Consolidating your loans might be a foreign concept for some, but for many people it’s the first step toward a financially stable future. If you’ve never heard of debt consolidation, or are merely trying to figure out how to get your debts under control, here are a few tips on how to start consolidating the right way.
1 – Get a Credit Report
First, stop whatever it is that you’re doing and get a credit report. It’s quick, easy, and more importantly than that, it’s free. There are plenty of companies and even free websites that can help you out with this, and if you’re still feeling wary, definitely consult with your bank or even a financial advisor.
One of the most important things to remember when it comes to getting a credit report is avoiding scams. The phrase “Get Your Free Credit Score Now!” is pretty rampant these days, but before you sign the dotted line, make sure you read the fine print and prevent expensive monthly subscriptions from running up a bill.
2 – Review Your Options
Once you have your credit report, you can start reviewing the different options that are available to you. Depending on what your financial situation is, debt consolidation may be your best bet, but it’s important to see what else is out there before you pull the trigger on anything.
Fortunately for you, countless consumer reviews are available that can help guide your decision making throughout this process. Although it’s important not to treat reviews as gospel, they’re definitely a handy way to get some insight straight from the people.
3 – Set a Deadline
After taking the time to review your options and check out some reviews, if debt consolidation is what you decide on, it’s time to prepare yourself for taking out the loan. It can be a daunting task, seeing the total amount of debt you owe in a single sum, but if you’ve planned ahead, eventually the uneasiness will subside.
At this point of the process, the most important thing you can do is set a payment deadline for yourself and stick to it. Even though debt consolidation affords you a cheaper interest rate, it’s still up to you to pay in full and on time. And if you have a problem sticking to a routine, buy a calendar or set up alerts in your phone to keep yourself organized.
4 – Control your Spending
After all is said and done, and you’ve started paying off your consolidation loan, it’s time to get control of your spending. Face it, that’s why you had to consolidate your debts in the first place, but once you’ve taken the loan out, it’s a perfect opportunity to practice better financial judgment.
This isn’t to say stop spending money altogether, rather it’s your chance to finally get your finances under control and make some better decisions for your future. At this point, it’s all up to you! So, don’t screw it up.
If Frank Mccourt had a nickel for every time he wrote about finance, he’d have enough nickels to buy that yacht he’s always wanted.