One of the most common methods used for debt relief is consolidation.
Debt consolidation involves taking out a single loan in order to pay off multiple loans.
Usually this is done in order to obtain a fixed interest rate, lower your current interest rate, or for the simplicity of paying off one loan at a time instead of several.
Many types of debt are covered in consolidation, including, but not limited to, car loans, student loans, personal debt, and most commonly credit cards.
If you're thinking about a debt relief solution, and have decided that consolidation might be right for you, then please take the following tips into consideration.
Tip #1 Know your exact situation It would be impossible to get debt help without understanding your financial situation inside and out.
Know who you owe money to, how much you owe them, and your total debt amount.
Tip #2 Never settle on the first consolidation company you find Just like buying a car, or a new piece of furniture, you should never settle for the first thing you find.
Ask friends and family for info about a company they may have used.
What type and how much are the fees? How long has the company been in business? Do your research and find a company you can trust.
You could even check with a consumer protection agency in your area if you cannot find anything on your own.
The internet can also save you a lot of time in finding the right company for your debt solution needs.
Tip #3 Don't sign anything without reading the fine print Any contract you sign with a debt consolidation company is sure to have many conditions and lots of fine print.
If you go at it alone you could be in a world of trouble.
You should not be afraid to ask lots of questions.
You need to be 100% sure you know what you're signing.
If you could hire a lawyer or get a legal consultation that would be great.
However, hiring a lawyer is probably out of the question for most people with debt issues.
What you can do though, is read the contract thoroughly and read it several times.
You could have a friend or family member look it over as well.
Tip #4 Start a savings account Once you have secured a debt consolidation loan and lowered your monthly spending, then it's time to start saving.
Open a savings account and start putting the extra money to good use.
That way instead of using credit to make future purchases, you can start paying with cash and prevent the debt from piling up again.
Sooner or later even large purchases, such as a car or HDTV, become possible without taking out another loan.