Debt is something that is easy to accumulate but difficult to get rid of. Dealing with your debt can seem daunting and frustrating, but with a little patience and the advice you can start to get your debt under control.
Talking to Your Creditors
One of the tactics you may use to help bring down your debt is to negotiate directly with your creditors. This can be a good idea, but there are some things you should keep in mind when you talk to your creditors. Always remain calm and pleasant. They will be less likely to take an interest in helping you if you treat them with a less than professional attitude. Stick with the facts when laying out your situation, and try not to lay on too much emotion. If you have had a family crisis that has caused your finances to take a turn for the worse, then let your creditors know that, but keep it within the context of the business conversation. Try to call towards the end of the month because that is a time when creditors are looking to clear their accounts as much as possible and they may be more inclined to listen to a proposition during that time.
Even though it is a business discussion, remind your creditor that you have the option of getting a loan with another creditor and paying off your account if they will not work with you. This is an effective threat because that means years of interest payments that your creditor would be missing out on, and they do not want to give up that revenue so easily.
Prioritizing Your Accounts
The first thing you may wonder as you stare at your pile of credit bills is where you should begin. The first bills you should pull out are the ones with the largest remaining balances. The next criteria for prioritizing your debt is by the minimum payments you need to pay each month. Put the highest minimum payments on top. Next you will want to look at the interest rate you are paying and put the highest interest rates higher up on the priority list. From there you can separate your bills based on how much you pay each month in service charges.
Once you have prioritized your bills you then need to decide if you are going to pay them off yourself or get help from a financial lender. The very first thing you should try is to get a personal loan with a low interest rate that you can use to consolidate your loans. If you are able to get a loan that covers all of the remaining principle balances on your accounts, and has an interest rate lower than your lowest credit account rate, then consider consolidating under that loan. If you are unable to get a loan due to bad credit then negotiate with your creditors to get them to lower your interest rate, your interest obligation, or agree to close out your account for a lower payoff amount. All of these will have an effect on your credit score, but at the same time these are also the first steps to repairing your credit in the long run. If a personal loan is not a possibility and your creditors will not negotiate, then it would be time to talk to a financial consolidation company about getting your debt under control.
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