|
|
| *Ostroff, Fair and Company>>>Personal Finance |
My husband and I are about 22,000 dollars in debt and we are 21, is debt consolidation a good idea.? |
We pay about 6 different companies $ 50 each a month and it come sout of our bank account at different times and it is just frustarating. The reason we are so high in debt is because 10,000 of it is my student loans.. At $50.00 a month, some debts will NEVER be paid off. If you go to professional debt consolidators, they will consolidate your debt into one loan (which you can do on your own) and then give you a lesson on budgeting (which is the same one your parents gave you about but you wouldn鈥檛 listen to). Don鈥檛 forget, your student loan is YOUR loan. It鈥檚 nice that your husband accepts it as HIS loan too. talk to Mack financial group........... only go with someone reputable so many just cause you to lose more money .....be careful.......... we took a loan from our bank 1% (paid off our credit cards then paid our bank each month until it was paid off. but i know thats hard if you have no colateral It depends on how you do it.. Using some debt consolidation companies actually will lower your credit score, and they collect their fee out of your payment. If you can qualify for a personal loan, or own a house and can get a home equity loan, it may work for you. Actually, I disagree with everyone here. I would recommend against debt consolidation because it could be a whole other ball of issues. If you do some research on debt consolidation companies you'll find that it's difficult to find a good company who won't mess up your credit score in the long run. Typically how it works is that the d.c. company makes payment arrangements with the debt holders. You submit your payment to d.c. and they dole out payments. Sometimes, the d.c. company doesn't make the payments on time etc. and those blips eventually show up on your credit report. Debt consolidation, as tempting as it may seem, is not a magic fix-all. If it's too good to be true, then it probably is. Rather, you'll save yourself time, money, and heartache but taking care of it yourself. With some preparation and dedication, you can whittle away your debt. 1. Make a list of all your debt balances, corresponding APR to each, etc. 2. Create a monthly budget and a system to record your monthly expenses. Find areas where you can save money to put towards your debt. 2. There are two tactics here. For the first, you pay the minimum on all cards except for the one with highest APR regardless. Say you found a way to save another $50/month by skipping meals/coffee out while working out your budget. You would then apply that $50 along with the minimum payment for the high APR card. Once that card is paid off, you take the extra $50 plus the minimum amount and then apply all of that along with the minimum to the next card and pay it off. The other idea is to start with the card that has the lowest balance regardless of APR. You follow the same tactic. The difference between the two approaches is what motivates you to make the extra payments. It's a snowball effect so that you pay more and more principal and less and less interest. 3. In terms of the $10k in student loans. You can ask for a deferrment from the loan company just to give you some breathing room in payments. 4. However, none of this will work unless you stop using your credit cards. You must live within your means. I can attest that this system works. My husband and I were $33k in credit card debt with $50k in student loans. We had no savings and no investments. When we finally sat down and said that something had to be done, we wiped out the credit card debt in one year. It takes sacrifice and dedication. Now, three years later, I can proudly say that we own a house, two cars paid off in full, no credit card debt and are building a decent retirement portfolio. The way we did it was to cut every extraneous expense and throw every dime we had at the credit card debt no matter the temptation to spend it somewhere else. We are still paying off student loans but at 1.65%, and tax deductible interest, it's a much better situation and it will be paid off in five years. You are still very young so you have that to your advantage and have time on your side to build a stable, secure financial future. My advice to you is to not squander this time. Learn about financial management and make it work for you. Don't be a slave to debt. do not do debt consolidation...it goes on your credit report...instead, roll up some of your debt into a balance transfer credit card at a good rate...6 bills can be a hassle...student loan is a good debt, though, as long as you got your degree because of it...student loand are also at good rates, so pay it off slowly but bang out the other ones ive been there and done just that |
| Tags |
| Small Business Renting & Real Estate Personal Finance Investing Insurance |
Finance Categories--Copyright/IP Policy--Contact Webmaster |