Raising kids is a difficult proposition and doing it all alone on your own could make things incredibly difficult. Single mothers require balancing child-bearing and jobs, often without any assistance from any close relatives or friends to ease their burden.
And then crops up the issue of money. Single mothers may often owe money but they have access to many effective debt relief options. Single moms must consider evaluating these options meticulously for clearly understanding the effect that each one would be having on their credit score and overall finances.
Avail Debt Consolidation
If you have a number of debts, it is best to opt for debt consolidation by applying for an unsecured personal loan at a lower rate of interest or you can even apply for a business loan for women which are specific loans options available only to women who own a business. Once you get the loan approval, you could pay off all your outstanding debts. You would just need to make a single manageable repayment every month instead of keeping track of multiple accounts and bills.
Borrowers who are not able to get an unsecured debt consolidation loan could opt for consolidating their debts with an effective home equity loan. However, keep in mind that it could prove to be risky for single mothers. Your house would be at stake since it would be serving as the collateral and if you start defaulting, you and your kids may end up losing your home. So here are a few common debt consolidation mistakes that every single mom must take note of and avoid. Browse through toptenreviews.com for detailed information.
Mistake No.1: Following a Friend Blindly
Just because debt consolidation worked for your bosom friend, it does not automatically mean that it would be just the right thing for you. Personal recommendations are often valuable but do not make a wrong choice just because your friend had a good experience. There is no guarantee that what worked perfectly for your friend would do the same in your case. You must appreciate that you and your close friend would be having different financial capacities and aspirations. Remember your priorities are bound to differ from your friend’s. So, think wisely before making the right choice.
Mistake No.2: Taking an Impulsive Decision
Often single mothers are so desperate for a change in their financial scenario that they take an impulsive decision and commit to it without enough deliberation. You may have opted for debt consolidation assuming it to be the most effective solution for you. But then you soon realize that you are not able to make the necessary payments every month. Be realistic and keep your financial status in mind. Choose a debt consolidation loan only if you are sure that you have the capacity to make the payments timely every month.
Mistake No.3: Not Doing Adequate Research
It is essential to do a thorough research online. You must compare all available options and do a meticulous research about all debt consolidation loan providers. Understand clearly that an unsecured debt consolidation loan would be requiring a really strong credit score for eligibility. If you have a home to offer as collateral then you may get a secured debt consolidation loan easily. Explore other debt relief options such as debt settlement, credit counseling etc. and examine the pros and cons of each option. Be sure to evaluate carefully and choose the right option. You may seek expert advice in this context.
Once you have decided to opt for debt consolidation, you must not rely only on one provider. You need to examine the fees, rates, behavior etc. of a number of debt consolidation companies and make the right choice. Moreover, you need to identify the root cause of this financial mess. Once you know the cause, make it a point to address the issue and if necessary make some lifestyle modifications too. Stay away from the mistakes discussed above if you wish to reap the benefits of debt consolidation.