Are Fear and Embarrassment Holding You Back from Consolidating Your Debt?

If you’re in over your head in debt, you may hold back from doing anything about it. Is it fear? Is it embarrassment or a bit of both? In a world where we broadcast just about every aspect of our lives online, debt is one area we don’t speak about even in person.

We look on as we think others are ‘successful’ not knowing the truth behind the perfectly chosen pictures. The fact is the average consumer has $23,800 in consumer debt, not including the mortgage.

If you’re ready to do something about your debt, but worry about fear and embarrassment holding you back, read on.

Think about What’s Holding you Back

It’s important to understand what holds you back. Ask yourself these questions:

  • Are you afraid you won’t qualify for a debt consolidation loan?
  • Do you worry you’ll rack up credit card debt again once you consolidate your debt?
  • Are you afraid of the commitment of a larger monthly payment (but with less interest)?

Knowing the reason for your fear will help you take the right steps. It may help to talk it out with a counselor – someone who can help you understand why you’re in the position you’re in and what you can do to get out of it.

Once you’ve discovered your ‘why,’ it’s time to take action.

Step 1: Pull your Credit

If you aren’t sure of your credit score, find out. Get a free copy of your Equifax and TransUnion report and evaluate it. Your credit score will help you understand your debt consolidation options and what debt you should consolidate.

Step 2: Explore your Options

Look at your options for debt consolidation. Depending on your credit score, you may have many options or only a few. Either way, look at the bottom line of each solution. Know the total interest paid and how long it will take you to get out of debt.

Compare the bottom line to what it would cost if you continued with your current debt load, handling it the way you are right now. Will you save money in the end?

Step 3: Know what you can Afford

Don’t jump at the first debt consolidation option you find. Look at the big picture. First, ask yourself, can you afford the loan? Think not only about now but a couple of years down the road.

Do you foresee any changes in your income? Will you change jobs, go from a two-income to one-income household, or have any other changes? Debt consolidation should be a long-term solution, not a short-term fix.

Step 4: Choose your Option and Consolidate your Debt

The final step is to finalize your option and go with it. Consolidating your debt should free up your monthly income and save you money over the life of the debt. The key is to get out of debt and not get back into it, which is why working with a debt consolidation company with professional counselors may be the best choice.

Go slow when consolidating debt. You want a solution that will give you financial freedom and not just put a Band-Aid on your financial crisis. Think of it as improving your finances for the long-term, setting you up for financing success.