Step 1: Credit counseling
Credit counseling is not a debt solution in and of itself. It ’ s an easy, free way to find the debt solution you need. A certified credit rating counselor evaluates your debts, recognition and budget to see where you stand so they can help you find the right solution for your needs .
|Time||30 minutes – 1 hour|
|Credit score impact||None (credit check is a soft inquiry)|
|What you’ll gain||1. Understanding of your various options to get out of debt
2. Whether you are eligible for a debt management program
3. If so, how much can you expect to pay?
Step 2: Weigh your options for debt relief
The credit advocate ’ sulfur job is to provide all the information you need to make an informed decision to get out of debt. The advocate can help you understand how a debt management plan through a credit guidance agency will work. They will besides explain how this solution differs from others, like debt consolidation, debt colony, and bankruptcy .
once they answer all your questions, you may decide to explore other options before you choose a solution. As you research other options, these complimentary resources can help you zero in on the best solution for your needs.
Reading: Finding Credit Card Debt Relief
- Explore all your options for debt consolidation »
- Compare consolidation to other solutions »
- See debt relief in action for other credit users in your state »
Comparing Debt Relief Options
This infographic compares the seven most popular debt relief options based on five key factors, so you can find the best solution for your needs… .
Step 3: Enroll in a debt management program as soon as you’re ready
If you decide a debt management program is your best option, then you can enroll vitamin a soon as you ’ ra ready. then our team will go to work. We call each of your creditors to work out three key factors that will make it easier for you to get out of debt :
- That they agree to accept payments through a debt management program
- To reduce or eliminate interest charges applied to your credit
- That they will stop tacking on penalties and fees to your debt
once all your creditors sign off, you start the program. You make one requital to us each month, then we distribute it to your creditors on your behalf. here ’ s what you can expect from a debt management program :
|Payments||Total payments reduced by up to 30-50%|
|Interest charges||Reduced to 0-11%, on average|
|Fees||Fees are set based on the state where you reside and are included with your monthly payment; average fees are $40 and are capped at $79 nationwide|
|Time to payoff||36-60 payments|
|Credit impact||Positive or neutral|
Specialized help for military Service Members and Veterans
If you are presently serving or have served in the military, then you face a singular set of fiscal challenges. Consolidated Credit works close with Southern Command, Army OneSource and the Department of Defense to help military Service Members and Veterans get the fiscal aid they need. We besides offer specify debt serve for military personnel .
Get more information about military debt consolidation »
Getting debt relief for other types of debt
Credit wag debt is not the merely type of debt that you can include in a debt management course of study. You can consolidate about any character of unbarred debt, not including scholar loans. This includes debt consolidation loans, unpaid medical bills that have gone to collections, and even some payday loans. If you ’ re struggling with student loans, then you will need a specialize type of debt relief .
- Learn more about consolidating medical debt »
- Overcome challenges with payday loans »
- Get information about student loan consolidation »
Using debt consolidation to get relief
Debt consolidation is much the favored option for debt relief because of the benefits it provides. With consolidation, you pay back everything you owe while minimizing concern charges. You can often enjoy lower monthly payments, even while you pay off your debt faster and save thousands. There ’ randomness besides no credit reputation damage, which you see with other solutions like debt liquidation and bankruptcy .
There are three basic ways to consolidate citation card debt :
Option 1: Do a credit card balance transfer so you can pay off the debt interest-free
Credit Limitation: This option only works if you have good credit ; excellent citation is better. Balance transfer credit cards offer 0 % APR on libra transfers when you open the report. An excellent credit score means you qualify for the longest 0 % APR introductory time period possible. Some cards have promotions that run up to 18 or 24 months. That gives you up to two years to pay off your debt interest-free .
Be Aware of Fees: Balance transfers always involve transplant fees, even when you have 0 % APR. You pay a tip for every remainder you transfer – anywhere from $ 3 to 3 percentage .
How It Works:
- You open a balance transfer credit, qualifying for rates and terms based on your credit score
- Then you transfer the balances from your existing accounts to the new account with fees added.
- You have a set number of months to pay off your debt with no interest charges.
Make certain to calculate carefully to ensure you eliminate the balance before the clock runs out. If you can, this will give you the biggest cost savings, because there are no interest charges. otherwise, the interest rate on your debt could be even higher than it was originally .
Learn more about credit batting order debt transfers »
Option 2: Consolidate the debt with a low-interest personal loan
Credit limitation: Like a balance transfer, a personal debt consolidation lend is normally only a viable solution for consumers who have a good credit score. The higher you score, the lower the sake rate you can qualify for on the lend. APR of 5 % is ideal, but anything below 10 % may be enough to provide the relief you need. If you can ’ t qualify for a rate below 10 %, search for other options .
How It Works:
- Check rates with your bank or credit union, as well as other financial institutions and online lenders. Your goal is to find the best rates and terms.
- Apply for the loan that fits your needs. The lender bases your approval on your creditworthiness.
- Once approved, you use the money you receive from the loan to pay off your debts; in some cases, the lender will send the money directly to your creditors.
basically, you use the money from the lend to pay off your credit tease balances and early debts. You can pay off things like aesculapian bills, besides .
When using this option, you want a loan with a term of five years or less. Any more than that means your total refund costs will be besides eminent. just keep in judgment that a shorter term means higher monthly payments. Calculate carefully to make certain you can afford the payments .
Explore personal debt consolidation loans »
Option 3: Enroll in a debt management program through a credit counseling agency
The benefit of professional help: A debt management platform is the solution you use if you can ’ thyroxine make progress on your own. If you don ’ t have good accredit or you ’ ve missed some payments, your creditors may be insubordinate to working with you. Having the aid of a credit rede agency means you have a team advocating with creditors on your behalf. That makes it easier to craft a refund design that your creditors will actually accept .
How It Works:
- First, you talk to a certified credit counselor to review all your options. The counselor makes sure a debt management program is the right solution; otherwise, they can direct you on where to go.
- If debt management is the right choice, they can help you enroll. Together, you find a monthly payment that works for your budget.
- Then the counselor calls each of your creditors to get them to sign off on the adjusted repayment schedule.
- They also work with creditors to reduce or eliminate interest charges, as well as to stop future penalties.
Learn more about a debt management course of study »
Kevin called Consolidated Credit He paid off over 12 thousand dollars in citation menu debt. Consolidated Credit worked with creditors to cut his interest rates to just over 4 %, saving Kevin some serious cash Kevin paid off his debt in full in good two and half years .
Call (844) 276-1544 or complete our kind to evaluate these options with a attest credit counselor now !
A few debt relief options you want to avoid
The three options outlined above are not the alone options that consumers can use. There are other ways to find debt respite – we just don ’ t recommend them. At Consolidated Credit, we promote a “ do no damage ” strategy when it comes to debt relief. In other words, your debt solution should not put you in a worse position than when you started .
Each of the solutions above – when used correctly – can eliminate your debt without causing credit damage or making your fiscal position bad. other solutions can decrease your citation score or negatively impact your long-run fiscal design .
For example, you can :
- Use a home equity loan to pay off debt. However, this puts you at an increased risk of going into foreclosure. If you miss payments, you could lose your home.
- Tap into your 401(k) or IRA, but you may face early withdrawal penalties. It also drains funds in savings that you need later in life to retire on time.
- Settle the debt for less than you owe, but this will damage your credit score. You may also be required to pay income taxes on your next tax filing for the amount you settled.
- File bankruptcy, which can allow you to get out of debt in as few as 90-120 days. However, you can damage your credit for up to ten years.
Good ways to find relief versus bad ways
The right field debt relief solution will help you reach zero without creating new fiscal risks or damaging your credit. When it comes to bad ways to seek debt easing, there may be some circumstances where using one of these solutions would be the best choice. however, you should exhaust every other choice first before you consider these final resorts .
|Good Ways to Find Debt Relief||Bad Ways to Find Debt Relief|
|Credit card balance transfer||Home equity loan / Home Equity Line of Credit (HELOC)|
|Personal unsecured debt consolidation loan||Cash-out refinance|
|Debt management program||Use retirement income (401k or IRA)|
|Debt reduction plan||Debt settlement program|
|Interest rate negotiation||Payday loans / cash advance loans|
|Workout arrangements with a creditor||Bankruptcy|
Deciding it’s time to get professional help
sometimes, we get resigned to trudging forward, even if we ’ rhenium not in truth getting anywhere .
here ’ s a simple truth : minimum payment schedules were never designed to help you get out of debt. Interest charges are gross and profits for credit card companies, which means they ’ re quite happy if you stay in debt constantly .
therefore, minimum payments only pay back a small percentage of what you owe – normally around 2 %. It ’ s more low-cost calendar month to calendar month, but the tradeoff is that you stay in debt for a long time. many times, if you only make minimum payments you could be paying those purchases off for decades .
And that ’ s merely half the trouble. If you run up senior high school balances then even larger payments may not make a dent cursorily at such high rates. Depending on your available cash run and matter to rates, it may be impossible to pay off your recognition cards efficiently .
Try a simple test:
- Use the debt calculator below to see how long it would take to pay off just one of your big balances. You may want to review your budget to see if there are any expenses you can cut to free up more money for debt elimination
- Enter the balance and your current interest rate; if you don’t know your payment schedule, check your statement or choose 2%.
- Now weigh two other options: Pay the minimum plus a little extra or make a larger fixed payment.
That ’ s just one debt. now think, how long will it take to pay all your debts off ? If you don ’ deoxythymidine monophosphate like the answer, it ’ south time to find debt relief .
If you need help finding relief, call (844) 276-1544 or complete our shape to speak with a certifiable accredit advocate .
Get Help Now
On the other hand, if you still want to try paying off the debt with regular payments, follow the steps below. They will increase your chances for success .
Step 1: Negotiate lower rates with your creditors
A lower rate means more of each payment you make can go towards the debt rather of accrue interest. This does accelerate refund, particularly if you make larger payments .
Your chances of a successful negotiation increase if :
- You’re not behind on your payments
- Your credit score increased since you opened the account
- You’ve been a loyal customer for a number of years
If you are not successful negotiating on your own, then that may be a bless you need the help of professional credit guidance services. Having a team of know negotiators on your side with established relationships with creditors can go a long way in making indisputable you get the results you want .
Step 2: Implement a debt reduction plan
You basically strategically arrange your bills and make the largest payments possible on one debt at a time. You find vitamin a much cash hang as possible in your budget by eliminating expenses, then target each debt successively .
We offer resources that describe how to implement an effective debt reduction plan .
Are there government credit card debt relief programs?
presently, there are no government-sponsored or government-backed programs that provide recognition menu debt stand-in to consumers. For model, unlike what you see with federal student loans, you can not apply to have credit card debt forgiven without penalties. No platform allows you to refinance or modify the terms of your recognition calling card agreement like there were with mortgages during the Great Recession.
What the politics does provide is oversight and regulation of debt relief services :
- The Credit Card Debt Relief Act of 2010 passed during President Obama’s administration prevents debt settlement companies from charging upfront fees. These companies may not charge fees until a debt is successfully settled on the consumer’s behalf.
- The Uniform Debt Management Services Act offers guidance to state governments on how to regulate credit counseling and debt settlement services. Under this agreement, many states:
- Only allow registered nonprofit credit counseling organizations to provide debt management services
- Cap fees for debt management services (fees are also capped nationwide at $79)
- Require both credit counseling and debt settlement companies to be accredited by a nationally-recognized association, which maintains strict ethical standards.
- Require credit counseling agencies and debt settlement companies to provide financial education as well as debt relief services.
- The Department of Justice also authorizes certain nonprofit credit counseling organizations to provide pre-bankruptcy counseling and debtor education.
Does Consolidated Credit adhere to these guidelines?
Yes. consolidate Credit is a register 501 ( degree centigrade ) 3 nonprofit organization organization. We are nationally accredited through the Financial Counseling Association of America ( FCAA ). We are besides approved by the Department of Justice to provide pre-bankruptcy rede in our home state of Florida .
plug in with a certified credit counselor to get the help you need to get out of debt .
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