Debt Reduction Solution
Debt reduction solutions are creative courses of action that can help you address the accumulating debt that seems more insurmountable every day. Do you find yourself increasingly overwhelmed by your bills due to growing debt and unexpected medical or other expenses? Do you find yourself using one credit card just to cover the minimum payment on another? A debt reduction solution can help you avoid bankruptcy, reduce your monthly level of debt, rebuild your credit, and move you toward debt-free, financially-responsible living.
When you find yourself repeatedly falling behind in your monthly payments, it's time to examine debt reduction solutions. There are a variety of debt reduction solutions. Evaluate your own situation to see which debt reduction solution might be best for your circumstances. Debt consolidation takes all your current debts and rolls them into one large loan at a lesser interest rate than the individual creditors are likely charging you. You use your loan to pay off your creditors and then pay one monthly fee to the bank that provided this debt reduction solution. The result is hundreds if not thousands of dollars in interest savings, but no actual reduction in the principal amount of your debt.
A home equity debt consolidation loan is a good debt reduction solution because in addition to the interest savings you earn by financing your debt at lower rate, the interest on a home equity loan is also tax deductible. Plus, home equity loans can be spread out by as long as 30 or 40 years. While longer loans result in increased total interest costs over the life of the loan, they do result in a much smaller monthly payment, which might provide a better debt reduction solutions if your current income is limited.
Another debt reduction solution is debt settlement. In contrast to debt consolidation which does not reduce your lump sum of debt, debt settlement is a debt reduction solution where you or a hired financial service negotiates with your creditors to reduce the amount you owe significantly. Debt settlement companies work with your creditors to get them to agree to a repayment of 50-70% of what you owe. The end result is a smaller amount of debt. Not all creditors are willing to negotiate your debt. Secured debts, where collateral such as a car is held as security for the loan, can rarely be negotiated.
Additional debt reduction solutions include paying off debts by selling off some of your assets such as jewelry or cars. Perhaps you can sell your vehicle and replace it with a much older model, using the difference in price to pay off bills. If you carry high-interest credit cards, apply for and transfer your balances to lower-interest cards. Sit down and evaluate different debt reduction solutions to see which is best for you. Can you clear your debts by selling a few assets or downsizing your home or car? Or are your debts so sizable and numerous that you need to consolidate or settle them? Becoming debt free is a reality for those who identify and follow debt reduction solutions.