Handling the Debt you Have
If you have existing debt, then debt consolidation or debt settlement may be an effective option, depending upon the specifics of your debt situation. With debt consolidation, you?ll be taking out a loan for the full amount you owe, and then making one monthly payment instead of several. This is particularly useful for dealing with your highest interest debt, usually credit card debt, because the interest rate on your consolidation loan is typically significantly lower.
With debt settlement, you?ll be depositing money into an account created specifically for debt payoff, while the debt professional you?re working with negotiates your balances down with your creditors.
Remember, you want to leave yourself considerable lead time on both of those processes. That way, you can make some payments to your consolidation lender or pay off a good portion of the debt settlement agreements, reducing debt ratios. Furthermore, you also have time to start working on your credit report. Your credit report is likely to have been impacted by the debt you were carrying, so leaving sufficient time to have as many positive entries as possible, like making all payments on time, is smart. That way, you are in a better position when the time comes to seek financing for your start-up.
Growth Unencumbered by Excessive Debt:?The same basic principles apply if you are considering being more aggressive in terms of the growth and expansion of your established businesses. High debt ratios make finance people nervous, probably even more nervous than they make you ? and with good reason. Growth is stronger when unencumbered by heavy debt obligations. For an entrepreneur, understanding debt management and its implications regarding financing opportunities and business health is essential. Seek financial advice from a professional to guide your through your debt-related decisions until you are confident that you have a strong working knowledge of these issues.
Content Courtesy of www.Debt.org, America?s Debt Help Organization
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