Debt consolidation refers to the process of taking out one large, singular loan to pay off all your existing debt at a single, steady interest rate. For many people in significant amounts of debt, consolidation can be a great option for getting debts paid off in a reasonable time frame while also saving money on interest down the road. Before you get involved in just any debt consolidation program, however, there are some common mistakes you'll want to be aware of and avoid at all costs.
Not Knowing Your Credit Score
Before you even begin applying for debt consolidation programs, it's a good idea to know where you stand when it comes to your credit. After all, you aren't likely to get approved for a large debt consolidation loan without having at least a decent credit score. Take time to review the most recent copy of your credit report, and be sure to dispute any errors or mistakes that may be impacting your score so you can be in the best shape possible before applying for a debt consolidation program.
Failing to Consider Alternatives
While debt consolidation programs are a great choice for many, they're not a one-size-fits-all solution. Depending on where you stand with your debt, it's possible that a debt forgiveness program or even filing for bankruptcy may make more sense for you in the long run. Don't hesitate to speak with a financial advisor if you're not sure.
Going at It Alone
Should you decide to move forward with a debt consolidation program, don't make the mistake of trying to navigate the process alone. Working with an experienced debt consolidation attorney can be one of the best choices you make to ensure that the program you're choosing truly works for you and will help you achieve both your short- and long-term financial goals.
Falling for a Scam
Last but not least, while there are plenty of perfectly legitimate debt consolidation programs out there, keep in mind that there are also scams around every corner. Always take the time to carefully research a debt consolidation program and lender before you give them any of your information. If you have an attorney on your side, he or she should be able to steer you in the right direction here as well.
Overall, debt consolidation can be an excellent way to get back on your feet and pay off debt. Just be sure to avoid these common mistakes!
To learn more, talk to an attorney like James Alan Poe, P.A.Share