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How to Consolidate Your Debts in North Dakota

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In a Nutshell

If consolidating your debts into one lower monthly payment and potentially reducing the high-interest rates you are currently paying sounds like something you would be interested in, keep reading. The rest of this article will explain how you can consolidate your debts in North Dakota.

Written by the Upsolve Team.  
Updated December 16, 2019


Based on recent economic statistics, the most common job categories in North Dakota are drivers/sales workers and truck drivers. Whereas the highest paid profession in North Dakota is that of financial advisors. If you spend a lot of your time on the road and are unable to keep track of your personal finances, it’s easy to get behind on your monthly bills and lose track of what you have already paid and what you still have to pay. And if you are aware of bills of yours that are not getting paid but can’t afford a financial advisor to show you what you’re doing wrong, a North Dakota debt consolidation loan may be just what you need.

Debt consolidation means combining all of your high-interest debts into one single debt with one single monthly payment. There are many forms of debt consolidation, but it usually involves taking out a new loan. This loan can take many different forms – a personal loan, home equity loan, credit card balance transfer or refinancing a mortgage to pull out equity. Each of these has its advantages and disadvantages. A personal loan is usually the best option, but it is also the hardest to get approved for and requires good credit and a high credit score. A home equity loan or refinancing your mortgage are popular options that usually come with a lower interest rate. However, both of these options put your home at risk if you default on your mortgage or line of credit. Finally, a credit card balance transfer is one of the easiest options. But again, you usually have to have good credit. And many credit card balance transfers come with risky promotional rates that increase substantially if the balance is not paid off in time.

Another form of debt consolidation that does not require having good credit and does not put your home at risk or rely on deceptively low promotional interest rates is a North Dakota debt management plan. A debt management plan consolidates all your unsecured debts into one single monthly payment. When set up through an accredited credit counseling agency, your credit counselor can often get your creditors to waive over-the-limit and late fees and reduce the overall rate of interest.

Learn More Through Free Nonprofit Credit Counseling

You can meet with a non-profit credit counseling agency in North Dakota free of charge! Non-profit credit counseling is a one-on-one session between you and a trained, certified credit counselor to review and assess your current financial situation. As part of that assessment, your credit counselor will go over your financial circumstances, your household income, your monthly expenses, and your debts. If you are willing, they will even help you put together a monthly budget and review your credit history and credit score with you. At the end of the session, your counselor will provide you with an action plan to reach your financial goals and a recommended debt relief program to put a plan into action.

The entire credit counseling session is free of charge and confidential. Nothing you share with your credit counselor will be reported to or shared with credit bureaus. To get a more thorough explanation of how debt consolidation works and what type of debt consolidation would be best for you specifically, request a risk-free, no-obligation, free credit counseling session with an accredited non-profit credit counseling agency.  

How to Consolidate Your Debts in North Dakota

If consolidating your debts into one lower monthly payment and potentially reducing the high-interest rates you are currently paying sounds like something you would be interested in, keep reading. The rest of this article will explain how you can consolidate your debts in North Dakota.


Collect the Details About Your Debts

In order to determine whether debt consolidation makes sense for you, you will need to collect specific details about your debts. These details are typically provided in your monthly credit card bills or other statements of your accounts. Pay particular attention to things like your current balance, your minimum payment, your current interest rate, annual fees, over-the-limit fees, late fees, and other recurring charges. If possible, divide your bills into categories based on whether it is a “secured debt” or “unsecured debt”. Secured debts are typically secured by your home or car. While unsecured debts typically include credit cards and personal loans. If you can’t locate your actual bills, pull a copy of your free annual credit report, which will include most of this information. Even if you will not be consolidating debts like car loans, student loans and medical bills you should still collect the details on these types of loans as well. Your credit counselor will need them to help you put together your budget.

Determine Your Monthly Income

Once you have collected the details of your debt, your next step should be determining your monthly income. This information will not only be used to create your budget but will help you determine if you are a good candidate for debt consolidation and if so, how to stay current with your debt consolidation. Because the key to debt consolidation is making a set payment every single month without taking out new debt. Commission only or irregular income may make debt consolidation challenging if it’s not clear that you have enough income to pay for living expenses and the monthly payment every month.

To determine your monthly income, you should use your two most recent paycheck stubs. Make sure the paychecks you are using to determine your income is representative of a typical work week. If you base your income on paychecks that include a lot of overtime, your income will be look much higher than it actually is, and you will be setting yourself up for failure by creating a budget you can’t follow.

Put Together Your Budget

All the details we have collected on your debts and the calculations we have carried out to determine your monthly income will all come together in your monthly budget. A budget is a spending plan based on your income and expenses for the month. You will track two types of expenditures with your monthly budget. Fixed costs and variable costs. Fixed costs are those expenses you must pay every month that does not change from month to month. They include rent, mortgage payments, car loans, student loans, and car insurance. In a 50/30/20 budget, you spend about 50% of your monthly income on necessities, 30% on wants and 20% on savings and paying off debt. Variable costs can include your necessities like utility bills, phone bills and transportation.  When putting together a budget you try to allocate an average monthly payment for each of these variable costs to make sure they’re accounted for. You can do this by using your bank statements to review your spending for these items over the last 2-3 months and dividing the total amount by that period of time. This is also the perfect time to identify problem areas of overspending on such things as dining or entertainment.

Do the Math

To get a better picture of what your own debt consolidation might look like, you can do a little math using the information you have already put together. In order to calculate your debt consolidation, you will need some important information from your budget. This includes your total debt, current total monthly debt payments, and disposable income after fixed and variable expenses.

To estimate your debt consolidation monthly payment, take your total debt and divide it by 60. The result is the debt consolidation payment you would have to pay off all your debt in five years without interest. The actual amount will vary based on the interest rate you receive on your debt consolidation and what set-up fees or origination fees  you incur.

Still, you can compare the result with the disposable income that is left after all your other monthly expenses are paid. This should give you an initial idea of whether debt consolidation is possible for you long term. If not, ask your credit counselor about other forms of debt consolidation or alternatives forms  debt relief.

Review Your North Dakota Debt Consolidation Options

Now that you have learned the steps to consolidating your debts in North Dakota, it might be helpful to review the different forms of debt consolidation in detail. No matter which form of debt consolidation you’re leaning toward, there are risks and benefits of each. Some of these risks are common to all forms of debt consolidation, while others are specific to those that involve taking out a new loan and taking on new debt:

  • Credit card balance transfers are risky because they offer a lower interest rate on balance transfers for a promotional period of time that is usually shorter than the time you need to pay off the entire balance. If the balance is not paid off within this time, the interest rate usually increases significantly, and you end up paying a higher interest rate than you currently have. Other fees like balance transfer fees can also increase the actual rate of interest you pay on the balance even during the promotional period. 

  • Refinancing your mortgage and pulling out extra equity to pay off debt refinances your unsecured debts over the term of the mortgage and may, therefore, be more expensive in the long run. 

  • A home equity loan usually comes with an adjustable interest rate, loan origination fees and closing costs that can increase the cost of the loan significantly over the life of the loan. This may result in you having a larger monthly payment than you had before and costing you more in interest and origination fees than you were paying. Even worse, if you default on the loan, you risk losing your home.

  • Obtaining an unsecured personal loan usually has fewer risks than the other options as long as you go through a reputable lender. However, they typically come with a higher rate of interest than you are paying on most of your credit card debt. So, choose carefully.

A debt management plan typically does not involve any risk upfront. However, once you enter into the payment plan your unsecured loans will typically be closed as part of the plan. Your credit score will initially be impacted which will limit your ability to obtain new credit. However, a debt management plan is typically the quickest debt consolidation to get started and will provide the most immediate debt relief.

Apply for a North Dakota Debt Consolidation Loan

If you have decided that a North Dakota debt consolidation loan is right for you, all you need to do is apply. But before you wade into the throng of lenders bidding to get your business, here are some things you should look out for:

  • First, try to deal with your local bank or credit union first. Your existing relationship with them not only assures that they are reputable, but it may give you better loan terms for your debt consolidation loan, if you are approved.

  • Never pay any money upfront; legitimate lending organizations don’t ask for money before they’ve provided any service.

  • Carefully scrutinize any offer you receive in the mail; is it advertising a promotional rate or are the terms only available to “well qualified” applicants;

  • And never deposit any “checks” you receive unsolicited in the mail!  Doing so provides the lender with all of your pertinent banking information and often obligates you to extremely onerous repayment terms hidden in the very fine print.

  • Compare whatever offers you receive to similar results you might be able to achieve through a debt management plan that lowers your interest rate, lowers your monthly payment and waives over-the-limit and late payment fees.

Finally, if you are rejected by your local bank or credit union and have to deal with a lender you are unfamiliar with, you can do some independent research to ensure the lender you are dealing with is trustworthy. This includes checking their rating with your local and national Better Business Bureau. Also, check to see if they have received any complaints through the North Dakota Attorney General’s office. Finally, look up online reviews. Just be careful if the reviews look suspicious such as being posted to the same site or on the same day; or on different sites by the same individuals.

How to Stay Current with Payments After Consolidating Your Debts in North Dakota

One area you should not neglect after consolidating your debts in North Dakota is staying current with your loan payments. The more payments you make on-time at the start of your debt consolidation, the more likely you are to pay off your debt successfully. Taking a little time now to think about ways to stay current with your debt consolidation payment is a good way to spot potential difficulties. Some things to consider include:

  • What date will your payments be due? Try to avoid making the due date for your debt consolidation payment on the same day of the month as another large expense like your car note, or mortgage.

  • Pay extra when you can? Making extra payments when you can is an excellent way to not only stay current with your debt consolidation payment but to pay off your debts early.

  • Set aside extra funds for emergencies? Using extra money from overtime, end of the year bonuses or tax refunds to set up an emergency fund to cover unexpected expenses is a great way to make sure you stay current even when financial emergencies arise.

  • Reward yourself? Don’t wait until all your debt is paid off to reward yourself for honoring your commitment to yourself to become debt-free. Celebrate small milestones in small ways that make you feel good about yourself.

North Dakota Debt Management Plan

A North Dakota debt management plan is a form of debt consolidation designed to help you get out of debt without having to take out a new loan and regardless of your current credit score. It is intended to help you fully repay your unsecured debt (usually credit cards) by making your monthly repayment more affordable. It does this by consolidating multiple monthly debt payments into one single payment, often significantly lowering the interest rates and stabilizing the monthly payment in the process. A debt management plan is helpful for those struggling to balance their regular monthly expenses with unmanageable credit card debt but can’t get approved for a debt consolidation loan.

North Dakota Debt settlement

An alternative to debt consolidation, North Dakota debt settlement is often attempted by individuals who are already behind on their bills but have a large lump of money to pay to creditors. Debt settlement companies attempt to “settle” your debts for less than you owe on them by getting your creditors to agree to take less than what they are owed in exchange for a one-time lump sum. Debt settlement can be risky because you need a large lump sum of money to settle your debts which has to be deposited with your chosen debt settlement company. And even if they fail to settle most, if any, of your debts the debt settlement company may still take a large portion of your funds in fees, commissions, and hidden charges.

North Dakota Bankruptcy

Entering into a debt consolidation agreement that you are unable to commit to or exaggerating your income while underestimating your expenses to qualify for a debt consolidation loan will only make things worse for you in the long run. If a North Dakota debt consolidation loan is simply beyond your means, then a North Dakota bankruptcy can help. Bankruptcy legally eliminates debts you can no longer afford to pay, giving you a fresh financial start. Upsolve believes no one should be too broke to file bankruptcy, and that includes you. If you need help filing bankruptcy on your own or would like to be referred to a competent bankruptcy attorney, get in touch with us.



Written By:

The Upsolve Team

Upsolve is fortunate to have a remarkable team of bankruptcy attorneys, as well as finance and consumer rights professionals, as contributing writers to help us keep our content up to date, informative, and helpful to everyone.

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