Debt consolidation may sound simple in theory, but in reality, it can be quite complicated. Some people actually end up in a less favorable position following an attempt at consolidation, so pay close attention to the following tips. They can help you consolidate your consumer loans (forbrukslån) in such a manner that you come out on top and can more easily manage your finances thereafter.
One sign that a debt consolidation company is reputable is whether or not they are a member of an organization, like the National Foundation for Credit Counseling (NFCC). Even if the company verbally confirms to you that they are a member, make sure you still research it to make sure what they are saying is true. A member of an organization like the NFCC has to follow certain rules, like only employing certified credit counselors.
Use bankruptcy as a negotiation tool. Creditors would rather get some of their money back than get nothing at all. Let them know that if your debt cannot be reduced, you will probably be forced to file bankruptcy. This can spur the creditor to resort to a more satisfactory compromise that reduces the debt owed.
Debt consolidation works best when applied to credit cards (kredittkort). If you have significant balances on various cards, you’re probably paying way too much in interest and could benefit greatly from a debt consolidation loan. See if you can’t combine all of the debt into one payment with a favorable interest rate, and limit your credit card spending once that is accomplished.
Consider the benefits of debt consolidation or refinancing (refinansiering), even if you’re debt isn’t that heavy. For example, a debt consolidation loan with very favorable terms can save you a lot of money in interest every month. A single payment is also much easier to manage than many. Weigh the pros and cons, and see if debt consolidation can put you in better financial shape.
Consider filing for bankruptcy. A Chapter 13 or 7 bankruptcy is going to leave a bad mark on your credit. Your credit is probably already terrible, if you can’t pay your bills and are missing payments. Filing for bankruptcy lets you reduce debt and financially recover.
If you own a home or land and have built up equity, you may qualify to take out a line of credit or home equity loan. These loans (lån) allow you to borrow against the equity of your home giving you instant access to cash to pay off your outstanding debts.
Debt consolidation may not be the most exciting topic of conversation, but it certainly can do a lot for your financial health. Follow the tips from this article and plan your consolidation carefully. You should end up in a more comfortable position, with less interest to pay and more flexible terms.