5 Options for Debt Relief

If you’re laden down by debt – whether this debt is from your student loans, credit cards or other personal loan – then you’ll benefit from this path to debt relief. Getting yourself out of the red isn’t simply a case of reducing your spending every month, given inflation and the sheer cost of even everyday things these days.

One of the avenues comes from BBB accredited debt relief program reviews, which provides confidence to the average consumer that this is a company that can help. You can have either a secured loan or an unsecured loan – there are options available to address either.

  1. Transferring Your Credit Card Balance

In response to the economic climate where debt is a growing issue, many credit card companies actively promote the possibility of balance transfers from your existing card to theirs – and this comes with an enticing 0% annual percentage rate for the first half-year – sometimes, up to the first two years!

A 0% APR means your monthly payments are only going towards the principle; you’re not on the hook for the interest on the balance for that period of time. A word of forewarning, though: remember that risk is directly proportional to creditworthiness, so high credit scores are generally a must to receive offers like this.

  1. Interest Rate Options

This is an expanded continuation of the above, as not everyone will have the FICO score necessary to receive a 0% APR offer. In fact, you can be proactive in this regard: give your current creditor a call and schedule an appointment – online, or in person – with an account manager. You may be able to obtain a lower interest rate.

The benefit of this is that more of your payment goes towards paying back the principal each month, instead of to settle the risk the creditor is undertaking as determined by your creditworthiness.

  1. Debt Consolidation

You might ask – why would anyone ever want to consolidate their loans? Well, for starters, if you have a lot of credit card debt, then you’re aware of how high the interest rates are on these when compared to what you can get with an average credit score on an unsecured loan. As such, there are quite a few companies out there willing to give you a personal loan at a lower rate; by consolidating all your other debt, you end up paying more money towards the principal with each payment.

The only debt you shouldn’t consolidate together are federal and private student loans – they often have widely-varying rates. Avoid crossing barriers; although of course, you can consolidate different federal loans with each other, and the same for different personal loans.

  1. Debt Forgiveness or Settlement

This option requires more research than the others, as the pickings are slim, so to speak.It’s the last step before a collection agency may step in, and accomplishes a similar function without as much of a hit to your credit history (or any at all, in some cases). Speak with your creditor about the possibility of paying a single payment that’s a sizable fraction of what you owe; they may forgive the remainder of the debt if you can do pay right away.

  1. Managing Your Debt Using an Assistance Program

Lastly – for this article, at least – debt relief in the form of credit counseling has been shown to work for quite a few people. How does it work? The agency takes on your principal, and works out a deal with your privately that lowers your monthly payments to something more manageable. Of course, you’re likely paying for their services, but this amount will be tacked on to the overall payment over the long term.