Sure, there are millions like you in the United States, struggling to get over their debts. Some come out of it through sheer self-discipline and perseverance, while others fall by the wayside. Which category do you want to fall into? The former, of course!
You’ve made the right choice, because there are ways that can change your situation from negative to positive. And to do that, you must consider what’s called Debt Consolidation.
What is Debt Consolidation?
Debt consolidation refers to the process of consolidating all your debts together into one account, so that you make just one monthly payment to one Debt Management Company.
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Get Started Now!You may be able to resolve your unsecured debt once and for all through debt consolidation. Call us today for more information and to see if you qualify! CALL US (1-888-397-7546). Debt Consolidation Benefits
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How Does Credit Card Debt Forgiveness Benefit the Lenders?
There are many benefits to Debt Consolidation, so in your situation it’s best to consider it as your only option. Here are a few reasons why:
- You make just one monthly payment
- Pay towards debts you know you can afford to
- No longer do you need to juggle several debts among several lenders
- You know just how much your debt is going to cost you per month
- You have a lower Annual Percentage Rate (APR)
- You can repay over a much longer period, leading to lower monthly amounts
- It helps you to be stress-free
- It keeps you from making no payments or delayed payments which can lead to a low credit score, high interest rates or legal issues
- You can now throw away all your credit cards and cancel all overdraft facilities
When should you consider Debt Consolidation?
If credit bureaus find that you spend more than half of your available credit each month, they will conclude that you don’t have enough cash for your expenses so you use credit cards. This will render you a high credit risk candidate and will lower your scores automatically by about 70 points. If this happens to you, go in for debt consolidation immediately.
If you’ve been missing more than one monthly payment or use several credit card companies, your creditor will raise the interest rate dramatically. If you are just about able to make your minimum payment and are spending a lot in fees and interest, it’s the right time to go in for debt consolidation.
How to consolidate your debts: Here are some ways of consolidating your debts…
- Shop around for the lowest interest rates available
- Aim to pay off the largest debts on your credit cards with the highest interest rates
- Keep your current monthly installment
- In order that you don’t miss out on payments, go in for auto payment
- Debt consolidation loans
- Debt management plans
Apart from the above, you can also try these options:
Debt Consolidation Services: You can approach a debt consolidation company, a bank or a non-bank and finance company (NBFC) for Debt Consolidation Services or Debt Management Plans (DMP).
Debt consolidation companies offer their services through their financial counselors who examine your finances, spending habits, debts and liabilities and suggest suitable consolidation programs that can meet your needs while you also pay some portion of your debt each month. Over time, you will pay off your entire debt and start leading a financially disciplined life.
Services offered:
Negotiations and loans: These companies negotiate with all your creditors on lowering interest rates for you. A negotiated amount means that you now have to pay towards a single loan, which is lower than what you initially owed several creditors. Of course, this applies to your unsecured debts.
Settlement: Sometimes, debt consolidation companies will negotiate to settle for a fixed amount that’s lower than the principal amount. It is settled that you will pay this entirely in one payment or through fixed monthly installments.
Debt Management Plans: These are debt consolidation services specially meant for credit cards, medical bills and collection accounts. They are repayment plans, which these experts put together for debtors so that they can pay off their debts without taking a loan for the same. They look at your income and expenditure and figure out a comfortable figure that you can pay each month.
They are the middlemen between you and your creditors and also handle all the paperwork and distribute payments amongst them. With a Debt Management Plan, you can reduce or negate interest rates, stop any late fees, and therefore reduce your monthly payment.
If you are extremely hard up financially, you can get a lowered fee structure. You can contribute “Fair Share” to the agency to manage a Debt Management Plan, about 1%-5% of your monthly payment.
Debt Management Plans are fixed for a 36-48 month period. You need to compile a full list of creditors in order to enroll, and also submit your social security number. By enrolling in a Debt Management Plan, you do not impact on your credit score positively or negatively.
If your account is not enrolled in a Debt Management Plan, it is deemed to be closed. Once your account is closed, you register a fall in credit score. If you have an open trade line on your credit report with a balance lower than half your available credit line it shows you have good credit.
Benefits:
- By paying consistently each month, you can repay your balance faster.
- Your debt collectors will stop harassing you.
How to choose a good debt consolidation company:
There are a few parameters for judging a good debt consolidation company, which are:
- Go online and check out the Better Business Bureau records for the credentials of the debt consolidation company you’re considering. You can also look up The National Foundation for Credit Counseling (NFCC).
- Does this debt consolidation company share a good relationship with creditors?
- Does your debt consolidation company help you by offering you various payment options if you can’t pay your monthly installments?
- If you opt for debt counseling, you can take free advice from a good debt consolidation company to pay your debts easily within a set period.
- Speak to friends and relatives for their opinions.
Once you are fully convinced of your choice of a debt management company, don’t waste any more time. Just call _________________ and make an appointment now. After all, if you want to be debt-free, you should start as soon as possible.
