It is common for people to take loans. Look at the economy, it is not in a good condition, and a lot of people live from hand to mouth. And in such a scenario they have no option but to take a loan.
Everyone takes loans, from students to entrepreneurs, but not everyone can pay loans back in time,
When you’re in debt and paying monthly payments through your income, you are soon out of money before the month even ends. To avoid this from happening, you can go for one effective solution: a debt relief program.
Debt relief programs serve as a way to reduce, slow down or even eliminate the debt you owe.
Here are 4 debt relief programs to know about:
1. Debt Negotiation.
This debt relief program involves getting in touch with the lender and negotiating the amount of debt you owe. Here, you pay a lump sum amount which is less than the total amount of debt you owe to the lender, of course if the lender approves.
The program sure asks for a lot of money but at the end of the day, you get relief as you pay less than what you were owed. Plus, no more monthly payments going to the lender and you gain your freedom again.
People often skip this option because they don’t have the money to pay a huge sum. Here’s where a debt relief company can come in handy. They can pay a lump sum amount on your behalf and in return, you need to pay them on a monthly basis.
The benefit is that you get debt relief and the total amount of money you owe to the lender is reduced.
2. DMP – Debt Management Plan.
This refers to coming up with a debt management plan that explains how you will be paying all your debts.
While you can create a DMP yourself, the wise move here is to approach a credit counsel agency to make it for you.
If the plan gets approved, you won’t have to worry about paying your lender each month, you will only pay to the credit counsel agency which will be much less than what you were paying to the lender.
3. Getting A Debt Consolidation Loan.
Getting a loan to pay a loan seems a bit off but it’s worth it. A debt consolidation loan has fixed terms and payments that run for 3-5 years. Here’s how this loan can help you achieve debt relief:
Calculate the average interest you’re paying each month. Suppose it goes to 20%. Now, if you get a debt consolidation loan which is a personal loan, say at 10% then it’s totally worth it to pay your debt with this loan because then you’ll be paying a much lesser amount per month than you were paying before.
4. Transfer Your Balances.
This requires you to have several credit cards.
The trick is to have a statement of each card and compare the interest rates of each. Choose one that has the least interest rate and transfer all your money to that particular card.
As a result, you will be paying less interest by using the card that is the most economical to you. .
If you happen to have a good credit score then chances of getting a 0% balance transfer card are better.
A 0% balance transfer card means that you will have 18 months interest free. Meaning, you get more time to pay the debt so that’s a relief.
The Verdict.
These 4 programs are definitely worth it. Make sure you choose the one you’re comfortable with.
