Reduce Debt – How To Prevent Bankruptcy By Reducing And Consolidating Your Debt
You can prevent bankruptcy by consolidating your debt with the help of a loan or debt consolidation agency to reduce your monthly payments and quickly pay off your liability. But before signing final paperwork, you should develop a financial plan and research your options.
Goal Of Consolidation
The goal of consolidation is to lower your monthly payments so you can pay off your debt and avoid bankruptcy. However, consolidation only works if you make it part of a larger financial plan. You have to be committed to reducing your liability and saving for financial emergencies.
Once you have consolidated your loans, it is a good idea to build a financial cushion of six months worth of cash reserves. This ensures that you can pay cash for the inevitable financial emergency and not increase your credit load.
Your next goal should be to make extra payments. The sooner you can pay off your principal the less you will pay in interest payments.
Types Of Debt Consolidation Loans And Programs
The two types of debt consolidation loans are mortgage loans and...
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