How to Consolidate Your Debts in Montana

Collect the Details About Your Debts 

In order to determine whether a Montana debt consolidation can provide you with enough relief to make a difference for you and your family, you will need to collect some details about your debts. The best way to collect most of these details is by accessing your current credit card bills and loan statements. If you have non-credit card debts like car loans, personal loans, student loans and court judgments you should collect details on them as well. The most important information you are looking for in your statements includes the balance owed, minimum payment, due date, interest rates, and other loan terms and conditions. Once you assess this information, you can make an informed decision about which debts you’d ideally like to consolidate. A good way to make sure you do not forget any outstanding accounts is to obtain a free copy of your annual credit report and refer to it as well.

Determine Your Monthly Income

Now that you have assembled the details of your debts, the next thing you will need to do involves evaluating your monthly income. Assessing your monthly income is important when determining whether debt consolidation is a good option for you because the key to successful debt consolidation is making set payments every single month, reliably. 

When working out your monthly income, use your two most recent paycheck stubs. Make sure the paychecks you are using to determine your monthly income are representative of typical pay periods. If your paycheck includes a lot of overtime, your income will be artificially inflated and you will be potentially setting yourself up for failure by creating a budget you can’t possibly follow.

Finally, avoid including unreliable or conditional resources when assessing your monthly income. Relying on income that is not consistently paid every month (or that is likely to be adjusted over the life of the debt consolidation loan) risks stretching your budget too thin. 

Put Together Your Budget

A monthly budget allows you to schedule and track the income and expenses you bring in and pay out on a regular basis. Constructing a solid budget will allow you to understand whether you can afford to make a debt consolidation payment on a reliable basis. Typically, your income will consist of earnings from work and other sources of revenue you receive regularly during the month. Your expenses will include all the purchases you make and bills you pay every month. Fixed costs expenditures include expenses you have that do not fluctuate more than $10 per month like rent, auto loans, student loans, and insurance. Variable costs include expenditures you pay that fluctuate from month to month like gas, groceries, and utilities. When you deduct your monthly expenditures from your monthly income, the remaining balance is known as your “disposable income.” The more disposable income you have, the more likely you are to be a successful candidate for debt consolidation because this figure indicates you have the resources available to make your payments reliably.

Do the Math

Now that you have put together a budget, you are very close to determining whether you are a good candidate for Montana debt consolidation. To get an approximation of what your debt consolidation loan payment may be, you’ll need to do a little math. First, take the total amount of debt you wish to consolidate, and divide that number by 60. Divide it by 60 because there are sixty months in a five-year debt consolidation. Compare this payment amount to your “disposable income.” Your disposable income should (ideally) exceed your projected debt consolidation payment. If it does, then Montana debt consolidation is an option you can probably take advantage of with confidence. If you do not have enough disposable income to cover the projected monthly debt consolidation payment, then you may need to explore other debt-relief alternatives besides debt consolidation.

Review Your Montana Debt Consolidation Options

Choosing to pursue debt consolidation in Montana is a long term commitment. You therefore want to select a debt consolidation approach that is a good match for your financial situation. In order to make the best choice, here are some things you should consider before committing to one option over another:

• Do any of your credit cards offer credit card balance transfers? If so, this might be a good option if you are only looking to consolidate other credit cards and do not want to close them.

• Do you have equity in your home? If so, refinancing your mortgage or taking out a home equity loan are both low-interest options that can consolidate both secured and unsecured debts.

• Is your credit still good? If so, you may be able to obtain an unsecured personal loan. This is another good option for consolidating both unsecured and secured debts.

• Are you already behind on your bills and struggling with a less than ideal credit score? If so, then a debt management plan may be your best option. A debt management plan combines unsecured eligible debts into one single monthly payment. You make this payment to a non-profit agency that then distributes it to your creditors.

Whatever option you choose, explore the advantages as well as the disadvantages of each with your credit counseling agency before committing to one over the other.

Apply for a Montana Debt Consolidation Loan

After you decide what type of debt consolidation is best for you, the second most important decision you will make involves selecting a lender to fund your debt consolidation loan (if you’re not consolidating your debt via a DMP). Because they are not banks, non-profit credit counseling agencies can’t fund debt consolidation loans. As a result, you will have to select a lender for your debt consolidation loan on your own. There are some things you can look out for to make it less likely that you will be taken advantage of.

• Scrutinize direct mail and online offers carefully. The actual terms and conditions of these loans often contradict the advertised rates and terms.

• Ask friends and family for recommendations and referrals. If you have friends or family that have consolidated their debts or taken out home loans, ask them to recommend a lender they trust.

• Avoid pushy, aggressive or elusive sales representatives or agents. Debt consolidation is a serious commitment that you should not be rushed into.

• Do not deal with any lenders that require you to pay them upfront. Reputable lenders will not ask to be paid until they have provided the service you are paying for.

Finally, make sure you understand all the benefits and features of a debt management plan. A debt management plan is a form of debt consolidation that does not require taking out a new loan, is available even if you have bad credit and utilizes the help and assistance of accredited non-profit credit counseling agencies in dealing with your unsecured creditors.

How to Stay Current with Payments after Consolidating your Debts in Montana 

When you have finalized your Montana debt consolidation plan, your ultimate goal from that point on is to stay current with your monthly payments. Committing to a Montana debt consolidation process is an admirable step towards becoming debt-free. But starting a debt consolidation plan and then getting behind on the plan can leave you in a worse situation than you were in before you took your initial steps. As a result, it is important to think creatively when planning ahead to stay current on your Montana debt consolidation:

• Set up auto bill pay. Enrolling your debt consolidation loan into an automatic bill paying program is an excellent way to make sure you do not forget to make your payment every month.

• Change your due date if necessary. If your loan payment is due on the same day of the month as other large expenses you pay, request that it be changed.

• Make extra payments or pay extra when you can. Making extra payments or paying extra with each payment is a great way to pay off your debt consolidation early.

• Reward yourself. Come up with ways to motivate yourself to stay current by creating and celebrating milestones like making three straight payments on time.