Increasingly, debt is becoming a significant financial burden for many people that impacts all areas of life. Studies indicate that the largest cause of divorce is financial problems since it places a huge pressure on relationships. Unfortunately, most people drown in debt without ever realizing that help is available to free them from its tentacles and set them on solid financial ground. Shame, embarrassment and false optimism that things will improve on their own are the main reasons people let the problem get to overwhelming proportions.
Fortunately, there is help available for people who are struggling with high monthly debt payments. These programs are offered by some lenders along with private companies to help their clients manage debt effectively. The purpose of such programs is to help the debtor to gradually pay of their debts. Depending upon a range of factors, there are two main types of debt management programs available to people through lenders. These are unsecured programs and secured programs.
Debt counseling, debt consolidation and debt settlement programs are the most common forms of debt management offered by lenders and private agencies. Debt counseling programs aim to guide you how to best manage your debt, avoiding common pitfalls and planning to be debt free. A debt counselor is well placed to advise you on which program would be most suited to your own unique circumstances. As well as professional debt counseling businesses, there are a host of non-profit agencies which offer free debt counseling to struggling members of the public.
The most popular and effective debt management program is that of debt consolidation. This is usually done using a debt consolidation loan which has a much lower interest rate than the various individual credit cards and other loans. The advantages of consolidating debts into a single lower rate loan are threefold. Firstly, your overall monthly payment will be much lower taking significant pressure off your finances. Secondly, you will only have to make one payment instead of several which makes financial management easier. Thirdly, there is a built in end date for the loan. Debt consolidation loans are fixed term loans which guarantees that you will not only be easing the immediate payment burden but also be gradually eliminating your debt altogether.
Debt settlement programs are special arrangements made to reduce the amount of debt you will have to pay. They are also known as debt elimination programs. A debt settlement company will negotiate with your creditors for a lower debt amount and lower interest rates and combine these into a program aimed to help you be debt free within a relatively short time frame (often one to two years).
The first step to financial freedom when you are struggling with debt is to research your options and seek professional help. Whether you choose to contact your lender directly about debt consolidation or speak confidentially to a debt counselor, it is important to take action quickly. The longer you leave a chronic debt situation the worse it will get and the more stressed and under pressure you will get. Make a decision to be free of debt no matter what it takes. If that means being a little embarrassed that other people know your circumstances, well it’s a small price to pay to get your life back.
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