If you are in significant credit card debt, you may feel as if though you are carrying a mountain on your shoulders. Whatever reason you are in debt for, know that there are a few steps you can take to get out of debt for good.
If you are expecting your accounts to go into collections, consolidating your credit card debt may be the best choice. When you consolidate your debt, you essentially take out a new loan to pay off other debts. The new loan you take out will have a favorable interest rate along with a lower monthly payment.
Here are some of the top ways to consolidate your debts:
A balance transfer is a great way to reduce the amount of interest you pay on your debt. If you have paid off a large amount of your debt already, you might want to think about placing all of your debts on a single credit card.
Most credit card companies offer balance transfers. Most of these offers even have 0% APR available for the first year. This is a great way to save interest which lowers your monthly payments. You will want to repay all your debt before the 0% APR offer expires, or else you could be slapped with high-interest rates. If you want to learn more about balance transfers, check out our balance transfer article.
A personal loan is a great way of consolidating debt. You will use the funds from the personal loan to pay off all your debts, and just repay the personal loan after. Again, the goal is to find a personal loan with an interest rate lower than your current accounts.
You can find personal loans through various online sources, including CrediReady. Although banks and financial institutions do offer personal loans, it can be hard to acquire one if you already have a bad credit score.
Get a Debt Management Plan
A debt management plan is created by a service that will help people in extensive debt who are struggling to make minimum payments. Essentially, a debt management company will negotiate with your lenders and creditors to help stop your accounts from moving into collections while you repay.
However, it is important to know that many of these plans can take years to complete. Sadly, many of your credit cards and other lines of credit may be closed after you get a debt management plan as well. Not having access to credit could also lower your credit score.
Debt is a vicious cycle nobody wants to be a part of. Before you start exploring options, be sure to get your free credit report from the government mandated website www.annualcreditreport.com. Be sure to check that all the debts and their corresponding amounts are accurate. If they aren’t, file a dispute with the credit bureau that generated the report.
If you are buried under a mountain of debt, CrediReady can help. Our nationwide network of trusted and experienced lawyers are prepared to give you a FREE bankruptcy consultation to help you. Take a moment to fill out our inquiry form today to speak with your FREE attorney.