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How To Consolidate Your Debts in Oklahoma

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In a Nutshell

This guide will walk you through the steps of the debt consolidation process so that you can make an informed decision about your options. If debt consolidation is not the right debt management alternative for your situation, know that you’ll be able to access information about other popular debt management options at the end of this guide as well.

Written by Upsolve Team
Updated December 14, 2021

When it starts to feel like you’re writing a check to a different creditor every other day, it’s time to consider streamlining your debt payments. Whether you’re current on all of your debt repayment plans or you’ve missed the last few minimum payments on several accounts, you may benefit from looking into the Oklahoma debt consolidation process.

Debt consolidation can be accomplished by securing an Oklahoma debt consolidation loan or by entering into a debt management plan. Under either scenario, the debt consolidation process will allow you to stop paying multiple creditors every month. Instead, you’ll be able to make a single monthly payment because your debts will be combined under a single account.

Essentially, if you secure a new Oklahoma debt consolidation loan, you’ll use it as a low-interest rate balance transfer to pay off any unsecured debts you may have that currently charge you high interest rates. That way, you’re left with a single payment on one account each month instead of multiple payments due on multiple accounts.

Similarly, if you work with a credit counseling agency to construct a debt management plan with favorable repayment terms, you’ll only make one monthly payment to that agency. The agency will then distribute the funds from your monthly payment to your creditors per the terms of your payment plan. Either way, you’ll streamline your debt management process, save money, and reduce the risk that you’ll be held accountable for multiple late fees on numerous accounts every month. This can also help you better manage your overall finances and be able to pay your other bills on time. For instance, it can help ensure you have the money to pay rent so you can avoid being evicted.

Learn More Through Free Nonprofit Credit Counseling

If you’re interested in learning more about your debt management options generally and your debt consolidation options specifically, it’s a good idea to schedule a no-cost, no-obligation credit counseling session with a certified credit counselor in your area. Accredited, nonprofit credit counseling agencies offer a free credit counseling session to anyone interested in learning more about their money management and debt relief options. Credit counseling is confidential and doesn’t obligate you to pursue debt settlement, secure a personal loan, or otherwise “act” in any way. During your free credit counseling session, you’ll sit down with your credit counselor as they review your income, debts, expenses, and financial goals. At the end of your session, you’ll be given a personalized action plan detailing which money management and debt relief options you may want to explore to ultimately achieve the goals outlined in the session. This free service is available to you regardless of your credit history, your credit score, and the particulars of your financial situation. This is a great option available to everyone that everyone  should take advantage of.

How to Consolidate Your Debts in Oklahoma

This guide will walk you through the steps of the debt consolidation process so that you can make an informed decision about your options. If debt consolidation is not the right debt management alternative for your situation, know that you’ll be able to access information about other popular debt management options at the end of this guide as well.

Collect the Details About Your Debts 

Before you can make a determination about whether consolidating your debts is a good option for you, you need to take some time to evaluate your debts. It’s not a good idea to consolidate every type of debt. Debt management plans only consolidate certain unsecured loans and unsecured debts, such as credit card debt, some medical bills, personal loans, and relatively minor, non-federalized student loans. Secured debts, like auto loans, home equity loans, and other debts secured by collateral usually shouldn’t be consolidated. Even if you have the ability to pay off these debts with an Oklahoma debt consolidation loan, refinancing these particular debts will probably not result in lower monthly payments and/or lower interest rates than you’re paying on them currently, as secured debt tends to be issued with favorable terms to begin with. It is for this reason that the types of debt you hold will largely dictate whether addressing your debt with an unsecured debt consolidation loan, a home equity loan, a personal loan, or a credit card balance transfer makes sense or not in your situation. If you’re unsure of what kinds of debt you’re responsible for, or you’d simply like an easy way to reference your debt-related account information, consider pulling a free copy of your credit report from any or all of the major credit bureaus.

Determine Your Monthly Income

How do you know whether consolidating your debt is a good option for your situation? You can begin to answer this question by evaluating your income and constructing a budget. Budgeting is critical for a successful debt consolidation process because you’ll need to know whether you can make your monthly payments on time, every time or not. If your income is too unreliable or insufficient to allow you to make regular monthly payments on your Oklahoma debt consolidation loan or DMP, you may want to speak with your credit counselor about debt management alternatives.

To determine your reliable monthly income, gather recent pay stubs and any other earned or unearned income account statements. Make sure to calculate the amount of income you take home after taxes have been levied and other expenses have been pulled directly from your checks. Once you have this information at the ready, you can begin to construct a comprehensive budget.

Put Together Your Budget

You’ll need to create an accurate budget before you can determine whether you can afford make regular monthly payments on your consolidated unsecured debt. Now that you have a strong sense of what you “take home” in income, it’s time to evaluate your spending habits. Pull recent credit card and bank statements to analyze your spending over the past several months. When listing your expenses, you’ll want to account for fixed, variable, and irregular expenses so that you’re not underestimating how much you spend on a regular basis. Fixed expenses (rent, car insurance, etc.) don’t change from month to month. Variable expenses (gas, food, entertainment, etc.) fluctuate based on your family’s needs at any given time. Irregular expenses (car registration fees, oil changes, back-to-school clothes, a fixed percentage of your income set aside for emergencies) don’t occur every month but you need to budget for them monthly so that you have money set aside when you need it to cover these expenses. To address irregular expenses, add up how much each irregular expense costs you every year, then divide that total by 12 to see how much you need to budget for that expense on a monthly basis.

Once you have your total expenses listed (don’t include any monthly payment amounts for debt accounts you hope to consolidate), you can subtract your expenses total from your take-home income. The money you have left over is the amount available to pay your consolidated debts.

Do the Math 

Now that you know how much money you have available to pay your monthly bills related to your consolidated debts, you can determine whether this amount is enough to “cover” a consolidated loan or DMP debt payment. Take the total amount of debt you owe on all the accounts you hope to consolidate. Divide this total amount by 60 to see how much you’d likely be expected to pay on a monthly basis if you consolidated your debt via a DMP, personal loan, home equity loan or credit card balance transfer over a 5-year period. Is your disposable income sufficient to cover this debt payment? If not, recalculate while dividing by 120 to get a 10-year repayment plan estimate. If your disposable income remains insufficient to cover a monthly DMP or consolidated loan payment, you might want to consider some money management and debt relief alternatives, such as debt settlement or bankruptcy.

Review Your Oklahoma Debt Consolidation Options

If your budget will support the debt consolidation process, it’s time to figure out which debt consolidation option makes the most sense for your situation. If you have a bad credit score, you’ll likely need to speak with a credit counseling agency about entering into a debt management plan, as you don’t have to have good credit to secure favorable consolidation terms with a DMP. However, if your credit score is solid, you can secure a new line of credit and use it as a balance transfer to pay off your existing high-interest debt. Whether you refinance via a personal loan, a home equity line of credit, a credit card balance transfer, or a debt consolidation loan option alternative, just make sure that the origination fee and/or transfer fee associated with the loan isn’t outrageous and that the loan features a better interest rate than the accounts you’re paying down currently.

Apply for an Oklahoma Debt Consolidation Loan

If you do opt to secure a new line of credit instead of entering into a DMP for the purposes of debt consolidation, choose your type of loan and your lender with care. Lenders who employ overly aggressive sales tactics, solicit your business by sending you “checks” in the mail, or who make grandiose promises that sound too good to be true should be avoided. It’s generally a good idea to research the reputation of any lender you’re interested in working with before committing to a debt consolidation loan arrangement. You can conduct a “reputation search” on the site maintained by the Better Business Bureau.

How to Stay Current with Payments After Consolidating Your Debts in Oklahoma 

Because a successful debt consolidation process is dependent on your ability to make reliable payments, it’s important to construct your debt consolidation and your budget in ways that will better ensure the success of your approach. For example, if you set up your debt consolidation loan or DMP payments up through automatic bill pay, you won’t risk late payments or late fees. It can also be helpful to schedule your payments for a date when you usually have significant income in your bank account. If you pay rent on the first of the month, you’ll probably want to make your consolidation loan payments mid-month. Finally, keep up with your budgeting efforts. Tracking your spending and minimizing your credit card debt will help to ensure that you don’t fall into a situation in which your debt ultimately becomes overwhelming.  

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Oklahoma Debt Management Plan

As previously mentioned, an Oklahoma debt management plan is a form of debt consolidation that doesn’t require you to secure a new line of credit. Instead, this form of debt consolidation uses a nonprofit credit counseling agency as a “middle man” in that its staff negotiates a repayment plan (ideally with favorable terms) with your creditors and administers the plan. Once the DMP is in place, you’ll make one monthly payment to the agency and the agency will take care of distributing those funds to your creditors.

Oklahoma Debt Settlement

If you have access to a lump sum of money, can sell assets quickly to pay down your debt, or can raise a significant amount of money over the span of a few months, the Oklahoma debt settlement process may be an option worthy of consideration. You can either work with a debt settlement company or negotiate a settlement directly with your creditors. Essentially, you’ll offer them a lump sum in exchange for partial forgiveness of your overall debt and the closure of your account. Note that debt settlement will temporarily damage your credit, so if you have excellent credit, you may want to stick with debt consolidation or a DMP.

Oklahoma Bankruptcy

If you don’t have the resources to make debt consolidation or debt settlement work (or your debts are simply unmanageable), it may be time to explore the process of filing for Oklahoma bankruptcy. This process can potentially allow you to eliminate your eligible debts in as few as 90 days. You can either seek the assistance of a qualified attorney or you can file a Chapter 7 bankruptcy on your own for free with help from Upsolve.

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