is not an instant relief to debt problems. Remember that you will still have payment obligations to your debt consolidation company. Nevertheless, you can create a repayment plan that works for your budget. Many loan consolidation companies also offer lower interest rates so you can save a great deal.
Don’t forget to consider the risks as well. Since a debt consolidation loan is often a secured loan, it also involves the risk of foreclosure should you default from your payments. Yes, defaulting from your loan consolidation payments could lead to bigger trouble so you need to be very smart to stay consistent with your payments.
Consolidating Your Credit Card Debts
If you’re having trouble with credit card debt, you may consider getting a balance transfer credit card with a low interest rate. Take advantage of the credit cards introductory offer and do your best to pay off all the balances you’ve transferred while interest rate is still low. In fact, some balance transfer credit cards offer zero percent interest rate for 6 to 12 months so you can focus on paying off your charges minus the additional interest.
As you see, there are other ways to deal with debt other than filing for bankruptcy. Unlike a bankruptcy, getting a consolidation loan or a balance transfer credit card wouldn’t stain your credit history with a negative record for seven long years.