Don’t be ashamed if you need to take a debt consolidation loan. You’re far from alone in having financial troubles. In fact, some of the largest and most important corporations across the country are struggling to pay their own bills. There’s a difference between them and individuals, though: The corporations often get huge amounts of government help. Individuals? They usually need to turn to relief sources such as debt consolidation loans to erase their debt.
Fannie Mae in Trouble
Consider the case of mortgage financing giant Fannie Mae, a quasi-government agency. The company reported a net loss of $11.5 billion in the first quarter of 2010. That’s a lot of money to lose, but it actually ranked ahead of the fourth quarter of 2009, when Fannie Mae suffered a net loss of $15.2 billion. Fannie Mae officials did what you’d expect a suffering corporation to do: They asked the federal government for help. The acting director of the Federal Housing Finance Authority has asked the U.S. Treasury Department to send $8.4 billion in financial aid to Fannie Mae by the end of June. The government’s reasoning is that Fannie Mae is too important to fail. The company finances a huge number of mortgage loans each year. If Fannie Mae were to go under, the country’s housing finance industry would certainly implode.
The Fannie Mae case is an interesting one, though, because it points out a fundamental difference between the way individuals and corporations handle debt. Corporations have no trouble asking for help. Individuals, though, often feel immense guilt over falling into debt, even if outside circumstances such as a job loss, serious illness or a cut in annual pay helped cause the debt. For many consumers, taking out a debt consolidation loan, filing for bankruptcy protection or asking family members for financial help is a source of shame. It’s a sign that they’ve failed. Most corporations happily take their federal relief money and go about their business.
An Attitude Change
Consumers need an attitude change. They need to realize that falling into debt can happen even to the most frugal and cautious among us. After all, no one’s job today is safe, not with the national unemployment rate still hovering near 10 percent. If you do need the help of a debt consolidation loan, don’t waste time feeling guilty for your debt situation. Instead, spend time researching debt consolidation companies so that you don’t end up paying too much in interest rates and other fees. And prepare yourself, too, for the hit that your credit score will take. Once you take on that consolidation loan, it’s time to start planning a strategy to rebuild your ailing credit score.