Affordable Debt Consolidation
Credit card debt spending has risen in the US due to the financial constraints brought on by COVID-19. According to a Sept. 21 study by WalletHub, Texas leads the states behind California with the highest increases in credit card debt. And low mortgage rates haven’t translated into low credit card rates. Shockingly, the median interest rate for all credit cards in the Investopedia card database for October 2021 is 19.49%.
These high interest rates can cause financial pain for people with significant credit card debt. The high payments can make it impossible to meet the rising cost of living. Defaulting debtors face non-stop collection calls and sometimes followed by debt collection suits. Fortunately, there are solutions to this overwhelming debt. Let’s take a look at the most common options.
Secured or Unsecured Debt Consolidation Loans:
Unsecured debt consolidation loans involve taking out a lower-interest loan to pay off higher-interest credit card debt. Because these loans have no collateral for the lender to pledge or repossess, they require high credit scores and excellent debt-to-income ratios to reduce their risk. Most secured debt consolidation loans use home equity as collateral. In Texas, when using equity, your home must be held below 80%, so not all of the equity is available in a refinance or second mortgage. However, if you have enough equity, the credit requirements are lower than for an unsecured loan since your home serves as collateral.
Debt management plan with credit advice:
A credit counseling program can provide some of the benefits of a debt consolidation loan, including the need to make only one payment per month and lower interest rates. There is no need to take out a new loan as the installments will be reduced with your existing debt so good credit is not required but you will need to be able to afford the monthly payments. However, this is considered a “hardship” program. So if you want to take on more debt (and are able to pay it off) then this is not a program to consider. Depending on your current interest
Installments, the monthly payment is likely less than your combined minimum payments, and these programs are designed to pay off debt in about five years or less.
Debt negotiation for debt relief
Debt negotiations, also known as debt settlement, are another common way to resolve overwhelming credit card debt and personal loans. It’s a hardship program, and similar to credit counseling, it’s not an option if you plan to apply for more debt before completing the program. These programs are typically structured to last anywhere from 24 to 48 months depending on your monthly budget and the amounts negotiated. Monthly program payments can cost less than half compared to minimum payments. A reputable program will not charge transaction fees until a debt is settled.
The savings come from non-monthly payments to your creditors. Instead, money is deposited into an FDIC-insured special account while debts are individually negotiated and settled for less than total balances. The program is ideal for those who are about to default or those who have already defaulted, as failure to make minimum payments negatively impacts credit scores. However, this can be a great alternative to bankruptcy, and since the program can be completed much quicker than most other options, you can also start rebuilding your credit quickly. Not all debt negotiation programs are created equal. Debt redemption negotiation fees are often 20 to 40 percent lower than foreign companies. They also have special resources to help Texans who have been sued by a creditor or collection agency.
Chapter 7 or 13 Bankruptcy:
Bankruptcy can be the shortest and least expensive way to clear debt if you can qualify for Chapter 7. Many people with significant income or non-exempt assets face issues that prevent Chapter 7 filing, and Chapter 13 may be the only form of bankruptcy available. In some cases Chapter 13 is more expensive than a debt negotiation program, in other cases less expensive. Consultation with a Texas bankruptcy attorney is required when considering this option. Debt Relief does not provide legal advice.
Get a Free Debt Relief Consolidation
Affordable Debt Consolidation in San Antonio, Texas also has multiple offices in the Lone Star State to help Texans struggling with overwhelming debt. If you are considering debt consolidation loans, credit counseling, or debt settlement, a Texas Debt Specialist can offer you a free, no-obligation phone or office consultation. We can also refer you to Texas bankruptcy attorneys if needed. Learn about your debt-solving options today so you can live your life debt-free. Call 800-816-1003 or visit https://affordabledebtconsolidation.com
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