New York, NY (PRWEB) May 12, 2013
Money Mermaid understands that debt consolidation can be a valid approach to finances if debt is starting to grow out of control. However, it may not be for everyone. An article appearing April 12th on the U.S. News & World Report website stated that 70 percent of those who enter consolidation end up in deeper debt. This is often because of a consumer’s bad habits rather than the company that offered the loan being disreputable. An available credit line can be tempting as a person may think, “well, they took care of my credit cards, I don’t have any more debt, so I can splurge a little bit”. Yet they are failing to recognize that while the individual credit card balances are gone, there is now the consolidated loan.
Money Mermaid recently posted an article about people turning to debt consolidation as a last resort, and the precautions that are needed before proceeding. The article stated that “when collecting cans and bottles, staging constant yard sales, and placing money on the longshot to finish first in the Kentucky Derby yields little to no extra income, some look for a more responsible way to restructure their debts”. While the vast majority of companies out there are reputable, as with any industry there are some who make their living by lying, cheating and stealing. The Money Mermaid blog suggests a list of questions to ask in the initial consultation, and advises conducting some outside research.
Furthermore, if someone does not intend to pay the loan, debt consolidation is not a good idea. When it comes down to it, debt consolidation is basically a glorified credit card. As DebtConsolidation.com points out, each missed payment results in a $15 to $35 late fee. If a payment is not made within 30 days, they could mark the loan holder’s credit report.
Finally, a consumer must also assess if debt consolidation is the right thing for them. Will they be able to fight the urge to use a new zero balance credit card? Do they generally intend to make the payments or is this a way to get the credit card companies off their back? Is this company reputable and have they answered every question satisfactorily? These are questions that need to be asked before signing on the dotted line, because once the document is signed, there is no turning back.
Money Mermaid advises caution when proceeding into debt consolidation. It is not a risk-free proposition, and all questions and concerns should be addressed before proceeding.
About Money Mermaid:
Money Mermaid understands that today’s financial world is a tricky proposition, especially for individuals and families. The website works hard to guide people on the right path to achieve healthy finances.