Debt Relief Program
Got the debt doldrums? Get a debt relief program!
How Do You Spell Relief?
When you are in debt, there are a number of debt relief programs that can help you out. Some of these programs are better than others, but they all have the same goal--to provide you with debt relief faster than you could ever get it on your own.
The fastest debt relief program is debt settlement. Is this the best option? No. It leaves a "black mark" on your credit for seven to ten years. However, some see it as advantageous anyway because it can reduce the amount you owe anywhere from 60-80%. But that also means you're paying back less than you actually owe, and is that really fair? We admit that high interest rates and finance charges aren't fair either, but you should at least pay back what you owe. If you choose this option, be ready to shell over the new amount due immediately. Your creditors might cut you a deal on the amount you owe, but in return they will want their money right away.
The best debt relief program by far is a debt consolidation mortgage. This is only an option for homeowners. It allows you to borrow from the equity in your house to pay off your unsecured debts. Sure, it raises your house payment a bit, but not by much! Your credit cards get paid off in full, you have the same interest rate as your mortgage rate, and since you can write off some of your mortgage interest on your taxes, you're essentially writing off some of that interest on your debt too. In addition, a debt consolidation mortgage won't hurt your credit.
Another debt relief program that a lot of people choose is a debt consolidation loan. This is just a loan you get to pay off all your unsecured debts in full. Generally, unsecured debts are credit card debts, and credit cards have high interest rates, but a debt consolidation loan usually has single digit interest rates. To get a debt consolidation loan, you need collateral. In addition, you don't get some of the discounts you get with a basic debt consolidation plan. Speaking of debt consolidation...
...a debt consolidation program is probably the most popular kind of debt relief program, especially when it comes to credit card debt relief. You don't need to be a homeowner and you don't need collateral. You do get big reductions in interest rates though, and some past fees can even be removed. All of this results in lower balances, which are combined by the debt consolidation company. Then you make one payment to the debt consolidation company instead of several payments (that include finance charges) to your creditors.
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