| Can you get free credit card consolidation? Yes of course you can, you just need to know where to look. Most people think of taking out a personal loan when you mention the word consolidation but this is only one option available to you. If you have good credit and can qualify for an unsecured loan at a low rate of interest, this may be the answer to your prayers.
But avoid debt consolidation loans secured by your property. In the current economy we need to protect ourselves and not our creditors. A secured loan only gives them stronger protection and makes it easier for them to collect their money. Statistically speaking, it won't do anything for you, as the majority of credit card debtors who take out secured personal loans end up owing more money than they did in the first place.
So how do you get a free service? First do not use the paid services of a debt management company. That advice alone will save you a lot of cash.
You will need to prepare a full breakdown of your current financial situation including your income, your expenditure and details of all your debt. When listing your creditors, make a note of the balance you owe to them, the interest rate you are paying and the amount of your required monthly payment. In your financial statement you should make a list of your assets as well. Do you have any savings? If yes, keep at least 3 months of the house payment, food, and utilities for emergencies in the account and then use the balance to pay down your highest charging credit card. I guarantee you that you do not earn as much interest as you are paying on your debts!
Go through your finances with an eagle eye and find extra money to repay your debts. Can you do overtime or extra hours at work? Are you due a tax refund? Do you really need to eat pizza every night? Can you cut going out to one night rather than three? Bring your lunch to work, read the newspaper online, cut those Starbucks coffees etc. You will be amazed where you could make savings if you really wanted to and this extra money will go towards paying off the debt costing you the most money.
Now look at your list of creditors and one by one contact them and ask if they would be willing to extend your facility on a very good interest rate in order to get more of your business. What? I hear you shouting from here. I am not suggesting you get into more debt. What you should be doing is moving your credit card debt to the lowest interest rate you can get. This will reduce the amount of your monthly payment that is paying interest and therefore increase the rate at which you reduce the monies outstanding.
Your credit companies may not offer you anything but it doesn't hurt to ask and it is free credit card consolidation. Just be sure to close any accounts you are able to transfer and cut those cards up! |