debt
June 10th, 2008
I was talking to Ted while riding the bus the other day and he said that he wanted to use debt consolidation to get his life back in order and eventually begin a new start. His credit card bills and car payments have been running overdue left and right, and he was struggling to even pay off the interest to many of debts he owed. He was getting discouraged at work, whose pay didn’t seem even close to enough to pay off the mounting debt. He started to think about turning to the lotto or get-rich-quick scams to save the day, but I encouraged him to think soberly.
Debt consolidation made sense for his situation. His debts were growing unwieldy and he needed a fresh start. Plus, he wasn’t the most organized guy, so he would often get buried under the avalanche of mailings and calls from creditors and subsequently miss payment deadlines or mail the wrong check to the wrong company. In short, he needed debt consolidation to clean his life up and get back on track.
Ted was a bit surprised though when he started to look into debt consolidation. Basically, he would have to take out another loan. He was more than finished with adding on one more burden to his life. Still, this loan would be different since it would be used to pay off the other loans. The interest rate may not be the lowest in the industry, but any extra percentage points would be well worth it in exchange for a more stable repayment plan and the peace of mind that comes from only having to pay one loan month to month, and not get buried in variable rates and due dates, as had been for several months.
First, however, Ted needed to put down some serious collateral to help secure his consolidated loan. I guess this makes sense from the loan company’s perspective. After all, which company would want to lend even more money to those who are already in debt? Fortunately, Ted had two nice automobiles and a jet ski that he could use to secure the debt consolidation. (These vehicles were part of the reason he was so much in debt in the first place, but that story can be told another time.) Long story short, he was approved for the debt consolidation, and now he’s on his way to becoming debt free as he works harder to pay off one clear payment each month.