Do it Yourself - Debt Consolidation

There are hundreds of thousands of people who have had a really tough time in the last year. People who never expected to have a debt problem have found themselves in over their heads and in a lot of financial trouble. The good news is that it's a great time to get a fresh start and make some serious plans to get your debt under control. While you could take advantage of a service, you can also attempt to try do-it-yourself debt consolidation. There are plenty of options that you can try on your own to get your financial burden lightened.

Do You Own Your Home?

This is the easiest route to take for classic DIY consolidation. If you have been paying on your mortgage for a significant period of time and have built up enough equity, you can apply for a home equity loan or refinance. In this situation, be sure that the new terms are favorable for a long term solution, however. Don't settle for adjustable rate mortgages or other schemes that may cause you to lose your home in the future. Also, carefully assess the new payments to ensure that you can afford the terms. The extra money that you get in equity can be applied to your debts and you can start over from scratch with a better plan in place. For the best terms and interest rates, start this process before you have missed payments, defaulted, or otherwise impacted your credit report.

Zero Interest Can Be a Good Bet

It seems that everyone gets those unsolicited credit card offers in the mail. While you may just throw those away or shred them, it may be time to take another look at what they may offer you. If you have a moderate amount of debt that needs consolidated, look for a zero percent introductory period of at six months; one year is even better. Apply the problematic balance to the new card and then don't charge any additional expenses on either account. Budget the amount that you will need to pay the balance within the grace period and stick to it religiously. This works as a long term debt consolidation strategy only if you are disciplined. The key here is to know what the terms are and not add any more debt during the time that you are paying off the balance. Once that is accomplished, feel free to leave the accounts open. It's actually good for your credit. However, only charge what you can pay off each and every month.

While there are plenty of other do-it-yourself options for debt consolidation, these are the most common. Feel free to explore more creative options as well, or to use the services of a professional if you need a bit more accountability during the process.