How to Consolidate Debt
Most people have felt overwhelmed by debt at some point in their lives. With credit card companies calling about past due accounts, and loan companies calling to consolidate your loans or mortgage companies urging you to refinance, debt can be a tiring process. If you are at your wits end, and confused about how to consolidate smaller bills into one larger more manageable bill, read more. This article will help you regain control over your finances and your life for once and for all.
- Difficulty:
- Moderate
Instructions
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How to Consolidate Debt
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1
List all of your debts, according to balance, minimum due date, amount due, and interest rate. Next, list all of your assests, including take home pay, alimony payments, and public assistance benefits. Compare the two lists. Now, consider how you can relieve a large chunk of the debt.
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2
Set a budget that you can reasonably follow. Set aside monies for living expenses, gas and electric, mortgage, insurance, food, transportation to and from work, clothing, and groceries. Whatever is left over goes towards your bills. If you have a house with a mortgage, consider refinancing the property. Refinancing your home could save you money in the long run.
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3
Refinance your property and have the lender send the check directly to the credit card company you wish to pay off.
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4
Cut your paid credit cards in half and throw them away. Call the credit card company to close the account.
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5
Use the disposable income from the second mortgage to pay the lowest credit card balance you have. As the credit card balance is paid in full, attack the next lowest credit card balance. Take all the money that you were applying to card A and apply it toward card B. Keep the process going until all your outstanding debt is paid off .
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1
Tips & Warnings
Create a budget or plan and follow it. If you feel tempted to use the credit card, remember how difficult it is to live pay check to pay check.
Because you have paid off a credit card does not mean that you can now reuse it. DO NOT REUSE PAID CREDIT CARDS THAT DO NOT HAVE A BALANCE. INSTEAD, CLOSE THE CREDIT CARD. Do not let temptation draw you back to the position you were just in.
