5 things to do after You’re Approved for a Debt Consolidation Loan
Getting approved for a debt consolidation loan is a major step towards getting in control of your debts. After you’ve gone through the process of counseling and have your new loan, though, you’ll want to keep the momentum going by taking a few more steps to build your wealth and really become financially independent. If you don’t know where to begin, try these suggestions.
What to do after Debt Consolidation Loan Approval
- Establish a small emergency fund. If you’ve never used a savings account before, now is the time to start. Odds are good that you’ll be saving some money every month with your new debt consolidation loan. While it can be tempting to use this money for more spending, a better idea is to put it aside for the next time you need to repair your car or travel out of town unexpectedly. Doing so will prevent the need to run up more debt in the future.
- Start fixing your credit score. Since the debt consolidation loan will pay off many of your old accounts, including those you have missed payments on, you’ll probably start to see your credit score rise in the coming months. Keep this going by making it a point to pay all of your other bills on time.
- Get organized. Develop a bill tracking system (read an article on how to do this here), file important paperwork such as tax returns and bank statements, and carefully track what is in your checking account. This will lower your stress, improve your credit score, and keep you out of debt in the future.
- Start saving for retirement. Now that you’re saving some money every month with your new loan, you might want to revisit the retirement plan that is offered to you at work. If your employer matches what you contribute, start working towards getting your own contributions high enough to get this full match. Even contributing just 1% of your paycheck will give you several thousand dollars for when you have to stop working.
- Save towards a major goal. Once you get in charge of your spending and income, you can start planning for events that are still a few years away. This is a good time to start planning to buy a house or have a baby.