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How to Consolidate Your Debts in New Hampshire

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In a Nutshell

Your credit counselor will answer any questions you may have regarding debt consolidation in New Hampshire. In the meantime, this guide will walk you through the debt consolidation process so that you can better determine whether it may be a good option for you.

Written by Upsolve Team
Updated January 28, 2020

If you live in New Hampshire and (despite earning a steady income) you’re struggling with the amount of unsecured debt that you have to pay back monthly, a New Hampshire debt consolidation may serve as a productive way to manage your debt and repay it successfully over time.

New Hampshire debt consolidation works by combining unsecured, high-interest debt into one single monthly payment. There are many forms of debt consolidation. Generally speaking, you can either work with a credit counseling agency to construct a debt management plan or you can secure a new line of credit to act as a balance transfer. You can potentially consolidate your debts by securing a home equity loan, a credit card balance transfer, a personal loan, an unsecured debt consolidation loan, constructing a debt management plan, or by refinancing your mortgage. Each form of debt consolidation has its benefits and disadvantages and one size does not fit all. For example, refinancing your mortgage or taking out a home equity loan could potentially put your home at risk. Alternatively, credit card balance transfers and personal loans require relatively good credit to obtain and usually carry much higher interest rates over the life of the loan. As a result, most consumers opt to consolidate their debt through DMPs or unsecured debt consolidation loans. Either way, debt consolidation often serves as an excellent way to regain strong financial footing on the way to becoming debt-free.

Learn More Through Free Nonprofit Credit Counseling 

Non-profit credit counseling is available free of charge in New Hampshire to help you decide whether debt consolidation and other money management tools are right for you. The free, non-profit credit counseling process is completed by attending a one-on-one financial counseling session between you and a certified credit counselor. As part of your session, your credit counselor will discuss your financial circumstances and assess information related to your household income, your monthly expenses and your debts. If you are willing, they will also review your credit history and credit score with you. At the end of the session, your counselor will provide you with an action plan designed to help you reach your financial goals. 

You can learn more about debt consolidation and other debt relief programs from Money Management International, CESI or Green Path. Or for help locating a different non-profit credit counseling agency in your area please feel free to contact Upsolve.

How to Consolidate Your Debts in New Hampshire

Your credit counselor will answer any questions you may have regarding debt consolidation in New Hampshire. In the meantime, this guide will walk you through the debt consolidation process so that you can better determine whether it may be a good option for you.

Collect the Details About Your Debts 

The question of whether debt consolidation may be a good option for you will depend largely upon the type of debts you have, your credit score, and the total amount of all the debts you owe. It is important to gather accurate information about your debts before making a decision regarding how to handle them. The best way to do this is by finding copies of all of your monthly bills and your most recent credit card statements to evaluate each current balance, minimum monthly payment, due date, annual interest rate, late payment fees, over-the-limit fees and other charges billed for each account. You should also gather details regarding any personal loans, student loans, medical bills, payday loans, auto loans, installment loans and/or collections you’re obligated to pay. Before you attend your free credit counseling session, you’ll want to request your free annual credit report, which will include all of the information your creditors have reported as part of your credit history. You’ll also want to make a spreadsheet of all your current balances, due dates, interest rates, monthly payments, late fees, annual fees, and other important loan terms for your credit counselor to evaluate.

Determine Your Monthly Income

Evaluating your monthly income is just as important as assessing your debts when it comes to deciding whether debt consolidation may be a good option for you. Because the key to debt consolidation is making a timely set payment every single month, you’ll want to make sure that you have access to enough reliable income to pay for living expenses and your monthly consolidated debt payment consistently.

If you earn a regular paycheck, use your two most recent paycheck stubs to calculate your monthly income. As long as they are representative of your typical pay, you should be able to determine how much monthly income you can reliably count on to cover your regular expenses and make your monthly debt consolidation payment.

If you do not earn a paycheck, don’t panic. Non-wage earners whose principal income is Social Security benefits or other assistance can still use debt consolidation to their advantage. Wage earners whose income is irregular may also benefit from debt consolidation, but they will need to pay special attention to whether they reliably have income available to pay for living expenses as well as a debt consolidation payment consistently.

Put Together Your Budget

The reason it is so important to get a realistic picture of your monthly income is that this information impacts your ability to create an accurate monthly budget. A budget is a summary of the income you bring in every month and the expenditures you pay out. The difference between the two is known as your disposable income. There are two categories of expenditures tracked in a monthly budget – fixed costs and variable costs. Fixed costs are those expenditures that do not fluctuate more than $10 per month, such as a mortgage payment, car loan, student loan or insurance. Variable costs are those expenditures that fluctuate from month-to-month like utilities, gas, and groceries. If you have trouble preparing your budget on your own or you would like some assistance when taking this step, try using a spreadsheet or some personal finance software such as Mint or Albert.

Do the Math

You can get a quick preview of what your debt consolidation payment may look like by doing some relatively straightforward math. To come up with this figure, you will evaluate your total debt, current total monthly debt payments, and disposable income. Take your total debt balance (of those unsecured debts you’d like to consolidate) and divide it by 60. This number represents your monthly debt consolidation payment over a five year period. You should at least have enough disposable income remaining every month (after accounting for the other expenses listed on your budget) to make this payment. 

Review Your New Hampshire Debt Consolidation Options

The last step you’ll want to take before applying for a New Hampshire debt consolidation loan is to review your debt consolidation options. We discussed earlier how debt consolidation can involve securing a new unsecured personal loan, refinancing your mortgage, opening a home equity line of credit or doing a credit card balance transfer. You can also avoid securing new credit by consolidating your debt via a debt management plan. You’ll want to evaluate the pros and cons of each option before committing to an approach. 

  • Credit card balance transfer. Pro – usually quick and has little impact on your credit score. Con – can only consolidate credit cards and promotional interest rate may increase before you pay off the balance transfer.

  • Refinancing your mortgage. Pro – usually a lower interest rate and can pay off any type of debt. Con – can be a long process, will usually result in a higher monthly mortgage payment and extends the time required to pay off your mortgage.

  • A home equity loan. Pro – low interest rate and can pay off any type of debt. Con – loan is secured by the equity in your home and puts your home at risk if you fail to make the payment.

  • Unsecured personal loan. Pro – can pay off any type of debt, has little impact on your credit score. Con – usually requires good credit. May not come with a lower interest rate.

  • Debt management plan. Pro – one single monthly payment. Does not

require good credit. May come with a lower interest rate. Con – will need to work with a nonprofit agency to create this plan, which can take some time.

Apply for a New Hampshire Debt Consolidation Loan

When selecting a lender to fund your New Hampshire debt consolidation loan, there are a few rules of thumb you should keep in mind. For example, you should carefully go over any offers you receive unsolicited in the mail. Many of the terms and conditions advertised in these offers do not apply to everyone who receives them. You should never pay a lender up front before your loan is funded. Also, never deposit unsolicited checks you receive in the mail. All of these precautions will make it less likely that you will be scammed or taken advantage of by unethical organizations.

If all else fails, and you are unable to get approved for a New Hampshire debt consolidation loan or cannot find one with terms you are happy with, a debt management plan is a viable alternative. A debt management plan does not require that you take out a new loan and is available to you regardless of your credit score.

How to Stay Current with Payments After Consolidating Your Debts in New Hampshire 

You now understand how debt consolidation works, know how to determine what type of debt consolidation is best for you, and are ready to apply for your own New Hampshire debt consolidation or DMP. To better ensure the success of your debt consolidation process, you’ll want to be prepared to remain current with your New Hampshire debt consolidation payments once your consolidation is finalized. The following is a list of suggestions that will help you stay current with your New Hampshire debt consolidation and deal with potential pitfalls if and when they arise:

  • Keep track of your spending. Otherwise, you may find yourself without enough in the bank to cover your payment.    

  • Check the due date for your debt consolidation payment. Does it fall on the same day as another large expense? If so, ask your credit counselor about changing it.·        

  • Try to create an emergency fund. Setting aside a little extra money every month for unexpected expenses like car repairs or urgent care visits will prevent having to use your debt consolidation payment for these emergencies.        

  • Ask your bank or credit union to make your debt consolidation payment for you. Most banks and credit unions offer automatic payments that will pay your bills for you each and every month out of your designated account.

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New Hampshire Debt Management Plan

A New Hampshire debt management plan is a form of debt consolidation that combines unsecured debts into one single monthly payment. Instead of paying back a loan, your DMP payments will be submitted to a nonprofit credit counseling agency which will distribute your payment to your creditors. Your non-profit credit counselor may be able to lower the interest rate tied to your unsecured debts and get your over-the-limit and late fees waived. When completed successfully, you will repay all your debt over a period of three to five years.

New Hampshire Debt Settlement

New Hampshire debt settlement is a debt relief option that may make sense for individuals who have a lump sum of money available to pay to their creditors. Unlike debt consolidation, debt settlement asks your creditors to accept less than they are owed on the accounts you have with them. If this option appeals to you, be careful to research the reputation of any debt settlement company you’re interested in working with. Some debt settlement companies are notorious scam artists. Additionally, note that many for-profit debt settlement companies (including some that are reputable) charge significant set-up fees and commissions tied to the amount of debt they settle for you.

New Hampshire Bankruptcy

No matter how good a financial plan you construct, if you lack the income to make regular payments and your financial situation will not allow you to postpone dealing with it any longer, then a New Hampshire bankruptcy may be a good alternative for you. Bankruptcy is a form of debt relief that legally eliminates dischargeable debts you can no longer afford to pay. Whether you’ll be required to restructure your debts and pay some of them back first will depend on the type of bankruptcy you file for. To learn more about bankruptcy and whether it is right for you, contact Upsolve today.

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