3 Secrets To Combatting Debt
Friday, November 27, 2020, 6:00 AM | Leave Comment
Debt settlement vs. Debt consolidation is difficult, but it should not be made without careful consideration. They both have benefits and drawbacks.
It’s helpful to seek consolidation or debt settlement advice from a financial professional who can help you sort out the advantages and disadvantages.
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Consolidation
As you research your options, you will see that debt consolidation is the better choice if you have several credit lines that have become unmanageable.
Consolidation lowers the number of lenders you will owe and reduces the cost of your monthly payments into one small lump sum that you can afford to make each month. This typically involves taking a new loan out with a relief company to have them to negotiate on your behalf to your current creditors. But it might be hard to find a decent interest rate if you are deeply in debt.
When you compare debt consolidation loans, you will need to evaluate each company. You will want to know the fees that will apply and how much your monthly payment will be. You will also need to decide between a secured and an unsecured loan. Some companies will charge extra fees if you are unable to make your loan payments.
Once you have found a company that offers a debt consolidation loan and offers a reasonable interest rate, you will be able to begin paying off the smaller loans. The payments will be more affordable, and your payments will be made over a longer period. Sometimes consolidation loans can remain on your credit report for years, so be aware of this.
A consolidation loan is usually made by a lender or an institution and not a bank. You will not have to have good credit to apply for one. Once you apply, the loan will be approved, and you will be responsible for repaying your debt over some time.
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Settlement
If you are unable to manage your payments each month, then you may consider debt settlement. A debt settlement plan involves working with a debt relief company of your choice to get your current creditors to settle the debt for less than what you owe in a single lump sum. Does debt settlement work? For some people, it does.
Depending on which company you go with to negotiate your settlement and their internal practices, it could leave others more deeply in debt. And then there’s the debt settlement credit impact – when your accounts become delinquent; your credit rating will be damaged, making it hard to apply for credit, loans, and credit cards for many years.
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Protect Yourself
The best way to find the right company for you is to look online. You will find that there are many companies on the internet. Be sure to do your homework and ensure that the company you are considering will offer a good interest rate and reasonable payment terms. You may even want to talk to the company’s staff to ask questions about the services and fees. If they can offer you references, this will help you feel more confident in their ability.
Although it may seem like having to resort to either settlement or consolidation seems like a loss, you can turn it into a win for you and your finances. Companies like Alleviate Financial certainly show you that what you see is what you get.
If you’ve been relying on credit to get by, having financial advisors like this on your side could be precisely the kind of coaching you need to alleviate your current woes and reevaluate spending habits. A simple Google search will show you how flooded the debt relief market is with tricksters and hucksters. Don’t let a good find go to waste.
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