Debt consolidation can be very useful when you have several credits buy you do not know how to make the payments. It allows you to make all the single payments into one account, with the benefits of lower interest rates and increased payment periods. What happens when your consolidation application is declined?
Here are some other solutions when lenders refuse to give you a debt consolidation loan
You can find someone to co-sign your debt consolidation loan
Sometimes you may not qualify for a debt consolidation plan due to a poor credit core, low income or too much debt. If you do not qualify for a loan, you can look for a friend of a family member who has better income and credit score and ask them to co-sign your debt consolidation loan. The bank then looks at the details of your co-signer, like their salary, credit score and how they handle finances to determine whether they qualify for a loan.
Getting a co-signer may not be as easy as it seems. If you cannot make the payments on time, the responsibility will befall on your co-signer. There is no need to instil this burden on a little girt.
Transfer your debt to your mortgage
With the increase in house prices and mortgage rates, it is common to see people adding their credit debt in to their mortgages. This is a good way to deal with all the mortgage debts when you own your house. If you lack equity in your mortgage payments will not work. You can treat your second loan as another mortgage. A second mortgage will lower the interest rates and hire the help to come and savings
Learn to live on a budget
Living on a budget will help you learn how to use your finance and help you learn how to avoid taking in more debts. The major cause of debt problems is poor money managements. Most people do not make payment plans on their loans and they end up with multiple credits that are unpaid and past dues. If you spend your money as you earn, you will be tempted to buy unnecessary products. In the end, debt will build up and ruin your credit card score and history.
Before you can access you monthly income, calculate the amount of expenditure and commitments to get the disposable amount. If the disposable amount is big, you can make part of the payments
Deal with your debt issue
Many people think that taking a consolidation will clean out the whole mess. Taking many credits at once is not advisable, especially if you do not need them for a financial emergency.
Some people use these credits for luxuries and impulse spending, which is essentially not an investment. Learn how to use your money wisely, especially if it is loaned. If you make enough money, commit your salary to paying the credit accounts to deal with this mess.
Go for a credit counselling programme
A credit counselling programmes is creates for people with low credits and high debts . the mains aim of the programmes is to help you stabilise your financial life. A counsellor will look through your finances and help you identify the issues. They then budget your finances and come up with a debt management plan.