Should I talk to a debt counselor?
In a recent article we talked about how a debt counselor can help someone when they first apply for a debt consolidation loan. Figuring out whether to pick up the phone and ask for help from one of these professionals, however, is a big decision. While there isn’t any way to know that a person needs a debt consolidation loan, there are questions that you should ask yourself in order to figure out whether or not you should make an appointment with a debt counselor.
Questions to ask Yourself before seeing a Debt Counselor
1. Can I afford my minimum monthly debt payments? In order to answer this question, start by looking at your budget (or making one if you haven’t already). After you include all of your necessary monthly expenses, determine if there is enough money left over to pay the minimum payments on all of your debt. If there isn’t, talk with a debt counselor immediately. If you can’t pay the minimum payments on your debt, you have to make drastic changes in order to not fall behind. A counselor can help you to reorder your budget or find a debt consolidation loan that can lower your monthly payments.
2. How long will it take you to pay off your unsecured debt? Unsecured debt includes payday loans and credit cards. It typically includes every loan that isn’t directly tied to an asset that the bank can take back if you don’t meet your loan payments. Looking at your budget now, how long do you think it will take you to pay off everything. If you don’t know the answer, a debt counselor can help you. If the answer is longer than three years, you will want to ask for help. There are ways to get your debt paid off faster.
3. Has your credit score gone down in the past year? A credit score that is falling is a sign that you are struggling with paying off your debts. It’s a good idea to address this problem before it becomes so bad that you can’t get a loan or it starts to effect your job.
Working with a debt counselor is relatively easy, and many people are able to use the advice and help they get to improve their financial situation. Meeting can be in person or over the phone.