Consolidate Debts
Though not an ideal solution, debt consolidation can provide some immediate relief from high-interest loans and debts. Choose consolidation loans carefully, and consult professionals when necessary.
Instructions
1. List your debts on paper. Include credit cards, mortgages, car loans and other personal debts.
2. Write down the balance, interest rate and monthly payment for each debt.
3. Determine how much you will pay for each debt at the completion of the loan. For instance, you may pay $40,000 for your car at the end of 15 years, or you may pay $15,000 for items on a credit card if you pay the minimum for 30 years. Consult a financial adviser if necessary.
4. Consider getting a debt consolidation loan as a second mortgage. This will give you some immediate debt relief, but loan fees will be tacked on. Choose a reputable company with reasonable rates.
5. Think about refinancing your original mortgage. Be aware of how much (if any) equity will be left in your home. Will this thwart your plans for the future?
6. Consider transferring credit card balances to one card. Check the maximums on your cards, and choose one with a low APR. Make sure the APR is not higher for balance transfers.
7. Consider borrowing money from a trusted family member. Pay off your debts, and pay the family member a predetermined amount faithfully each month. Determine what interest will be paid, and put the terms of the loan in writing.
8. Consider contacting a nonprofit service like American Consumer Credit Counseling. It can negotiate to lower your payments and arrange for you to pay your bills by writing just one check to the agency each month.
