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Questions About Debt Consolidation Reviews

greenpath debt consolidation reviews?

Does anybody have any comments about Green Path debt consilidation?

Industry Expert answers:

Check with the FEDS on this one… There were literally THOUSANDS of these companies that are being brought up on federal racketeering and other charges very recently.

The best place to check is with law enforcement and the Better Business Bureau… Not here..

Need help With Debt Problems?

I would like to pay off my debts and consolidation is not really my kind of thing at the moment. what are my options and probably review sites that can use to make some choices

Industry Expert answers:

You are going to hear a lot of people post answers about a guy called Dave Ramsay. While his advice might work for people with no impulse control, it is probably not great for most people.

He proposes you pay off the smallest debt first, then the next smallest, etc, while making minimum repayments on the other debts.

This sounds good, but it’s flawed. He ignores the interest rates, which are what are actually hurting you. While some people feel good paying off a little debt, sometimes that little debt was relatively harmless, and they have massive debts at a much more menacing interest rate. Certainly not an ideal situation.

You need to write all your debts down, and the interest rates next to them. Pay minimum repayments on all the debts. On the one with the highest interest rate, pay whatever extra you can. It is your priority to get rid of the high rate debts first, because they are costing you the most per dollar owed. You cannot afford to have those loans sitting there accruing interest for any longer than is necessary.

For example, if you have 3 debts, as follows

$10000 at 19%

$3000 at 20%
$2000 at 5%

Dave ramsay would say get rid of the smallest one, but that’s only costing you $100 a year. The loan for $3000 is actually costing you $600 a year. And it’s only a grand more than the smallest one. And the $10 000 loan at 19% is all the while costing you $1900 a year in interest.

Can you see why the interest rate is so important?

This strategy is in every personal finance book I’ve read. It is the cheapest and fastest way to clear the debts, because it removes the biggest obstacle (the higher interest rate debts) earlier so that you spend less money on interest. Your money will work more efficiently if it is not being spent on interest. The Dave Ramsay strategy is only in books by Dave Ramsay. It might make you feel like you’ve achieved something if you pay off a little debt, but if you have higher interest rate debts at larger amounts, you’ll be paying them off longer than you would if you were putting your extra money on those high rate debts at the start.

So put all the debts on a piece of paper. Write down the interest rates. The highest interest rate debt is what you pay down first, while making minimum repayments on the others. When that highest rate debt is clear, move onto the second highest rate debt, taking money from your budget that was initially going on that first debt, and putting that on the next one.

Try to transfer some debt from higher interest rate cards to lower interest rate cards if possible so that you have the minimum amount owing at higher interest rates. The lower the rate, the safer that debt is. So get rid of the high rate debts first, and you’ll get on top of your debt faster and be debt free sooner.

Check out your local library for some good books on personal finance. It’s free, and they often have consumer help organisations information in the back.

Good luck with the debt.

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