If you are looking into debt consolidation, you have probably already experienced a few bumps in the financial road.
You may even be feeling a little desperate to get your financial situation under control today, if not sooner.
If you find yourself ready to call the first number that you see advertised on television offering to take care of your debt for you, get a hold of yourself.
Even though it is easy to feel pressured into grabbing the first company that promises you freedom from your debt, it is important to keep your head and do your homework.
Talk to Your Credit Card Company If you are struggling with debt, the first place that you need to go is to the company to whom you owe money.
If it is a credit card company, you will want to call them first.
Many credit card companies do not want the hassle or expense of trying to retrieve money that is owed to them and have not received payment for six months.
They may be happy to negotiate a lower interest rate and they may even be willing to reduce the amount you owe if they are assured they will receive the full amount to which they agree.
Talk to Your Mortgage Lender As with the credit card companies, your lender may be willing to negotiate with you.
You may also qualify for a government-sponsored program called Making Home Affordable.
You will need to fill out their paperwork and supply the documentation they need in a timely manner.
If you qualify, they will modify your loan for a trial period.
During this period, you must pay the full amount they ask for on time for three months.
This will then qualify you for a permanent loan modification.
Making Home Affordable also offers counseling and warns if you are being asked to pay money upfront for financial counseling, it is probably a scam that you need to avoid.
Refinance Your Mortgage Talk to your lender and see if you are able to refinance your current mortgage for a lower interest rate.
If you have some equity in your home, you may also be able to take additional cash over and above the amount you owe for your mortgage to payoff your outstanding bills.
Home Equity Loan If you do have some equity in your home, applying for a home equity loan may be another possibility.
The advantage of the home equity loan is that they usually offer a low interest rate and the payments can be equally as low and stretched out for fifteen to twenty years.
If your phone is ringing off of the hook with calls from creditors, it is time to get your finances under control.
Before you jump on any "free yourself from debt" bandwagon, try negotiating with your creditor and see if you can improve your situation on your own before it gets any worse.