Being in debt can be stressful if your current financial condition cannot support it
. Due to many reasons people find it difficult to make payment towards their debts which pushes them deeper into debt. The non- payment of loan also hampers your credit rating. Thus, most people are finding ways to reduce their debts. There are several options and this article will help you explore a few of them.
Tip 1: Credit counselling and debt management: Once a person enrols for credit counselling and debt management, they get help at three levels. First level involves setting up a payment plan for the customer which is acceptable to both debtor as well as the creditor. This payment plan aims at a reduced amount of monthly payment for the debtor.
The next level involves negotiations with the creditors regarding the interest rate and the penalty charges on the customer's account. The counsellors try to reduce the interest rate that is being charged by the creditor. In most cases this negotiation can bring down the interest rate by 5 % to 10%. The third level of help involves making the delinquent account current.
Tip 2: Debt consolidation: By consolidating all your loans into one and taking a new loan with a lower interest rate you can bring down your monthly payments. It will also give you the ease of keeping track of a single loan.
Tip 3: Debt settlement: You can ask your creditor to settle your account for a certain amount of down payment. A successful negotiation on these lines can get you a debt elimination of about 50%.
These methods can help a debtor come out of debt in a legal way. However, most of the debt conditions require a combination of debt relief methods. A reputed debt management company will be able to guide you with your debt relief programs.