Can You Consolidate Your Debt Yourself?
Financial research has shown that most people own at least 8 credit
cards and owe up to $10,000 – and most are in the same boat as you. No
matter how much they pay towards the bill, they seem to remain stagnant.
This is due to high interest rates(avg. 18%-25%) which cause consumer
debt to rise at a rate of 5% a year.
As the amount of consumer debt rises, so does the popularity of debt consolidation companies. While these companies actually do provide helpful, efficient ways to easily eliminate debt, they don't do it without charging for their services. Although these fees are quite reasonable, you may have questions as to whether this route will suit you, or whether you may be able to afford them.
By dedicating yourself to consolidating your debt, you can avoid paying
debt consolidation fees. The following steps can guide you to do just
that. If you are too busy to accomplish this, then perhaps going with a
debt consolidation company is more ideal.
The First Step: Negotiation With Your Creditors
Negotiating with your creditors personally can be intimidating. You will need to negotiate the lowest interest rate, as well as try to reduce late fees. Once you accomplish this, do your best to live frugally – establishing a budget for yourself, and following it accordingly.
Using Online Resources and Aids To Do-It-Yourself
It may not be easy for you to find all the information you need, but with diligent research, you can find do-it-yourself websites which can point you in the right direction. Keep in mind, some of these websites charge a fee for research, so if you cannot afford it, it may be better to just let a company handle it. Here are some online resources to look for:
Creditors Database
These are lists of creditors and collection agencies which provide you
with everything you need to know. Contact information, as well as debt
negotiating policies. Becoming familiar with your creditors' polices
will aid you in receiving settlements.
Sample Debt Consolidation Letters
These software programs or printed forms, are templates for different situations to contact and negotiate with creditors. These form letters are perfect if you do not like to write, or are just intimidated by the thought. These templates are inexpensive, and can even be found in office supply stores.
Debt Calculator
These can be found for free online. Simply use these to calculate payments, and help determine your budget.
While doing it yourself may save you some money, it may also lengthen the time for you to become debt free. Being disciplined, whether doing it yourself or letting a company do it for you, is the crucial aspect of this process. Stay dedicated to your budget and your life in debt will be over sooner, rather than later.