- You are here:
- Home »
- Blog »
- Saving Money & Frugal Living »
- Debt Consolidation – The Pros and Cons
Groups I Am a Part Of
Debt Consolidation – The Pros and Cons
————————————————————————————————————————
Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
————————————————————————————————————————
Click here to enter my free giveaway for 2 copies of H&R Block At Home Premium Edition
The following is a guest post. Enjoy!
Understanding the Debt Consolidation Solution
The Limitations of Debt Consolidation Loans
It may even be that a change of lifestyle can help get your finances back under control more quickly and easily than applying for a debt consolidation loan. If this is the case, then look for a zero interest credit card transfer deal and use the free period to pay down the balance. This will be far cheaper than any new loan can ever be.
How about you all? Have you ever used debt consolidation loans? If your debt was spiraling out of control, what method would you use to combat the problem? Did you ever consider 0% interest credit card balance transfers?
Share your experiences by commenting below!
Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.
- Great article here! One thing I’ve always wondered is if there are any qualifications (such as income level) in order to obtain a debt consolidation loan? Does any one have any experience with this?
- I think that it’s also important to point out that debt consolidation loans are not an “easy way out.” They should only be used if someone is having real trouble making the minimum payments on their credit cards each month, whilst still having enough money to live on.
- For most people, who merely have more debt than they’d like and want to get rid of it, debt consolidation most likely is not the solution. However, what is the solution is to 1) collect your debts, 2) finalize your Debt Free Action Plan, and 3) call your credit card company to get your interest rate reduced.
***Photo courtesy of http://www.flickr.com/photos/exurban/4857586543/sizes/m/in/photostream/
About the Author Jacob A Irwin
Hi folks! My name is Jacob. I am the owner and operator of My Personal Finance Journey. I started this blog in January of 2010 and have enjoyed the journey ever since. Since finishing up graduate school in Virginia in 2014, I have been working in biopharmaceutical development in Colorado. You can read more about me and this site here. Please contact me if you have any questions!
Related Posts
Small Moves You Can Make That Will Add Up to Big Financial Changes
Pros and Cons of Buying Used
When Should You Consider a Reverse Mortgage?
Organize Your Financial Life With This Money Road Map
Popular posts
Session expired
Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.
Hey Jacob,
In response to your thoughts, it is usually not so much about the income level that a person has, but more so about how much income they have left over after their expenses. If they have too much debt, and other expenses, a lender would be reluctant to make the loan simply because they don't want to be the one that gets defaulted on if the borrower can't get things turned around. I usually recommend that my clients first trying lending club or prosper.com if they are looking for a consolidation loan. Right now, it is difficult to get that sort of loan from a traditional bank.
My recent post Taxes on Debt Settlement
Very interesting! Thanks so much for sharing your experience Damon!
My recent post What Would I Do If I Inherited One Million Dollars?
One of the most important points you make here is that, once you choose a debt consolidation option, you have to change your lifestyle. A lot of people who find themselves in serious debt are repeat offenders. You have to learn your lesson and commit to smarter financial decisions for debt consolidation to have the desired effect. Also, it can be helpful to seek out professional assistance from an expert. Speaking with a financial professional might cost a little money, but you could end up with sound advice that could not only help you eliminate debt, but avoid it in the future.
Thanks for sharing that PlanningFinancially! In your opinion, what's the best way to go about changing habits?
My recent post Carnival of Passive Investing 6 – May 2011 Edition With Author Rick Ferri Now Live!
Personally, I find that keeping a spending diary is the best way to gain control over your finances. Like a calorie diary when dieting, hold yourself accountable by noting every little detail. A grande cappuccino here, a car payment there – everything. At the end of the week, see how much of your spending was wasted on items that were wasted impulse buys. Answering to yourself can be great for self discipline!
Great idea! I agree. Keeping track of all spending in a diary is a very effective method!
Great advice. Don't have any experience in this area, but sounds like a solid plan for anyone battling debt problems.
My recent post Auto Insurance Shopping
Thanks for reading Buck!
My recent post Debt Consolidation – The Pros and Cons
Wow this is a great article that is actually easy to understand. I've read dozens of debt consolidation blogs lately (just got divorced) and yours is wonderful. I honestly think I'll work out my issues with the companies directly rather than getting such a high interest, short-term loan.
Thanks for reading Ryan! That's probably a good plan. Like I mentioned in my commentary above, debt consolidation loans should only be used as a “last resort” when other methods are working.
My recent post Debt Consolidation – The Pros and Cons