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Should a Christian get a debt consolidation loan?
This has become an interesting topic of debate over
the past few years. On one side of the debate are
those that say that a Christian should manage their
money faithfully, and therefore should not need a
debt consolidation loan. The other side of the debate
says that even a Christian can lose their job and
get into financial trouble, and for many a debt consolidation
loan is a wise financial decision.
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Of course there is no right answer in this
debate. Both sides make valid arguments.
If your financial problems are caused by excessive
spending, and now you are looking for Credit
Card Debt Consolidation, it is probably
true that a debt consolidation loan is not the
first step you should be taking.
However, if you have lost your job or had a
medical problem that has put you behind, as
a Christian a debt consolidation loan may be
a good idea.
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How should a Christian decide whether or not to
get a debt consolidation loan?
The first step is to not confuse the result with
the symptom. Ask yourself why do you need a debt consolidation
loan? Is it because your spending is out of control?
That question can best be answered by putting yourself
on a budget. Starting today, keep track of every penny
you spend, and have your spouse do the same. After
one month take a look at your spending, and divide
all of your spending into "wants" and "needs".
If you find that most of your spending is on wants,
and not needs, you have a spending problem.
For the second month reduce your spending only to
essential items, and see how much money you now have
to service your debts. If you can reduce your expenses
to the point where you can service your debts on your
own, that is clearly the best option.
And this is really the key point. A debt consolidation
loan is not always the solution. Sometimes consolidating
only serves as a Band-Aid on your spending problem.
As a Christian, you want to develop a realistic and
balanced budget that will allow every debt to be paid
in full if possible (Proverbs 16:9). Your goal should
be to retire your debts (Psalms 37:21, Proverbs 3:27-28).
Then, don't get into any more debt, including bank
and personal loans, and cut up your credit cards if
you are unable to pay them off each month (Proverbs
24:3).
If your spending is under control, a debt consolidation
loan may make sense if it helps you reduce the interest
you pay, and therefore get out of debt faster.
If you are now working at a good job, your credit
may be good enough to allow you to qualify for a lower
interest rate on a student loan consolidation loan,
which reduces the interest you pay, making it easier
to repay your loan faster. Mortgage
Debt Consolidation is often a good way to accomplish
that, because a mortgage usually carries the lowest
possible interest rate.
Your goal as a Christian should be to get your spending
under control first, and then decide if a debt
consolidation loan is the correct solution for
you.
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