Do you think you can consolidate past due accounts? The answer to that is yes! It is possible for you to use this debt relief strategy to help make your payments easier to manage. It is not a complete catastrophe if your current financial situation makes it harder to meet your current credit obligations. You can consider it a temporary setback that will challenge you to step up your game in paying off your debts. When you start having past due accounts, use it as a motivation to find strategies that will help make the repayment easier. This can be seen as a reason to consolidate your debts.
Having past due accounts is not as uncommon as you think. In fact, a lot of people have suffered from this at one point in time. Some people simply forgot a due date. Others have a more serious reason – like having insufficient funds. According to current reports, there is an increasing number of delinquent student loan accounts and credit card debts.
Of course, having a past due account does not automatically mean you have delinquent debt. The latter means you have not paid the debt for at least 90 days. A past-due simply means you went past the due date without payment. However, the fact that a lot of people have past due accounts does not mean you should not do something about it. You need to act on it as soon as possible because when debt becomes too much for you to pay off, it has the power to destroy your financial future. This is why you might want to think about consolidating your debts.
Options to consolidate past due accounts
Fortunately for you, there are several options to consolidate past due accounts. You need to choose which of these will help you achieve debt freedom despite your specific financial situation.
Debt consolidation loan
This is a consolidation strategy that involves borrowing a loan that will pay off your multiple credit accounts. It is how it consolidates the debt into one. Of course, this means your debts are not really paid. You just transferred it into another account so the payments will be simple. Since this is a new loan, it should be a better replacement for the past due accounts that you just paid off. Using a loan to consolidate debts will help you save money as long as your credit score is not too bad. If your debts are only past their due and not considered as delinquent, then there is a chance that your credit score is not yet too bad. You can still use this strategy to consolidate past due accounts.
Balance transfer card
Another option to help with any past due accounts that you have is to use a balance transfer in consolidating debts. Using a loan and a balance transfer card is almost the same. But instead of a loan, you will be using a credit card in the consolidation process. This card is usually a new account that offers a 0% interest rate during the introductory period. This usually lasts for a couple of months and even a year or two. Usually, a balance transfer will require a fee that is a percentage of the amount that will be transferred. You can have this waived but that would mean getting a shorter 0% interest period. Sometimes, paying the fee will end up saving you more money so make sure you do the calculations.
Finally, if you want to consolidate past due accounts, you might want to opt for debt settlement. This will only seem like debt consolidation if you work with a professional. The debt expert will work on your behalf to negotiate your past due accounts. Through your consultations, they will help you create a repayment plan that you can afford. Then they will apply this to your different past due accounts – talking to every creditor, lender, and company to ask for a debt reduction. While they are doing that, you will be trying to save and grow your debt payment fund.
Once the negotiations are completed and acceptable to you, the funds you had been saving will be used to pay a portion of the debt as agreed. Any amount that will not be covered by the payment will be forgiven. That is how you will get a debt reduction on the credit that you owe.
You can choose among these three options if you want to consolidate past due accounts. Obviously, it is not wise to ignore the debts. You need to find a way to pay it all off and consolidating is a great strategy to use.
How to avoid the need to consolidate past due accounts
Of course, you do not have to worry about consolidating your debts if you do not let it become a problem in the first place. Past due accounts can be avoided. You just have to follow these simple tips to ensure that you will not be put into a position wherein you have to consolidate past due accounts.
Do not borrow more than what you can pay
It is okay to borrow money. However, you need to borrow only what you can afford to pay back. Reports reveal that consumer debt continues to rise and some carry over a balance on their credit cards to the next billing cycle. By carrying over a balance, you will be paying interest on that amount. Since credit cards are known for their high-interest rates, your debt can grow significantly in a short amount of time. If you want to stay in control of your debts, make sure you only borrow what you can pay in full when the billing statement comes.
Strive to keep up with your monthly payments
In case you have borrowed an amount that you can pay in installments, you should ensure that you pay it on time. Since you will be paying interest on the debt, you need to avoid being charged with late penalties. Make sure you avoid paying other fees if you can. That way, you can minimize the amount that you have to pay each month. With less to pay, it will be easier for you to keep up with all your payments.
Be honest with your financial situation
Finally, you have to be honest with your financial situation at all times. If you think that your debts are starting to get ahead of you, stop borrowing money and strive to pay off what you owe first. Until you have lowered the balance, only then should you consider borrowing more money – but only if you really need it. If not, then stay away from credit. In case you are finding it hard and your past due accounts are starting to pile up, think about asking for help. Getting immediate help might keep your situation from becoming worse.