Debt Management Programs
The key to getting rid of your debt? Debt management programs!
Getting Ahead
When you're in debt, it feels like you'll never get ahead. Forget future planning. You may have resigned yourself to a life of being in debt. But that's a bit of a cop out in this day and age. Help is available, and as soon as you get it, you'll start to see the world through rose-colored glasses again.
To get the help we're talking about, you must first contact a debt management company. They will take a look at your financial situation and provide an in-depth analysis of what you should do. There are so many debt management programs available, you're sure to find the debt management program that will take you out of your debt depression.
Most debt management programs will get you out of debt in about five years. That might not sound possible when you know how long it would take you on your own (15 years or more). You might wonder how this is possible. You see, most debt management programs function on the premise of getting reductions. Whether the reductions are in total balance or just in interest rates, they can reduce the amount of time you spend in debt and the amount of money you spend in interest.
Debt consolidation involves a debt consolidation company contacting your creditors to get you reductions in interest rates and possibly get past fees removed. Then they combine the new, lower balances and you pay the debt consolidation company each month instead of your creditors. Because of the reductions, you're debt free in five years.
A debt consolidation loan is slightly different. The lender doesn't contact your creditors to get reductions of any kind. Instead, they give you a loan to pay off your unsecured debts in full. Then you have the loan payment instead. Most people think this is just replacing one debt with another, which is essentially true except for the fact that you're saving a ton of money in interest because the interest on a debt consolidation loan is in the single digits. Compare that to credit card interest.
Debt settlement gets you reductions of 60-80% off your unsecured debt balances. This is done by a debt settlement specialist who's skilled in the art of negotiation. However, once your balances are reduced, your creditors are going to expect you to pay up--in full. So be ready to do just that.
A debt consolidation mortgage is a great debt management tool for homeowners. It's similar to a debt consolidation loan in that no reductions are made in your balances. You get a check from your mortgage company for the amount you owe, then that amount is added to your mortgage. You end up paying off the debt at the same interest rate as your mortgage, which these days is 6% or less! And remember--you get to write some of the interest on your mortgage off on your taxes!
Finally, we come to student loan debt consolidation. This is just a tool that combines all of your student loans into one, gives them a much lower interest rates and spreads the repayment period out over a longer period of time, essentially cutting your payment in half.
Which of these debt management programs do you think will work for you? Only a debt management company can tell you for sure.
All material copyright © 2008 Debt Free Plan. All rights reserved.
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