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Debt Consolidation


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Below are some basic financial strategies for do-it-yourself debt elimination. If you have any questions, please contact us. Let help you become debt free in 2007!

Assess your debts
Gather all of your financial statements and order a copy of your credit report. We suggest purchasing a 3-in-1 credit report so that you can see how all the credit bureaus are reporting for you. Learn more about 3-in-1 credit reports.

On a piece of paper make a list of all creditors and how much you owe. Also include interest rates and the minimum monthly payments required.

** When evaluating your debts, do not factor in your car loans or mortgages. These types of debts have long terms and lower APRs. You will be better off trying to eliminate those high interest credit cards and other unsecured debts first.

Determine what your budget is
Now that you have all of the information regarding your debts, you will need to determine what you can afford as a monthly payment, otherwise known as budgeting. The first thing you need to do is calculate what your net salary is (income after taxes). Then, add up all of your expenses. Don't forget to include living expenses like groceries, gas for your car, etc.. Subtract all of these expenses from your net income. This total is the amount you can afford for making monthly payments for eliminating your debt.

Formulate a plan
You have successfully evaluated your debt and determined what you can afford every month for payments. Now you need to make a payment schedule for your debts. Try using the example below. All of the monetary numbers are just examples. Try the formula with your own numbers.

- Monthly net salary (income after taxes)  $3,500
- Minimum required debt payments - $1,200
- Monthly expenses/cost of living  - $800
- The remainder amount should be used to pay the debt with the greatest rate and balance: $600

Use this same formula every month until the debt is paid off. Once that specific debt is eliminated. Begin paying the next highest debt, using the same formula above.

While using this do-it-yourself debt eliminating strategy, try and not incur any additional debts.

Try negotiating with your creditors
There is never a bad time to contact your creditors to try and obtain better rates and terms for your debts. There is a good chance you can lower your interest rates and/or even be able to reduce the amount that you owe!

Transfer your debts to credit cards with lower interest rates
Do some research by checking out some credit card offers with rewards. You likely can find a card that has a lower interest rate than your existing debt, also offering a 0% introductory rate. It is important that you do not exceed 40% of your limit in debt. If you do, you run the risk of damaging your credit.

Homeowners should take advantage of debt consolidation products
Star Loan Services offers several second mortgage options for homeowners looking to consolidate their debt. Learn more about the equity loans and refinance loans for debt consolidation that we offer.

Be consistent
Try your hardest to stick to your goals. Don't worry if you don't make your expected payment one month. However, the only way to get out of debt is to make make the maximum payments you can afford regularly and to not take on any additional debts.

It takes a great deal of mental strength and dedication to eliminate your debt on your own. For many people, this is just too hard of a task to handle. If you think that the do-it-yourself debt relief is not possible for you, please fill out a free request for our debt consolidation program. We can help you reduce your debt by as much as 60%, with lower interest rates and reduced balances.


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