5 Benefits to Debt Management
Debt consolidation which is commonly called debt management is the best program for any consumer to do. The credit consolidation program is better than a consolidation loan, settlement program or trying to pay the debts off on your own. A credit card consolidation loan are secured loans and it is never wise to take on secured debt for unsecured debts. Settlement programs can be beneficial for those who are behind on their debts, but not if they are current and have substantial credit scores. Trying to pay off the debts on your own is virtually impossible due to the insane interest rates that are being charged. The interest rates that consumer are being charged are not only high but are compounded on a daily basis. The interest does not end and keeps on and on and on. Consumer may try to pay more each month in order to see their principle balances go down. Regardless of what the consumer does the chances of them paying their debt in the next 20 years on a debt balance of $10,000.00 is basically impossible. Most of the consumer’s minimum payment is taken towards the interest first. Debt consolidation is extremely beneficial and does not harm the consumer’s credit score in any way. Debt consolidation is a fast, effective way to get your debts paid off without the frustration that most consumers are feeling. There are many extreme benefits when it comes to the debt management program, below are some of the top benefits to the debt management program.
- Debt management is the one debt program that does not have any negative marks on your credit score. Debt management is not a negotiation of your debt balances, but a negotiation of all other terms. Consumers minimum payments are lowered, interest rates and their debt lengths without the harm to their FICO score.
- The consumer will have the convenience of one payment instead of several payments. When trying to keep track of many different payments on many different dates it is very easy to fall behind or miss a payment. When payments are missed the consumer will be putting themselves in jeopardy of ruining their credit score. Consumers are also able to choose their payment date which is very convenient and makes their payments a lot easier to afford.
- Consumer’s minimum payments are lowered making the stress of high payments lifted. It is very stressful to have high minimum payments especially when they do not go towards their minimum payments. Having a low payment that goes towards your debt balances is extremely beneficial.
- Interest rates are very high with credit cards and finding a plan to lower them is basically
nonexistent. Usually the consumer has that perfect interest rates, but this is how the creditors lure them in. Once you start charging the interest rates start climbing and the consumer is in way over their head. Debt companies are able to achieve this for the consumer. When paying the minimum payment the payment will no longer go to the creditors, it will go towards the debt balances (principal balances) where it belongs.
- Once all of the above is accomplished it is obvious that the consumer will be out of debt sooner than the original arrangement that they had with the creditors. As the principal balances go down each month the consumer will soon be free of their debts. The debt consolidation program usually takes 12 to 48 months with the option to get out of debt sooner. At any time the consumer is able to pay more than their minimum payment without penalties in order to rid their debts sooner.
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