Simple Path Financial isn’t the best option for debt consolidation. Simple Path Financial has started sending out debt consolidation and personal loan proposals in the mail recently. The issue is that the terms and circumstances are at best perplexing and at worst suspicious. Because the interest rates are so low, you’d need near-perfect credit to qualify for one of their deals.
It’s quite simple to get into more debt than you can handle, especially if you’ve developed the habit of paying for everything with a credit card (or multiple credit cards). It’s tough for many people to manage debt when it’s spread out among many credit cards.
This is where credit card debt consolidation comes into play. Debt consolidation allows you to get out of a financial bind without having to declare bankruptcy. It’s important to remember that debt consolidation isn’t a magic bullet that will address all of your debt difficulties at once. To stick to your budget, you’ll need commitment, resolve, and, most importantly, self-discipline.
If you’ve decided to consolidate your debts, you’ll need to come up with a plan. Begin by determining how much you owe and what type of debt you’re dealing with. Is it entirely credit card debt, or do you owe money on a car, a personal loan, or a house?
If your debt is dispersed over several categories, the best method to consolidate it is to divide it into secured and unsecured debt. Your assets secure secured debt. Failure to make payments on the secured debt will almost certainly result in the loss of your assets, which could include a home or a car.
Unsecured debt, such as that owed on credit cards, school loans, and personal loans, isn’t backed up by collateral, so the lender can’t take it back. If you default, they can still sue you and try to seize your money. The high-interest rate is one of the most significant disadvantages of unsecured debt. Lenders will lower their risk by raising interest rates because there is no collateral to secure their loan.
We’ll go over the best way to consolidate debt in the sections below:
- With the help of a nonprofit financial counseling agency, create a debt payment plan.
- Transfer all of your debts to one credit card and, if possible, try to negotiate a low-interest rate.
- Take out a personal loan to combine your debts, which may be the best option.
Your strategy will be determined by several criteria, including your credit score. Most credit card companies will give your finances a FICO score, which will help them assess if you can acquire a large enough loan to consolidate debt at a reasonable interest rate.
All of these solutions, of course, necessitate having a source of income that is sufficient to support your monthly payments and other expenses. The issue is that if you miss even one payment, your debt plan will start to come apart, and the walls will begin to close in again. You may even face foreclosure if you obtained a collateralized loan to consolidate your debt.