Debt Relief And How The Industry Gets People Out Of Debt.
4:02 AM
Many people are struggling in today's economic climate to make ends meet. For some it just goes a step to far and they fall in the cycle of debt and ever increasing interest rates and repayments.
This is the reason that the debt relief industry has grown so much. There are many people that have really been helped by the services provided, but there are also many who have been 'helped' by low quality companies that are attracted to the industry to make money.
This article will highlight how the debt relief industry can help and what to look out for.
There are two main types of relief or debt management programs. The first is debt consolidation, this is when you effectively borrow another amount of money, enough to cover all the monies owed. This second loan is at a much lower interest rate and will result in just one monthly payment.
This makes an immediate impact on an individual because their new monthly payment is much lower with manageable interest unlike previously when there were many higher payments. However, people should be aware that the total amount owed increases, because there are large consolidation fees to pay to set this up.
One other problem is that you generally need a good deal of security to qualify for one of these loans. Not many people that far in debt have the assets to be able to fulfill these requirements.
Then there is the debt negotiation route. This differs from consolidation in that a company negotiates on you behalf to secure large discounts on your debts. They use their skills and experience of the industry, to make the companies that are owed money understand that this is the best route for them and you.
It's advantages are that you can get huge discounts, up to 80% of what is owed, you save on the interest rates and can be debt free extremely quickly. The disadvantage is that it can affect credit ratings.
If after a consultation with a negotiation company you think this is a good match for you then do make sure to only use a company that charges fees based on a percentage of what they can save you.
This is the reason that the debt relief industry has grown so much. There are many people that have really been helped by the services provided, but there are also many who have been 'helped' by low quality companies that are attracted to the industry to make money.
This article will highlight how the debt relief industry can help and what to look out for.
There are two main types of relief or debt management programs. The first is debt consolidation, this is when you effectively borrow another amount of money, enough to cover all the monies owed. This second loan is at a much lower interest rate and will result in just one monthly payment.
This makes an immediate impact on an individual because their new monthly payment is much lower with manageable interest unlike previously when there were many higher payments. However, people should be aware that the total amount owed increases, because there are large consolidation fees to pay to set this up.
One other problem is that you generally need a good deal of security to qualify for one of these loans. Not many people that far in debt have the assets to be able to fulfill these requirements.
Then there is the debt negotiation route. This differs from consolidation in that a company negotiates on you behalf to secure large discounts on your debts. They use their skills and experience of the industry, to make the companies that are owed money understand that this is the best route for them and you.
It's advantages are that you can get huge discounts, up to 80% of what is owed, you save on the interest rates and can be debt free extremely quickly. The disadvantage is that it can affect credit ratings.
If after a consultation with a negotiation company you think this is a good match for you then do make sure to only use a company that charges fees based on a percentage of what they can save you.
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