If you are having a difficult time catching up with your debts, take control of the situation right away and don’t be afraid to seek the appropriate debt help service. What kinds of services are available to you? Take a look at the following options and consider which one is best for you.
Credit Counseling. A lot of people get stuck in bad debt because of poor or incorrect management of their finances. Perhaps, seeking advice from a professional credit counsellor can help you handle debt repayment more efficiently and stay away from bad credit.
Debt consolidation. If you are juggling multiple debts from different creditors, then debt consolidation is a good option.Â Debts can be consolidated by enrolling in a debt consolidation program or by taking out a secured consolidation loan.
With a debt consolidation program, you will submit payments to the agency and the agency will be the one to distribute your payments to corresponding creditors. On the other hand, a debt consolidation loan is used to pay of all existing debts at once so you will only have to deal with one lender your debt consolidation company.
The debt loan consolidation subjects the borrower to a longer repayment term which can range from 5 years to 10 years or longer, depending on the amount borrowed. Because of the longer repayment period, the interest rate and monthly fees are greatly reduced.
Debt Settlement. You can also ask your credit counselling agency to negotiate with your creditors for a debt settlement. A creditor may agree to reduce half of the original amount of debt as long as the borrower agrees to submit lump sum payment at once. With debt settlement, a debt consolidation agency can provide the needed funds to settle all debts. Afterward, the borrower is subjected under the debt consolidation agency’s repayment terms.
Credit Card Debt Consolidation. If you own multiple credit cards and can’t keep up with your repayment, one way to deal with the situation is to take out a debt consolidation loan and pay off all your outstanding balances.
If acquiring a loan makes you uncomfortable, you may consider getting a balance transfer credit card with zero interest rate instead. The 0% APR may be offered for 6 months to 12 months, depending on the issuer. You can use that opportunity to transfer over your balances from your high-interest credit cards and focus on your repayment without incurring additional interest charges.
Take note that using any of these debt help services will only work if you take your new repayment obligations seriously. Submitting your payments on time is crucial if you really want to be debt free completely.