What can business debt consolidation do for you? If you have multiple debts, it can be the answer you have begged for. It can help you get out from underneath your debt and start to make it smaller. How can it be used? This article will show you what it takes to succeed.
Before considering business debt consolidation, check your credit report first and foremost. Try identifying which financial practices caused you to end up in debt. Use your credit report to see who you owe and how much you owe them. You cannot rebuild your finances if you aren’t aware of this.
Make sure you hire a reputable business debt consolidation agency to help you manage your debt restructuring. Although you will find many companies offering to help you, few are really in it to benefit the consumer. Check first with government sponsored agencies that offer free credit counseling and will then refer you to a trusted debt consolidation service.
Use bankruptcy as a negotiation tool. Creditors would rather get some of their money back than get nothing at all. Let them know that if your debt cannot be reduced, you will probably be forced to file bankruptcy. This can spur the creditor to resort to a more satisfactory compromise that reduces the debt owed.
If you own your home, consider taking out a home equity loan. Since the interest on these loans is tax-deductible, you can save money in multiple ways. Provided you are able to get a good interest rate, this is a smart way to consolidate your business debt into one monthly payment.
Try keeping and applying for those introductory 0% interest credit card offers in the mail. Consider the amount of interest that you may save via consolidating all that debt onto your new card. You must use caution, though. Keep to a plan that lets you pay off the transferred debt during your low interest period. Don’t miss payments or you will make your interest rates go up drastically. Don’t open multiple cards and keep one of your old ones with a small balance on it.
Look into any credit card offers you get in the mail; it might be an excellent way of consolidating any business debts you have. This can save on interest and leave you with just one payment. Once your debts are consolidated onto a low interest card, make sure you pay it all off before the interest rate changes to a much higher one.
Understand the company’s rates and fees and know what type of rates are reasonable. A set-up fee in excess of a $100 should be cause for concern, for example. Similarly, a monthly fee higher than $50 is unreasonable. Call around to several different companies before settling on any one in particular.
An option to help pay off those credit cards with high interest rates in business debt by taking some money out of your 401k. Do not consider this unless you know for sure you can pay back the amount withdrawn. You must pay penalty and tax if you can’t.
If you’ve got a very spotty credit history, understand that the loan rates you’ll get from any bank will be relatively poor. You may be denied a loan, or the interest rate that’s offered may be extremely high, 20% or more. You may need to look for professional help if this is the case.
Success comes to those who take the time to learn all they can before tackling a project. When it comes to business debt consolidation, you have read this article from top to bottom and understand what you need to know. All that is left is making it happen, so find your help today.