Debt has fallen on you like an avalanche. You don’t know where to start digging, and all you can think about is how much more debt you could have coming your way. You never thought you’d be in this mess, but here you are – buried. The good news is that there is a way out of the pile of bills with debt consolidation.
Knowing what to expect when you choose debt consolidation will help you finally put an end to your financial madness.
Making an Appointment
The first thing you should do is research the different debt consolidation companies available.
Just like any other business, each debt consolidation company has its own fees for the work they will do to help you. While you may not want to go with the most inexpensive company, due to reasons we’ll discuss below, getting a good rate is important in starting your road to financial freedom.
Once you find a company, call to make an appointment. Be sure to ask what documents you’ll need to bring.
The First Appointment
At the first appointment, your debt consolidation counselor will look over your income, expenses, and debt. He or she will then calculate all of your debt, and then determine how much per month you can afford to pay on it.
For that figure, your counselor can look into finding a debt consolidation loan, and start calling creditors to discuss settlements.
Before Your Second Appointment
Between your first and second appointment, your counselor will be hard at work calling your creditors to negotiate a settlement. Many lenders will decrease the amount of money you owe them if you close your account and agree to pay the lower amount. This is where having a good counselor will benefit you. One that is experienced in negotiations and well known in the circuit of creditors will have a better chance at getting your debt decreased significantly. Some people can see a decrease in debt up to 20%.
Once the final amount is settled or all debts, your counselor will go to work on finding you a loan that has the lowest interest rate. With a low interest rate, there’s much more chance in you being able to afford the monthly payment.
Your Second Appointment and Beyond
At your second appointment, you’ll find out how much debt you’re responsible for, and the loan that your counselor has found for you. If you agree, you’ll fill out the necessary paperwork.
The next step is to determine how you will make the monthly payments on your debt consolidation loan. Your counselor will help you come up with a budget. You’ll use this budget to the best of your ability, and subsequent appointments will be to make adjustments as necessary.
Once you have a handle on your budget and payments, you will be free to deal with it on your own. If you ever need assistance though, your debt consolidation counselor is only a phone call away.