Debt consolidation undoubtedly happens to be one of the simplest ways by which you could manage to simplify your debt payments. Not just that, debt consolidation also happens to be an excellent way by which you can actually get rid of your debts, both secured as well as unsecured and you can also consolidate them with the help of a home equity or personal loan, or at best through a debt consolidation company.
Qualifying for debt consolidation
Now that you’re looking for ways to consolidate your debts, then it’s not just about debt consolidation that you’ve got to think of. It’s also important for you to determine whether or not you can qualify for a debt consolidation program in the first place. Take a look at the following steps and make sure that you qualify for debt consolidation.
1. Enlist all your debts: The very first thing you should do is make a list of all your debts. You should always divide this list into secured and unsecured. Secured debts obviously mean the ones guaranteed by property and unsecured debts happen to be those that are obtained without collateral.
2. Decide on the debts: The next thing you’ve got to do is decide on which debts you’re interested in consolidating. This is because it might so happen that you’re been approved for a certain amount only and hence you should have to choose the debts. The idea is to consolidate or get rid of those debts that have the highest balances or the highest rates of interest involved. Also, there are debt management companies that require you to have a certain balance so that you can qualify for their consolidation program.
3. Check on your credit reports: After that it’s time for you to pull out your credit reports and run a thorough check. It’s imperative that you know what’s there on your credit report before you actually apply for a loan.
4. Provide the necessary documents: It’s also essential that you have ready and manage to provide all the necessary documents like proof of income and a copy of your budget. This is because regular income is essential for qualifying. In fact, most lenders would like to see a copy of your budget as well.
Keep in mind the 4 criteria discussed above and you should be able to qualify for debt consolidation if you act accordingly and efficiently.