How To Consolidate My Debt & Become Debt Free In 12 Months
When you’re drowning in debt you would like to know the answer to “how to consolidate my debt?”.
I’m guessing that by successfully consolidating your debt you would also like to become debt free in 12 months or even in 5 years.
When your debt is mounting & you can’t see any way out of it, the best thing to do is to take the first step to becoming debt free by finding out how to consolidate my debt.
5 Ways To Consolidate Your Debt
1. Take Out a Debt Consolidation Loan
One of the most popular ways of consolidating debt is to take out a debt consolidation loan.
The proceeds of the loan would then be used to pay off all your individual debts, leaving you with one larger monthly payment to make, ie your debt consolidation loan repayments.
2. Transfer Smaller Debts Onto Your Credit Card
You could transfer all of your smaller debts to your credit card & make one larger credit card payment every month.
This would save you the hassle of paying off smaller amounts, which would in effect be paid off, leaving you a large debit balance on your credit card to pay off.
3. Don’t Take On Any New Debt
Whichever method you use to consolidate your debt, you must ensure that you don’t take on additional debt.
Giving in to the temptation of extending your credit or taking out new credit cards to get by is often the risk with consolidating your debt yourself.
Debt consolidation is not easy & takes discipline but if you give in to temptation you’ll find that moving debt around or extending your line of credit is never going to see you being able to become debt free in 6 months.
4. Borrow Against a Life Policy To Consolidate Your Debt
If you have a life assurance policy, or similar insurance, you could borrow a lump sum against it and use the proceeds to pay off all your smaller debts & commit to paying pack the funds you borrowed.
The key to the success of this method is discipline & not to use the funds as a “gift”. It’s vitally important to pay back the loan to ensure you don’t fall into the debt trap.
5. Debt Counselling
Undoubtedly the best way to consolidate your debt would be to consolidate it in a way that avoids you from taking on any additional debt.
For most people struggling with ever increasing debt, the best strategy for you would be to embark on a professional debt consolidation plan through an accredited credit debt counseling agency.
By using the services of a professional debt counsellor, your unsecured debt payments are consolidated into one monthly payment to the debt counselling company, which will then ensure that all of your creditors are paid timeously every month.
Furthermore, your credit counsellor will negotiate with your creditors for the lowest possible interest rates & other fees to save you money and allow you to become debt free as quickly as possible.
Just remember that you cannot borrow your way out of debt
3 Questions To Ask Yourself To Become Debt Free
If you’re serious about wanting to become debt free in 6 months or 12 months or 5 years you also need to ask yourself the following questions.
- Should you consolidate your debt?
- Are you serious about making a commitment to paying off your debt?
- Is your monthly unsecured debt less than half of your gross salary?
If you answered yes to all of the above questions you are in a good position to consolidate your debt & become debt free in 6 months.
However, if your debt is insurmountable and you can’t see a way to paying it off within 5 years then you should consider debt counselling.
Furthermore, if your debt situation is causing you stress you should take the first step & consolidate your debt by seeking help from a debt counsellor.
- Don’t leave it too long, act immediately to minimise the damage & allow yourself the best chance possible of getting rid of your debt as quickly as possible.
- If you leave it too long you may end up having to file for bankruptcy which will impact on your ability to get any sort of credit for at least 10 years.
- Declaring yourself bankrupt to become debt free should be seen as a last resort as it will change the quality of your life dramatically.
- Rather take the first step to becoming debt free by engaging with a debt counselling firm like Debt Eraser »
Undoubtedly, the Best Strategy To Become Debt Free Quickly Is To Consolidate Your Debt Through a Professional Debt Counselling Agency