How to Consolidate Your Debts in Florida - Upsolve (2024)

1. Collect the Details About Your Debts
2. Determine Your Monthly Income
3. Put Together Your Budget
4. Do the Math
5. Review Your Florida Debt Consolidation Options
6. Apply for a Florida Debt Consolidation Loan
7. How to Stay Current with Payments After Consolidating Your Debts in Florida

Collect the Details About Your Debts

Before you can consolidate your debt, you’ll need to determine whether your financial situation can support a reliable Florida debt consolidation loan payment each month. It’s generally a good idea to begin this process by assessing your debt. Gathering detailed information about your student loans, credit card debt, auto loans, personal loans, existing home equity loans, and other debts will not only tell you important things about your finances generally, it’ll save you time and energy when determining which debts to consolidate. A good place to start gathering this data is your credit report. You can request a free copy of your current credit report and credit score online in just a few minutes. This document will break down what you owe and who your creditors are. The only debt that won’t show up on this document is personal loans from family members or friends, so you’ll need to account for these yourself.

Determine Your Monthly Income

Determining whether your monthly income is sufficient to cover a consolidated debt payment isn’t always as easy as comparing your income to your expenses and current minimum debt payments. Yes, you’ll need to complete that comparison once your expenses are accounted for. However, you also need to examine your income carefully and consider whether it’s reliable enough for you to make your consolidated loan payments on time. When gathering information about your income, take pay stubs and other income-related receipts from the past few months and evaluate each in turn. Which sources are reliable and paid at the same time every month? Which sources are more irregular? If you can’t pay your consolidated loan payments every month, on time, you may benefit from looking into other money management and debt relief options. Unfortunately, debt consolidation doesn’t always work well for those individuals who have more irregular income than regular income.

Put Together Your Budget

Now it’s time to assess your household expenses. Before you factor in your minimum monthly debt payments and compare that figure to your monthly income, you need to budget for all of your fixed, unfixed, and irregular monthly expenses. Leaving any predictable expenses out of this budget will leave you with an incomplete picture of your finances. Therefore, it can be helpful to sit down with your bank statements and credit card statements for the past few months so that you can be clearly reminded of how much you spend, what you spend your income on, and when during the month (or year) each expense arises. Fixed expenses are easy to note because they don’t change from month to month. Unfixed expenses, like food and gas, occur each month but change based on your circ*mstances at the time. Irregular expenses happen every year but not necessarily every month. Add up how much each expense costs you annually and divide by 12 to get your monthly budget figure for that expense.

Do the Math

You now have detailed snapshots of your income, expenses, and debts. It’s time to place this information in context so that you can make an informed decision concerning whether debt consolidation is a good option for you. Start simply by examining your income as compared to your expenses and minimum existing debt payments due each month. If your income is the larger figure of the two, then debt consolidation may still be worthy of your consideration. In addition to making your payment schedule easier because you’ll only need to make one debt payment each month for the accounts you consolidate, refinancing can help you to secure a better interest rate, and to bolster your credit over time. If your reliable income doesn’t stretch to cover your monthly expenses and debt payments, you’ll need to assess how great the gap between these two figures is. Debt consolidation will likely help you save on interest and will lower the amount you pay monthly on the accounts you consolidate. But if your debt is so overwhelming that your income won’t stretch to cover your loan payment reliably, you may need to speak with your credit counselor about alternative ways to manage your debt and build your credit over time.

Review Your Florida Debt Consolidation Options

You can either consolidate your debt by securing a loan and using it as a balance transfer to pay your existing debts or you can enter into a debt management plan. If you decide to take out a loan, you’ll have many types to choose from. Because secured debt agreements usually feature low-interest rates to begin with and/or serve as long term investments, it usually makes sense to consolidate your unsecured loans and other unsecured debt only. As a result, applying for an unsecured debt consolidation loan with a low-interest rate and low origination fee is likely your safest, most reliable option. However, you can opt to use a personal loan, home equity loan, credit card balance transfer, or an alternative loan option if that makes more sense for your circ*mstances. For example, if you already have poor credit and securing a loan will be difficult but your family is willing to advance you the money to pay off your debts, this arrangement may be preferable to taking out a traditional loan.

Apply for a Florida Debt Consolidation Loan

Before you apply for a debt consolidation loan, it’s important to remember that this process is different than debt settlement. If a debt-related offer asks you to pay portions of your debt in exchange for forgiveness of the remainder, that’s a debt settlement offer. Because so many scammers try to convince consumers to enter into debt settlement agreements, it’s important to research the reputation of your lender and to double-check that your loan terms and origination fees are fair before you sign a contract or transfer fees to an organization. The Better Business Bureau and the Florida attorney general can provide you with valuable information about a lender’s reputation and whether it offers legitimate debt consolidation services or debt settlement scams.

How to Stay Current with Payments After Consolidating Your Debts in Florida

When many Americans consolidate their debt, they experience a feeling of overwhelming relief followed by overwhelming panic. This is normal. Once you’ve experienced financial challenges, it’s easy to worry that you’ll find yourself right back in debt just a few months or years down the road. Thankfully, there are things you can do to better ensure that you remain “on top” of your consolidated loan payments until your total amount is paid. First, make sure to schedule your payment due date at a time of the month that works for you. Second, keep revising the budget you recently made as your financial circ*mstances evolve. That way, you can anticipate financial ups and downs and you can adjust your finances to fit the needs of the day. You may even want to create incentives for yourself. Perhaps consider setting aside $15 every month so that when you make your payment early, you can treat yourself to a movie.