The APR on a loan is only one part of the debt, but it plays a key role in your ability to start paying down the debt. When you make a minimum payment on a debt, the majority of your payment is the interest charges. Only a very small amount of your payment is paid to the principle, which ultimately means it will take several years to get out of debt. When the APR is high, the ability to get out of the situation is even harder. While it might seem difficult, you do have options to get out of debt that can help.
Options for Debt Relief:
If you are like many Americans who are struggling with high interest debts, then you need to look into relief options that will help your situation. For example, if you are like many who owe around $10,000 in credit card debt at a rate of around 18 to 20 percent interest, you need to find a solution. This high interest debt can end up taking about 20 years to repay while making minimum payments and will end up costing almost double the initial funds used for purchases. By understanding the debt relief options, it is easier to select the best solution to your debt problem.
The first option available is taking out a consolidation loan. The goal of consolidating your debts is reducing the interest rate on loans or credit cards. The loan provides the funds to pay down the debt and ideally should reduce interest rates dramatically.
While consolidating is an option, it comes with a wide range of problems you will need to consider before deciding that it is right for your needs. The key dilemma with consolidating is that an unsecured loan will not reduce the interest rate enough to be worth the cost of closing or other added fees. If you are struggling with debts, then you are probably not eligible for lower interest rate loans.
If you are considering the option to consolidate by securing a home equity loan, then you will want to think about the potential problems. Consolidating with a secured loan might offer a lower interest rate, but it also creates a debt trap. Instead of helping you get out of debt, it provides the opportunity to build up more debt because you are not required to close your revolving accounts.
Settlement is another potential solution to your debt problem. When you are struggling with high interest loans, the key to getting out of debt is removing some of the principle. A settlement works on reducing your principle debt rather than the interest rate.
In most situations, the best solution for getting out of high interest debt is settling the account. Settlements occur when a professional negotiator who is representing you asks for a reduction in the amount you owe. You will make a single lump sum payment to the creditor for a smaller amount than you owe, and then the creditor will forgive the remaining amount.
Advantages of a Settlement:
It is possible for you to get out of debt if you decide to settle the account because the debt is eliminated as soon as you make the lump sum payment. After the payment is made, you are no longer responsible to pay more on your loans or credit cards. Understanding the key advantages of the settlement process will make it easier to enjoy the process of negotiations.
The obvious advantage is that you will no longer owe your creditors. The debt is considered paid after the lump sum payment is received. Collection calls will end, and you will not need to worry about your high interest rates.
Since the process of settlement will automatically close your accounts after the lump sum payment is received, you will not have the possibility of getting into a debt trap. Instead of a trap, you will have the opportunity to identify the spending habits that build up debts and work on avoiding the problem in the future.
Another advantage is the impact to the credit score. While settlement will have a short-term impact that causes the score to drop, it is possible to immediately start working on turning your credit around. This means that you will be eligible for new loans and credit cards within a 12 to 24 month period.
If you are struggling to make payments due to a high APR, then you do have solutions available. Settling your accounts is the best solution to get out of debt if you are struggling to make payments.
Options for Debt Relief:
If you are like many Americans who are struggling with high interest debts, then you need to look into relief options that will help your situation. For example, if you are like many who owe around $10,000 in credit card debt at a rate of around 18 to 20 percent interest, you need to find a solution. This high interest debt can end up taking about 20 years to repay while making minimum payments and will end up costing almost double the initial funds used for purchases. By understanding the debt relief options, it is easier to select the best solution to your debt problem.
The first option available is taking out a consolidation loan. The goal of consolidating your debts is reducing the interest rate on loans or credit cards. The loan provides the funds to pay down the debt and ideally should reduce interest rates dramatically.
While consolidating is an option, it comes with a wide range of problems you will need to consider before deciding that it is right for your needs. The key dilemma with consolidating is that an unsecured loan will not reduce the interest rate enough to be worth the cost of closing or other added fees. If you are struggling with debts, then you are probably not eligible for lower interest rate loans.
If you are considering the option to consolidate by securing a home equity loan, then you will want to think about the potential problems. Consolidating with a secured loan might offer a lower interest rate, but it also creates a debt trap. Instead of helping you get out of debt, it provides the opportunity to build up more debt because you are not required to close your revolving accounts.
Settlement is another potential solution to your debt problem. When you are struggling with high interest loans, the key to getting out of debt is removing some of the principle. A settlement works on reducing your principle debt rather than the interest rate.
In most situations, the best solution for getting out of high interest debt is settling the account. Settlements occur when a professional negotiator who is representing you asks for a reduction in the amount you owe. You will make a single lump sum payment to the creditor for a smaller amount than you owe, and then the creditor will forgive the remaining amount.
Advantages of a Settlement:
It is possible for you to get out of debt if you decide to settle the account because the debt is eliminated as soon as you make the lump sum payment. After the payment is made, you are no longer responsible to pay more on your loans or credit cards. Understanding the key advantages of the settlement process will make it easier to enjoy the process of negotiations.
The obvious advantage is that you will no longer owe your creditors. The debt is considered paid after the lump sum payment is received. Collection calls will end, and you will not need to worry about your high interest rates.
Since the process of settlement will automatically close your accounts after the lump sum payment is received, you will not have the possibility of getting into a debt trap. Instead of a trap, you will have the opportunity to identify the spending habits that build up debts and work on avoiding the problem in the future.
Another advantage is the impact to the credit score. While settlement will have a short-term impact that causes the score to drop, it is possible to immediately start working on turning your credit around. This means that you will be eligible for new loans and credit cards within a 12 to 24 month period.
If you are struggling to make payments due to a high APR, then you do have solutions available. Settling your accounts is the best solution to get out of debt if you are struggling to make payments.
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