These days millions of people in the country and all over the world are facing the problem of having too much debt. The real problem however is that eliminating these debts is not an easy task. However, all is not lost since there are various strategies you can use to eliminate those debts and save yourself some money. The other problem is that just like when you were taking the loan, you will need a good credit score in order to access the most practical ways of reducing your debt. For those with a poor score there are only two ways to do this.
First you can contact a debt management service or a consumer credit counseling service to help you with your debt. By doing this you are taking your first steps towards financial freedom. A debt management service works by becoming a middle man between the creditor and you. You will pay them a monthly fee and they will forward the payment to the correct creditor.
Before you choose a service you should ask them what will happen if some unforeseen financial emergency arises and you miss a payment. This way you will not be surprised if you do encounter this problem. If going the debt consolidation loan route is not right for you there are other options available.
Debt management services to suit your needs fall in two distinct categories and therefore you need to carry out some research before deciding on the best service to use.
However, there are some pros and cons that go with a debt settlement. It is a good alternative to bankruptcy, the payments are generally flexible, and you can settle within three to five years.
The debt consolidation firm and your creditors strike an agreement whereby the firm will consolidate all your debt payments into one. The payments will be made directly to the firm. On the other hand, creditors will lower their interest rates hence reducing your monthly payments up to fifty percent.
Debt consolidation on the other hand is usually just a number of unsecured loans into one unsecured loan. You should use caution however because you generally have to have some type of property to use as collateral such as your home.
This service however is not meant to be an easy fix to your financial woes. It has its disadvantages such as a lower credit score making future lenders unwilling to extend a line of credit. - 29866
First you can contact a debt management service or a consumer credit counseling service to help you with your debt. By doing this you are taking your first steps towards financial freedom. A debt management service works by becoming a middle man between the creditor and you. You will pay them a monthly fee and they will forward the payment to the correct creditor.
Before you choose a service you should ask them what will happen if some unforeseen financial emergency arises and you miss a payment. This way you will not be surprised if you do encounter this problem. If going the debt consolidation loan route is not right for you there are other options available.
Debt management services to suit your needs fall in two distinct categories and therefore you need to carry out some research before deciding on the best service to use.
However, there are some pros and cons that go with a debt settlement. It is a good alternative to bankruptcy, the payments are generally flexible, and you can settle within three to five years.
The debt consolidation firm and your creditors strike an agreement whereby the firm will consolidate all your debt payments into one. The payments will be made directly to the firm. On the other hand, creditors will lower their interest rates hence reducing your monthly payments up to fifty percent.
Debt consolidation on the other hand is usually just a number of unsecured loans into one unsecured loan. You should use caution however because you generally have to have some type of property to use as collateral such as your home.
This service however is not meant to be an easy fix to your financial woes. It has its disadvantages such as a lower credit score making future lenders unwilling to extend a line of credit. - 29866
About the Author:
Susan Reynolds is a content coordinator a leading South African Debt Consolidation Portal. For more information visit: http://www.debtconsolidation123.co.za/
