How to Finance & Consolidate Debt

Financing and consolidating debt are two techniques to aid consumers in their eventual goal of debt elimination. The simple solution is that a person or company must re-engineer their budget to spend less than they earn, and in time, debt will be consolidated and eliminated. If consolidating debts through a company, it is important to understand fees and how the service works.

Instructions

1

Analyze your budget. Eliminate non-essentials such as going out for dinner, new clothes and entertainment. If you can't cut expenses, you need to increase your income. You must get a raise or look for another job. Financing your debt means creating additional income for you to pay your debt off. Loans or bankruptcy are temporary solutions to the underlying problem of poor money management.

2

Begin cutting costs with small steps. Simply cutting out an expense such as eating out, may save you hundreds of dollars per month. This money can then be used to pay off your debt quicker.

3

Consolidate your debts by yourself. Debt consolidation companies use the same techniques any person can, only they will charge you for it. Call your banks and credit card companies to see if there is a way they can put all your debts under one payment. For example, if you have a few credit cards, a personal loan and a home loan through one bank, they may be able to accept one payment for all the services.

4

Use automatic payments to pay off your debt faster. If you have a few credit cards, see if you can set up automatic bill payment for all of them (more than the monthly minimum) directly from your paycheck.

5

Avoid financing debt with further loans. Many people who use a debt consolidation-company and get a new credit card or personal loan will have to do so again. They are still not managing their money correctly. To successfully finance your debt, you must not add to your debt.

6

Pay your bills immediately when they arrive. Do it before breakfast or before anything else you consider a priority. Missed or late payments are a large source of fees and push consumers even further into debt. Making a ridged schedule to pay off your loans is a sure-fire way to finance your debts to elimination.