😩What is Debt Consolidation? Should I do it?🤔


well hello and welcome to another
episode of the only life of your dreams YouTube channel it’s me
Timesha I am so glad to have you here with me today and today we got a great
one we’re gonna be talking about debt consolidation the good the bad and the
ugly alright so definitely stay tuned for
that if you’re new to my channel welcome we are talking about financial freedom
and how to get free and if that’s something you are interested in you must
check me out stay with me stick with me so we can help each other well yeah so
we can help each other become financially free I gave you the
accountability you need and the opportunity to work with me to get your
finances in order and if that is something you’re interested in
definitely look me up alright so debt consolidation what is it
alright well that consolidation is if you are overwhelmed with debt meaning
you have medical bills and you have credit card bills and student loans and
house payments and other debts Carl yeah car loans I keep saying tower loans but
you know other loans personal loans that you may have taken out for furniture or
anything like that then those things can pile up and the
more and more you borrow the more and more you gotta pay back and of course
you have that ugly word called interest because everybody not only wants their
money they want their money back with some money on top okay
so you’re giving out all of this money and then you look at your bank account
and you have zero or even worse you have negative and you don’t know what to do
so what debt consolidation does is it takes all of the money that you’re
shelling out to all of these different companies and puts it all in one so you
can pay all of your debts at one fell swoop all right so my personal story on
debt consolidation I say about four or five years ago I was paying the credit
card bills I still paid the credit card bills but at the time I was paying the
credit card bills and I was getting about $20,000 less income a year and I
was just putting stuff that I wanted or needed on credit cards mostly stuff I
needed like stuff like food or you know will not necessarily need it because it
was like gifts for you know happy birthday stuff you know stuff that I
really didn’t need but you know you can’t go to a person’s party
empty-handed so you just I guess don’t go to the party but that’s kind of rude
too so you know trying to be the little southern belle which I’m not
yeah I was going further further in debt and so you know my husband looked at the
credit card bills one day he was like oh no we are almost maxed out what are you
doing and I said well you know I’m paying for this it’s like you need to do
something you need to stop we need to cut all this stuff off and you need to
pay this off I said but I don’t know is that do it that’s my husband all right
so I tried to figure out a way to consolidate all of my credit card
payments into one and I did that and so right now I’m in the process of almost
paying them off and in another video I’m going to talk about that as well but I
wanted to give you an overview of what debt consolidation is so that you know
that you have options you don’t have to sit and wait in debt forever okay
this is a temporary thing if you stay disciplined and you do what you need to
do and you pay the money you will get out of debt and it will be like a weight
off your back okay so what are the pros and cons to debt consolidation well here
are the pros first of all you get a lower monthly payment and what that
means is if you’re paying $200 to Kohl’s and $50 to visa and $75 to discover or
whatever MasterCard company that you’re with they take all
that money it well not all of that money all of those bills and put it into one
and instead of paying what I just said that off-the-cuff and I now not know
what I just say it $350 so they take that and take all $350
and may be consolidated to you only paying $100 a month instead of 350 so
that gives you what an extra $250 right so it makes sure it stretches your
dollar more because it takes all of that money consolidates it into one or all of
the creditors that you have consolidated in one and you have a lower monthly
payment so you can actually pay it off all right it also gives you a simpler
payment because you’re not writing a check to Visa or Discover or Kohl’s or
Macy’s or your Walmart or a Kroger or whoever you’re indebted to you have one
monthly payment that you’re paying it to and once it’s your one and done once you
pay it it’s over with you don’t have to think about it anymore
all right it also will raise your credit score over time so eventually as you
continue to pay the debt of course the debt becomes lower and it also boosts
your credit score so if you are fumbling and like me I think I started that I was
in like the four or five hundred I think I was in mid five hundred when I started
debt consolidation now I’m like in the mid 700 so that can check that can
highly jack up your credit score make you look very very good to other
creditors who are going to send you more things to get you in today
okay so just be prepared and ready for that all right number four or yeah
number four you are paying to a single creditor so like I said before you’re
not paying to all these different people it’s all going to one creditor and it’s
one and done and then you also have the opportunity to get tax
breaks so if you own a home and you take out a home equity loan meaning that you
are taking up a loan on the extra value of your house so say your house is worth
a hundred thousand dollars but over the course of you staying there it’s worth a
hundred and fifty thousand dollars and so you take out a home equity loan or on
tenth out of $10,000 or $25,000 or heaven forbid fifty thousand dollars to
pay off all of your creditors and then you’re only paying the mortgage company
or the bank for that actual loan that you were paying your creditors on and if
you do that then you also get tax breaks so all of the interest that you’re
paying on that home equity loan will also be tax-deductible every year so you
get some money back for getting a home equity loan all right so maybe wives if
your wives with your money maybe not so wise and we’ll talk about that as we
roll into the cons so the cons is you have if you use a home equity loan and
you don’t pay that home equity loan they can take your property you can lose your
house simply because you are not consistent in paying and you know the
banks don’t care okay they want their money and you can file you know for
foreclosure for foreclosure we can file bankruptcy and everything like that but
if you’re liking the video please subscribe and notified anytime I drop a
new video thanks eventually during some sometimes it may
not work out for you so you need to know that you could possibly lose your
property if you are not disciplined and paying off your home equity loan however
if you don’t use a home equity loan you don’t have to worry about that which you
won’t get the tax breaks all right the number two con it’s easy to fall further
in debt because see if you were paying 350 right and now you’re only paying a
hundred you have an extra two hundred fifty dollars to blow so what you can do
getting as a credit card okay or you know decide that you’ve got to have this
brand-new car right no that is not the time to start buying more things it’s
the time to take that money and allow it to make money for you or take that money
and save it which is in essence helping you make more money for you but just had
a slower lower rate okay so take that money and do something else with it
imagine that you’re still paying it to the credit card company and pay it to
something else that will help you make money all right that is the goal
do not get further in debt because then you’re in this huge spinning hamster
wheel cycle and you’re never going to get out the purpose is to become
financially free not always slaved to school being a slave to someone else all
right number three it will take a longer time to pay off so if you were paying
$350 it might only unless you’re only playing the minimum so you’re only
paying the minimum this is not true but if you’re only paying $350 and it only
take you maybe two three years to pay it all off when you go down to the hundred
dollars it may take you five six maybe ten years to pay it all off depending on
how much debt never croute okay so make sure that you think and remember that so
when you debt consolidate your payment time may be longer but if you’re okay
with that you can also pay it off quicker – so
they are every debt consolidation company has some type of interest or
some type of money that you have to pay on top of whatever it is that the
monthly payment is so if you have $100 they might change charge you one hundred
and seventy five dollars which is their fee
okay so it will behoove you it makes more sense to pay it off quicker if you
can so you only pay 100 you pay them 75 and maybe slide them an extra 25 to put
on maybe a higher interest credit card company or for the loan to be paid down
quicker and you can do that then go ahead and pay that $200 all right also
you can have interest rate issues if you get an unsecured loan meaning a loan
that does not say I’m a fixed rate for this amount of time all right then
those variable rates will generally bite you in the butt
because whatever goes down can also go up so you might be chilling cool paying
$100 $175 a month which is better than your $350 but three years into your
payment all of a sudden it blooms up to three hundred dollars and you’re sick
okay or four hundred dollars which is worse than what you were paying before
so make sure that you read the fine print
very carefully you asked tons of questions for all of your debt
consolidation loans or debt consolidation companies how much is it
going to cost for me to pay this will this rate change over time and how long
will it take for me to pay off my rate or my um my day so make sure that you
ask those questions because if you don’t you can end up with Hart eight later on
and you wish you would have asked them all right but by then it’ll be too late
you’ll be stuck in this huge huge debt and that’s basically what happened with
the home crisis right back in 2004 2009 where all of a sudden all of those
variable rates homes all of a sudden shot up and the
people didn’t have the money to pay because they didn’t think about that
they didn’t ask the right questions and you do not want to do that as far as
your credit card debt because course if it’s a home
quit alone you could lose your house all right or lose anything else or go into
chapter 11 or chapter 13 into bankruptcy which is not what you want to do for the
long haul also the last con is it can reduce your credit score temporarily so
you know that lovely 500 credit score by 50 credit score I came into when I first
started my debt consolidation program it dropped down to about 400 something
which was devastating okay because I have worked hard to get it to where it
was but you know now I’m sitting at 700 it’s beautiful but you have to think
about that when you are starting any type of debt consolidation program or
getting a debt consolidation loan it will drop your credit score and
depending on what program you use will depend on how far it will drop and so
you need to also ask that type of question you know how will this affect
my credit in the long haul and if your credit is already jacked up then you
know this might not be a question that you really care to ask but if you know
that you want to buy a house or a car in the next year then that’s something you
need to think about because your credit will drop and that will be a factor in
getting a home or a house that’s the same thing getting a home or car okay so
make sure that you think about that as well so hopefully this was a value to
you also last tip make sure that whatever it is that you are signing up
for is something that you can do something that you can afford something
that will work for you don’t like don’t look at the terms for where they are
right now will they change over time and can you handle that change if you can’t
then go with someone else do something else because this is your credit this is
your livelihood this is your freedom after all and if it’s something that you
cannot deal with honey run alright get all the information you need call
somebody ask somebody text me you know my information below huh is this a good
deal all right and you know I’ll ask you some questions or get you know ask the
debt consolidation people all the questions that you want to ask because
they are there yes to make money but they also will have a better they will
have a better program if they do right by their clients and since you are
potential clients you want to make sure that you get all the details that you
need all right or get somebody else involved to help you make that decision
all right so hopefully this was a value to you if it was make sure you give me
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hopefully that you will do that and I can’t wait to help see you be
financially free so until next time my friend make sure you think big dream big
take action so that you may

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