The Best Options for Repaying Debt
Many people are dealing with a pile of unsecured debt. While they may be managing it on some level, there is always a breaking point. For those who are ready to begin living a debt-free life, one of the biggest challenges is figuring out where to start.
There are several options when it comes to tackling debt repayment. Some options can be found over at Debthunch. Some of the others are listed below.
Continue to Pay Them
If someone is organized and focused, they may have the ability to stick to a budget and repayment plan to handle the debt on their own. It is a good idea to assess the debt and create a schedule of how the debt will be repaid, including the amount of money to pay every month and the date the payments will be made. Be sure to make this consistent and to stick to it.
Before creating this plan, it is a good idea to call the lenders to ask if they are willing to work out a repayment schedule that will fit the plan that has been made. One of the worst things that can happen is that they will say no. In some situations, the lenders may be willing to lower the interest rate or to extend the overall payment window.
Utilize Credit Counseling
Some people need more help with it comes to sticking to a budget and repayment plan. If this is the case, it is smart to utilize the services of a credit counseling agency. They can help create a DMP – debt management plan – to evaluate the budget and figure out an affordable monthly payment for the debt. The credit counselor hired will help a person achieve lower interest rates and a lower minimum payment.
In most cases, the DMP creates a repayment plan that will be complete in approximately four to six years. A potential negative issue is that when someone is working to repay the DMP, they will not have access to their credit cards. However, this may also be a positive, especially if the credit cards are why they got into high debt to begin with. Another benefit is that the DMP will not hurt the person’s credit score even though the credit report will show that the individual is in credit counseling.
Combine All Debts into One
If someone has good credit, they may be eligible to utilize debt consolidation. This means that someone applies for a low-interest, fixed-rate loan – the new loan is used for paying off a person’s current debt, and the new loan is then repaid for a set term. By combining all the debts into a single account, a person can reduce their payments to just a single one.
When it comes to repaying debt, there are a lot of things to consider. With the options here, a person can find a path out of debt for good. Be sure to keep the information here in mind to ensure the desired results are achieved.