If you’re anything like the average American, you’ve got about $38,000 in personal debt. And if you have a mortgage, then the amount you owe is substantially higher.
First things first, debt isn’t a bad thing. It’s the only way to build credit, a perfect solution to financial binds, and the easiest way to afford big-ticket items such as a car and a home.
But if unmanaged, debt can spiral of control.
If you’re currently drowning in debt and struggling to pay up what you owe, you could do with a debt management plan. Continue reading to learn how to choose a plan that suits your needs.
Establish Whether Your Lender Offers Debt Management Programs
When a lender gives you a loan, they expect you to pay it back within a certain timeframe. If you default, there are a few options available to them. They can sell your account to a debt collection agency, for instance. Or if it’s a secured loan, they can repossess the collateral.
There’s a third option: debt management program.
An increasing number of lenders are beginning to offer these programs to clients in financial distress. It’s far cheaper (and excellent customer service) to help a client get out of debt instead of taking punitive measures.
Reach out to your lender and establish whether they offer such plans. If yes, assess them and determine whether there’s any that can suit your current financial conditions. Or better, you can negotiate with your lender to create a custom plan.
Seek Debt Management Offered by Non-Profit Organizations
There are several non-profit debt counseling organizations that also offer debt management services for free or at a very low fee. This is an ideal alternative when you’ve got unrelenting lenders on your back.
All you have to do is find an organization near you and tell them about your debt. They will reach out to your lenders and propose a repayment strategy that works for you. In most cases, lenders will oblige.
In addition to this, the organization’s debt relief professionals will counsel you on how to exercise financial prudence.
Consider a Debt Consolidation Loan
Dealing with one lender is already stressful enough. Imagine what it can feel like dealing with multiple lenders.
This is where debt consolidation loans come in handy.
Several lenders offer consolidation loans, which essentially means they will give you the money to offset all your other loans, usually at a lower interest rate. You’ll save yourself the headaches and also save some money on the lower interest.
This debt management plan is ideal if you aren’t completely unable to pay up what you owe. Maybe you’re just slightly overwhelmed or your income has dipped a bit.
While following a debt management plan, it’s important to be careful about taking on more debt. If you get a financial emergency and you can’t get a loan from a traditional lender, you can easily secure an online payday loan. Though be sure to get additional info on these loans before applying.
Debt Management Works!
Debt has its advantages, but if things go south, you’ll have a mountain to climb. Luckily, there are debt management programs that can help you climb out of the debt. The secret lies in finding the one that best works for you.
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