5 Tips for Discovering the Best Debt Consolidation for Your Needs

Consumers seek new ways of consolidating and paying off debts. When debts aren’t managed properly, the individual faces late charges and additional finance fees. Many consumers each year face foreclosure and repossessions due to late payments and job loss. Better management of debts starts with the right consolidation method. Individuals who need help now review 5 tips for discovering the best debt consolidation for their needs.

1. Determine What the Consumer Can Afford

Determining what the consumer can afford each month helps them define what debt consolidation method for them. Debt consolidation loans are a great way to settle several debts at once. However, the consumer must qualify for the loans based on credit scores. Traditional lenders review the consumer’s income-to-debt ratio to establish affordability. To review options and requirements for debt consolidation loans visit for more details now.

2. Is the Consumer Eligible for Bankruptcy?

Reviewing eligibility requirements for bankruptcy shows the consumer is chapter 13 or 7 bankruptcy is right for the consumer. Bankruptcy isn’t a traditional debt consolidation method, but consumers who are facing the direst circumstances might find a better solution. Chapter 13 gives the claimants a chance to reorganize their payment structure and lower the balance of some debts in the process. Chapter 7 allows the consumer to sell assets to pay the debts off entirely.

3. Does the Consumer Need to Lower Monthly Payments?

Reviewing the consumer’s monthly payments and credit define if a debt management solution or a credit card transfer is a better choice. Consumers with bad credit need help from professionals, and a debt management plan gives the individual access to a professional who can negotiate for lower monthly payments.

On the other hand, a credit card transfer is a great choice for consumers who have good credit. Transferring the balance to a low-interest credit card reduces the total amount of the debt. The individual avoids higher than average interest rates as soon as the balance is transferred.

4. Does the Individual Have Equity in Their Home?

Calculating how much home equity the individual has defines if it’s possible to get a home equity loan or a home equity line of credit. Each of the products is helpful for consolidating and paying off debts quickly. Homeowners get a home equity loan for a one lump sum payment, and home equity lines of credit are helpful when borrowing a little money over a longer period.

5. Does the Consumer Have a Whole Life Insurance Policy?

Reviewing the current value of a whole life insurance policy helps the consumer determine if there is enough value built up to get a loan. The policies provide a great option for borrowing money from the policyholder themselves and paying it back over time. Policyholders who start the policies earlier in life gain access to a larger amount of money when it’s needed. The products are helpful when settling and consolidating debts. Consumers who have one monthly payment won’t face financial hardships or suffer serious credit damage.

Consumers review options for consolidating debts and finding better ways to manage the accounts. Debt consolidation efforts limit the payments to one monthly payment. Debt consolidation loans and management plans present exceptional choices for managing debts and getting a lower than average balance. Consumers who review each option more thoroughly find the best solution for their individualized needs.

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