Debt Consolidation is a term of living nowadays where a person take a different debt assistance plans to pay off one or multiple debts. This is a common way-of-living today in order to survive where living expenses is way higher than your passive incomes. Basically it means “you borrow money from person A to settle the debt of person B/C/D, but the person A will charge you an percentage interest for the money he lend with 1-2 years instalment, means you can pay the person A by monthly based on your agreements”. for a simpler understanding:

drowning-with-debtYou: in debt about $20000 to person B/C/D
Debt Consolidation Company: Lend you $20000
You: you pay person B/C/D $20000
Person B/C/D: no more debt
You: now you in debt to Debt Consolidation Company in $20000
Debt Consolidation Company: let you pay in 12 months instalment with 10% interest.
You: now you in debt to Debt Consolidation Company in $22000, you need to pay at least $1800 per-month to the Debt Consolidation Company.

This solution sound perfect, you can combine the debt into single debt settlement only, however debt consolidation sometime will worsen your debt situation, according to recent research, the debt will increase due to unhealthy and unbalance overspending and underspending symptoms. You might taken a second load from other debt consolidation company to pay off the first one. Most financial coaches will not recommend taking a debt consolidation solution unless there’s no other way.

Some debt consolidation company might lure or attract you to take longer instalment but with higher interest rate. For example, 24 months instalment with 25% interest rate, now from your original $20000 debt will add up to $25000 but with lower monthly payment, about $1040 per-month, sound tempting right? in truth its not, in the end you will need to pay $5000 more.

Read also: Learn more about debt consolidation

Be careful when dealing with debt consolidation

If you have apply for large mortgage loan or a loan secured against an asset where you mortgage either your house or properties to extend your financial needs, be sure to keep track of your financial flow so you will be able to make the loan payment back each month. If anything goes wrong, you might loss more money if the bank or debt consolidation company decided to take legal action and follow up with confiscation of your loan mortgage’s property. In general, this is how the lenders make money off the unsolicited borrowers.

Solution: Plan carefully for future debt payment

Nothing wrong for you to take a loan to help your current financial situation but you need to plan ahead so you will be able to payback the loan in time without extending further. Here are some helpful tips to help you:

Part-time or second job
You might work at day but try taking a second or part-time job at night or any time you are free. You can find work such as walk the dog, babysit, night cleaning job, 24-hours shop outlet that need worker by night and many other night job opportunity options.

Wise Investments
If you have some extra money, invest on food related business. true story: a friend of mine is in debt, decided to invest his extra money into another friends’s food truck, basically selling burger and chips to local residents. The investment proven wise since he got an extra $800 per-month from his $2000 investment. in 3 months, he will start gaining profit from the investment.

High risk investment: although not recommended but stock investment is highly profitable and the return of investment (ROI) is substantial if you know how the share stock market will work in your benefit.

Take a high commission work gig
If you’re a sweet talker, basically a born sells man/woman, then take a high commission second job such as door-to-door salesman, property seller or insurance agents in your own free time.

Online work
There’s ton of work you can do online, you can either coach people on building website, if you’re a web developer. You can write an article and sell it to interested parties, if you’re a writer.

Rising online money making method: site flipping, basically taking an undeveloped website and develop it and sell it. According to flippa sellers, they sometime see a 300% profit from their investment. example: purchase an undeveloped website for $2000, hire someone ($500-$1000/month) to developed it for 3-5 months, and finally sold it around $25000.

$2000 + ($1000x5) = $7000 - $25000 = $18000 profit / 5 months = $3600 per-month profit

In conclusion, plan you future financial gain before taking the debt consolidation solution so you won’t drown in debt in the future.

Want to Avoid Taking Debt Consolidation, Need Alternate Debt Solution? KS Businessonline money making, making money online, debt solution, debt consolidation solutionThe ugly truth about debt consolidation, you need to consider other alternate debt solution before taking a debt consolidation solution, control your own financial flow in the future, here are few tips.