{"id":4697,"date":"2020-11-06T10:07:31","date_gmt":"2020-11-06T10:07:31","guid":{"rendered":"https:\/\/sheknowsfinance.com\/?p=4697"},"modified":"2024-01-03T09:42:10","modified_gmt":"2024-01-03T09:42:10","slug":"3-debt-consolidation-mistakes-to-avoid","status":"publish","type":"post","link":"https:\/\/sheknowsfinance.com\/3-debt-consolidation-mistakes-to-avoid\/","title":{"rendered":"3 debt consolidation mistakes to avoid"},"content":{"rendered":"\n

If you\u2019re drowning in a sea of credit card bills and on a first name basis with debt collectors, you may want to consider securing a debt consolidation loan. With debt consolidation, you take out a new loan to pay off existing payments owed. You\u2019ll save money on interest (these loans typically have lower interest rates than other types of debt) and simplify your bill payments each month. However, if you\u2019re not careful, debt consolidation can backfire.<\/p>\n\n\n\n

Here are 3 debt consolidation mistakes you should avoid:<\/p>\n\n\n\n

1. Not fixing poor spending habits<\/h2>\n\n\n\n

Debt consolidation for bad credit is possible. But first you\u2019ll need to focus on fixing the spending habits that landed you in hot water in the first place. Take a close and honest look at your spending habits. Do you go online shopping when you\u2019re stressed? Take one too many Ubers when you should be relying more on public transit?<\/p>\n\n\n\n

The only way debt consolidation will work is if you limit your credit use and start saving instead of spending. Because you\u2019re taking your various debts and putting them into a new loan, you\u2019re freeing up more of your funds. If you keep spending like it\u2019s going out of style, you\u2019ll wind up in a deeper financial hole.<\/p>\n\n\n\n

2. Not doing your research ahead of time<\/h2>\n\n\n\n

Finding the right debt consolidation loan requires some research. You won\u2019t be doing yourself any favors if you just go with the first loan you see. For example, make sure that the new loan you\u2019re taking on has a lower interest rate than what you\u2019re currently paying. If not, you could wind up paying even more. You should also take some time to do research and verify the consolidation companies you\u2019re considering. Make sure they\u2019re legitimate and read the fine print to avoid being scammed.<\/p>\n\n\n\n

3. Not creating a clear plan to pay off debt<\/h2>\n\n\n\n

You\u2019re in for a rude awakening if you expect your new loan to do the hard work for you. Having a clear payment roadmap can ensure your debt consolidation success. Here are a few suggestions to help you get debt-free: <\/p>\n\n\n\n