Struggling with debt is something many people experience. However, there are a variety of options you can choose from to improve your financial situation. These options can be catered to your needs and like most financial decisions you must make, all have positive and negative factors associated with them.
When selecting one of these options, the goal is to maximize the positive features, and minimize the negative ones. This will help your debt solution process run smoothly. If you have further questions or would like to speak to a trained professional about your concerns, give us a call.
Credit Card Balance Transfers
Pros:
- It can be done personally, so you don’t need to seek professional help.
- It doesn’t harm or affect your credit as long as your payments are made on time.
- Depending on your credit score, you can receive 0% A.P.R. for up to 2 years.
- Your credit card accounts will stay active.
Cons:
- More often than not, you’ll need to pay a transfer fee.
- Acquiring a new credit card is essential if you need to take advantage of a 0% A.P.R. deal.
- Without a decent credit score, you will not be able to qualify for a new credit card that allows you to perform a balance transfer.
- Balance transfers are only for credit cards, not other forms of debt.
- Your other cards will have no balances, which can make it very difficult to stop yourself from charging more.
Personal Consolidation Loans
Pros:
- This can also be done personally, so there’s no need to seek professional help.
- Any money you receive from this loan can be used to pay off your other debts.
- Once again, there will be no damage to your credit as long as payments are made on time.
- Your current credit card accounts will remain open.
- Even with moderate credit, you could be eligible for lower interest rates, depending on your chosen creditor.
- You may be able to use this type of loan to pay off accounts that you are already behind on.
Cons:
- Despite having perfect credit, interest charges cannot be eliminated entirely. However, this is possible using other options.
- With a clean balance, using your credit card can be enticing. However, if you haven’t paid off your debt completely, unnecessary charges could result in an unstable credit situation.
- If you have unsuitable credit, this is not the option for you.
- Depending on your credit, you may not be eligible for a loan sizeable enough to eliminate your debt.
Debt Management Program
Pros:
- If you have bad credit, this is the option for you.
- Despite your relationship with your creditor, during negotiations, a credit counselor can decrease or even remove your interest rates altogether.
- You’re able to consolidate many different types of unsecured debt. For example, medical bills and payday loans.
- When you enter a debt management program you’ll get both budgeting and debt management help.
- With consistent, on-time payments, there is minimal chance to damage your credit score. Once they’ve completed this process, most people see an improvement.
- If you’ve currently registered in this type of program, you’ll still have access to secured credit, such as mortgage or auto loans.
Cons:
- All credit accounts involved in this program will be frozen. You’ll be unable to access them.
- While enrolled, you will be unable to apply for new unsecured credit.
- Keep in mind, you are trusting others to help resolve your financial situation. So, if you select an unreliable company or fail to communicate efficiently, your credit could be affected.
- If payments are not made regularly, you could be removed from the program.
- You are unable to consolidate any debts that were previously in collections process or in charge-off status.
Debt Settlement
Pros:
- This allows you to settle debts for a less than originally owed.
- You have the ability to remove debts that are currently in charge-off status, as well as debts that are currently being collected on.
- In a case of bankruptcy, your assets will be protected from being liquidated.
- With new rules and policies, you won’t be obligated to pay any fees until a minimum of one debt is properly settled.
Cons:
- Unfortunately, for each debt that is settled, there will be a negative comment on your credit report. This comment will last up to 7 years, starting from the day of discharge.
- There are numerous dishonest credit companies responsible for scamming consumers with fake agreements. So, it can be tough to find a trustworthy program provider.
- Fees can be high if your debts are settled.
- If your offer isn’t approved, you can end up in a tricky situation. This is because this type of program often means you’ll stop making your payments. They do not have to accept your settlement proposal.
- In the eyes of lenders and creditors, debt settlement can look bad. So, it can be more difficult to be approved for new loans and lines of credit.
Get The You Need Today!
If you’re still struggling to find the best debt solution to suit your needs, we can help. Fill out an application or get in contact with us today. One of our debt specialists will help you determine which option if best suited for your needs and connect you with a service provider in your area. Don’t let your debt rule your life anymore, take the first step towards a healthy financial future.