Debt Consolidation Advice: How to Pay Off Debt Writing One Check Per Month

[Apr 17, 2009.]

 

There’s very little in life as depressing as a stack of bills assaulting your mailbox each month. But with just a little bit of fiscal maneuvering, borrowers can use debt consolidation to combine outstanding balances into one monthly payment. Here’s a run-down of borrowing trends, how to pay off debt and how to manage a healthy financial lifestyle.

Borrowing in 2009: Fewer Choices, Steeper Costs
The Debt City blog paints a bleak picture for potential borrowers in the New Year. The credit crunch has lenders on edge--and tightening the purse strings on several financing vehicles. In an effort to reverse the liberal lending on the past decade, banks will begin taking a much harder look into financial histories and a much tougher stance towards those who don’t meet expectations.

The bottom line? Fewer credit card options, higher costs and smaller credit lines. But perhaps those are good things, given current recession. Perhaps thoughts should be turning from borrowing and spending to debt consolidation and balance reckoning.

Pay Off Debt: Getting It All Together
Debt consolidation describes the process of combining several different accounts into one. Typically, lenders that consolidate debt will do so for a lower rate than any of the other accounts. Plus, having one monthly payment simplifies a complex financial situation considerably. Bankrate.com offers a comprehensive list of debt consolidation options. The top three include:
1. Credit Card Transfers. Compare rates, take advantage of a low introductory offer or lock in a fixed rate for the life of the new loan--several options to choose from here
2. Home Equity Loan. For most homeowners, equity is the single largest asset they own--and low repayment terms can be a key benefit when leveraging this asset
3. Retirement Investments. Proceed with caution--the IRS can assess stiff penalties for money withdrawn from accounts allotted for retirement

Grow Fiscally Strong: Live on Less
In a review of the book Debt Cures They Don’t Want You to Know About, The Adventorous Writer blogger Laurie Pawlik-Kienlen reveals some timely advice on how to remain financially healthy--even in a recession. She encourages individuals to understand debts and assets, create a spending plan and stick to it, and get debt settlement help if the situation warrants.

Declaring Chapters 7 or 11 Bankruptcy, despite being a popular option, should remain a last resort. It has become more expensive to do so and the resulting credit damage lasts for years.

 

About Author:

Kelly Richardson is a freelance writer, marcomm consultant and digital entrepreneur. He’s written content for Fortune 500s Google, Yahoo!, Microsoft and Wells Fargo. Find out more about him at kellyrichardsoncopywriting.com.