How To Consolidate Your Debt - Lower Your Payments

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In today's economy learning how to consolidate your debt- lower your payments is an important factor in getting out from behind your loans, credit cards, and financial obligations.  By alleviating your debt and lowering your monthly payments, it will free you up financially to invest your money, or use it for options that are more frivolous. Once you decide you want to work towards a lower debt payment your first decision is whether you would like to work on it alone, or use a consolidation service.  There are benefits and downfalls to both options.  The easiest way to decide what is best for your situation is to be educated on both.

Consolidating Debt as an Individual
There are options to work on consolidating debt on your own.  Many people believe they must go through a company to achieve financial relief, and this is not necessarily true.  One option is to call your credit card company, if you explain to them that you are going through a rough time financially they may lower your interest rate, or payments for a set period.  Another option, if your credit is not to far behind you can apply for a 0% interest credit card and transfer balances over to pay them off faster.  A word of warning, this may not be the best way how to consolidate your debt- lower your payments because it takes discipline to not run the card you just paid off back up.  A third option is to rank your credit cards by amount owed, and focus on paying of the lowest balance first, then using that money to pay off the next.  With this option, you are always paying the same amount each month, just redistributing as you pay off each debt. This creates a snowball affect and is a very motivating way to lower debt payments since there is a reward as each card or debt is removed from the list. Another recent trend is to use the equity of your house to pay off your credit cards, since interest on a home is usually tax deductible and less than a credit card.  If you have free equity in your home this is one of the better choices, and should be looked at seriously.  Consolidating your debt can be done on your own as long as you have will power and dedication to stay on track.

Consolidating Debt with Help
If you need a more aggressive, or structured approach to financial relief, there are a few options.  First, you may want to work with a credit councilor.  They are available to help you negotiate with your credit card companies for a lower interest rate and or payment; since they may have a relationship with the credit card company, they may get a better result.  A credit councilor will also help you create a budget and stay on track for consolidating debt. Another option that you could use is bankruptcy this could either create a lower debt payment, or possibly eliminate it all together, depending on the type of bankruptcy you file.  However, bankruptcy may not be the best way to financial relief, after declaring bankruptcy it may be hard to make large purchases such as a house, or car for a number of years.

Once you learn how to consolidate your debt- lower your payments you will be on the road to financial freedom.   As soon as you make the decision to consolidate debt act on it, there is no better time than the present to achieve financial goals.</P>