Debt Consolidation Tips

Overcoming debt can seem like a daunting task. Where do you begin? What's the first step? Without trustworthy information, the process can be overwhelming and confusing. But with help, any financial situation can be turned around. These helpful tips may assist you to understand how to consolidate your debt—an important first step to regaining financial control:

Make sure you understand debt consolidation

If you consolidate debt, your debt will not go away. Think of it as a first step on the path to getting control back over your finances. Debt consolidation is a way of making your debt more manageable by helping you to repay most of your creditors immediately.

Take advantage of what debt consolidation loans offer

It’s a fresh start on the way to better management of your finances. It offers you the ability to stop juggling multiple high rate credit cards or other loans, and get your payments under control.

Feel like you're never going to be able to get out of debt? Is much of your credit card payment going to finance charges and interest, instead of towards the principal?

Debt consolidation potentially allows you to combine high rate credit card debts and loans into one easy, convenient monthly payment. Spend less time worrying about which bill to pay, and more time taking care of yourself and your family.

Make your money work for you

Some debt is better than others. The interest on your home loan is usually tax deductible and typically at a lower interest rate than a credit card. Why pay high interest rates to your credit card company when you could potentially reduce your total monthly payments and interest rates, and possibly get a tax write-off? (Consult your tax advisor for more information on the deductibility home loan interest paid.)

Take advantage of the available equity in your home

You could have hidden cash in your home in the form of home equity. The more your home has increased in value and the less you owe on your mortgage, the more equity you have. You may be able to tap into this reserve to help you consolidate your debt.

Research all of your options to consolidate debt

Debt consolidation can be confusing, and there are many options to consider. Countrywide's online guide to debt consolidation can help guide you through this process.

If you have any questions, don't hesitate to call one of Countrywide’s debt consolidation specialists at 1-800-909-8217. Remember, our consultants are trained not to recommend a debt consolidation loan unless we know we can help you meet your needs.

Rebuild your credit

Debt consolidation can be a good first step to rebuilding less than perfect credit. However, it’s not the only step. After consolidating your debt, you need to keep working on raising your credit score by following good credit habits. Read more on rebuilding your credit.

Stay out of credit card debt

Once you've paid off your high-rate credit cards with a debt consolidation loan, make sure not to over-spend. Now that you're back in control, you want to stay there. Develop a budget and stick to it.

Need more information about debt consolidation loans? Countrywide’s Home Loan Consultants are here to help answer any questions you may have. Call 1-800-909-8217 to get a FREE, no obligation consultation.