Easier Said Than Done
Debt is a scourge that can take over your life and leave you with essentially nothing in return—nothing but lost time and bitterness. But it’s not a scourge that is totally undefeatable; it just may take a little concerted effort to rebuff. To that end, you need to know how you got where you are, what you owe, and how to get out.
First, focus on how you got where you are. Is the debt you’re responsible for debt you’ve inherited, or debt you’ve sourced? Some debts pass a statute of limitations, and you may not be culpable for them.
Depending on how you became the recipient, different options will be available to you. If you’ve inherited debt from the death of a loved one, or some other factor, interest rates and credit scores may fluctuate.
If you are the cause of your own debt, then how did you do what you’ve done? Were you spending frivolously, or were you responsibly undertaking varying loans for the pursuit of a home, or higher education, or a vehicle, or something of that ilk?
Should the debt you’ve acquired have come to you in a way which doesn’t predicate perpetual increase, you’re in good shape; it’s just you may have to take some time to get yourself dug out of the hole. A student loan or overspending on a credit card are chief examples of this.
The Value Of Consolidation
The next step is determining what you owe. Oftentimes when debt assails individuals, it comes in multiple forms. There’s credit card debt, loans, car payments, home payments—it’s all a veritable maelstrom of expenses. It can be hard to get an idea of what you truly owe without consolidation.
In order to get a good idea of how much you owe varying creditors, you need to collect all your expenses debt-wise into one place. One of the best ways to do this is to source a debt consolidation agency of some stripe.
According to DebtConsolidate.company, one of the largest bbb accredited debt consolidation companies is National Debt Relief; as the site says, this organization: “…began operations in 2009. They help their customers by negotiating settlements with their creditors and also offer non-bankruptcy and consolidation options…”
Now that you know what got you into the mess, and how extensive the mess is, it’s time to dig yourself out. A debt consolidation agency can often help reduce the interest appended to a given loan. This is what makes paying loans and other debts off integral. If you don’t, they increase in cost over time.
To give you some idea, a $1,000 loan at 10% interest compounded monthly becomes $1,100 a month after interest begins to apply. In two months, you’re at $1,210. In three, you’re at $1,331. By the end of a year, your initial loan has more than doubled.
The key to getting out from under the penumbra of interest is to pay more at regular intervals than the interest adds. So if you’ve got a $1,000 loan at 10% interest, you’ve got to pay more than $100 of it off every month. This will gradually shrink the loan, and ensure it doesn’t continue to balloon out of control.
The thing about interest rates is they usually compound on the previously compounded rate, meaning you’re not looking at an additional $100 a month, you’re looking at 10% of the total adjusted debt, which will continue to increase out of control until you get a handle on it.
When you’ve got massive debt, you’re in real trouble; but if you consolidate with the right folks, creditors can be prevailed upon to lower interest rates.