Debt relief programs have become a popular way to reduce monthly payments and get rid of excessive debt. Once you approach your senior years, getting rid of debt becomes a priority. Loan consolidation is a viable option for debt relief.
In this article, we will discuss and compare various debt relief programs. In addition, we will see what affect a debt relief program will have on your credit. You will be able to determine if this is a good solution for your circumstances. First, let’s define what a debt relief program is.
What Is Debt Relief?
A debt relief program does not eliminate all of your debt. However, the amount you are paying each month will be reduced. This is accomplished when the program negotiates with your creditors and a settlement is agreed on. You will end up paying less than you actually owe and interest rates are no longer accrued.
Consolidation Loans and the Power of Debt Relief
A consolidation loan is a type of personal loan that helps you to consolidate all your debt into one lower monthly payment. This can help reduce the stress of having multiple bills coming in every month and it will simplify your budget. The best part about this kind of loan is that it also offers you debt relief, which means if you are struggling to pay off other loans or credit cards, then you can fix the issue with a consolidation loan. You should speak with a financial advisor before taking out any new loans so they can help determine if getting a loan for debt consolidation is the right choice.
What Type of Debt is Included In Debt Relief?
The type of debt included in a debt relief program is any unsecured debt you have. For example, credit card debt, medical and personal loans. Generally, you must have debt in the amount of at least $7500 to qualify for a debt relief program. Each program may have their own qualifications.
Will It Affect My Credit?
Enrolling in a debt relief program will have an effect on your credit score. Initially, it will create a negative impact which is something you will want to weigh before deciding to enroll. If you are experiencing anxiety over monthly payments, then taking a hit on your credit may be worth it to you. If you are having trouble making those monthly payments individually, your credit score is going to be affected regardless. However, over time your credit gradually improve.
Debt Relief Programs
If you decide to go with a debt relief program, make sure you go with a reputable one. There are a number of good programs available if you decide this is the way to go for your situation. We will take a look at a few of the top rated ones for you to compare.
Top Rated Program
One of the top rated debt relief programs comes from National Debt Relief. In fact, it is actually number one in this field. The Better Business Bureau has accredited this program with an A plus. It has been in business for more than ten years. They currently have more than 100,000 customers. If you decide to go with a debt relief program, this one is a good choice.
What’s Good About National Debt Relief?
There are no fees to pay upfront to get started with National Debt Relief. Their staff is polite and very capable of answering any questions you have. They are actually certified debt advisers. You will be asked about your debt and will discuss with you a plan for debt relief. Your options will be described to you. Ask plenty of questions and let them help you make a decision.
How Much Will I Save?
The amount you save will depend on the amount of debt you have. Obviously, this will vary from client to client. They will negotiate with your creditors to pay off your debt for less than the amount you owe. For example, instead of making 5 or 6 monthly payments to your creditors, you will make 1 payment and the program will distribute the funds for you. The process is not complicated and the result can bring relief.
Use CuraDebt to Manage Financial Goals
CuraDebt is a web-based debt relief service that is tailored specifically for those that have outstanding debt with credit institutions and is a great option for those that need personal debt relief or business debt relief. When you first visit the CuraDebt website, you will be given a free consultation. This is so that they can get a better feel for your situation and decide the best course of action to help relieve your debt.
Help To Reach Financial Goals
CuraDebt will help you to reach financial goals by giving you access to a support staff of highly competent professionals that have helped many others with their debt, and will be more than happy to help you as well. They will ask you what you wish to accomplish with your credit and they will do everything that they can to ensure that you get there. Here are some services offered by CuraDebt:
- Counseling Services For Debt Management
When you start the process of using CuraDebt to help manage your debt, you can expect them to send you an email containing information about who it is that will be assisting you and working on your case with you. Also, expect a phone call. The person on the other end of the phone is an experienced professional that is calling to hear your side of the story. This is when you explain to them your financial situation and what it is that you expect from them, to be able to help you. It’s very important that you are honest during this step because this will be how they figure out which services you need and how they can help you best.
How Debt Consolidation Can Help Relieve Your Debt
For best use of your loan consolidation funds, make a spreadsheet of what you owe. Make sure you include:
1. Total debt owed
2. Current minimum payment
3. Total length of payments at the current rate
4. Interest rate
Make sure you set up your spreadsheet with headers that you can sort by. Part of the work of debt relief is deciding how much financial pain you can take for the shortest amount of time.
Determine Your Greatest Need
Why are you looking for debt relief? If your loan consolidation requirement is related to being payment poor, sort your list by the minimum payment due. Too many payments can make even a manageable amount of debt a heavy burden because no matter how much you bring home, you’re always broke.
If you’re looking for a loan consolidation because your interest rate is too high, consider visiting with a loan officer at a local credit union for debt relief. Be aware that your credit union may require you to take a class or set up a payment account with them to get real debt relief. The process may take time. However, at the end of your debt relief training, you will not only get a break from high interest rates, but you will know how to avoid this debt in the future and may even have a savings account.
DIY Loan Consolidation Plans
If you can use a credit card that offers 0% APR for your own loan consolidation program, you can reduce your payments and the overall interest you pay. However, this can be tricky if you aren’t able to put your credit cards away.
To start your own personal loan consolidation and debt relief program, start with a hard spending freeze. Go through your emails and delete subscriptions to store cards, regular coupons that push you to spend, and any other triggers that cause you to make poor financial decisions. If you ever get home from a shopping trip and feel guilty, you have been tricked into spending.
The simplest way to start this is to go back to cash. With cash, you can buy groceries but you can’t order prepared food for delivery. You can buy necessary clothing in person, but you can’t order online. You can still put gas in the car. Give yourself a short timeline of two weeks and only use cash. Let the cards breathe a bit.
The Art of Consolidating
Now that you know you can do a hard cash reset, you can DIY your loan consolidation plan onto the loan. If you’re using credit cards, you want 0% APR cards that will give you at least 12 months to pay off. Before applying for a new card, call your current cardholders to see if they have any offers. Once you know your limit on this deal, go back to your spreadsheet.
The “snowball” method of debt relief means that you sort your debt by the smallest total amount owed. If you are very payment poor, you can alter this a bit and sort by the minimum payment due. If interest rates are the problem, use the “avalanche” method and sort the list by the highest interest rate. Roll as many debts as possible, according to your greatest need, onto your consolidation loan.
When There’s Money at the End of the Month
If you’ve had a lot of month left at the end of your money, it may tempt you to get a little wild. Chronic money stress is exhausting, hard on relationships and really tough on your family. However, remember that you have a goal and your time to reach it may be limited.
If you’ve got a 12 month loan on a 0% APR card, consider short-term fixes you can do for the next year to improve your finances. Could you get another job, get a roommate, or sell some things that aren’t serving you? If you have children, see if you can tap into their competitive spirit to come up with free ways to have fun as a family.
Consolidating your debt can be an effective way to lower your stress. However, crawling out of a financial hole is never easy. If you are looking for help and seeing offers of easy ways to do this, keep an eye out for scammers. Talk to a credit union professional if your credit rating is low enough that you can’t do a DIY consolidation. The short term pain will be worth it.