I don’t know that I’ve ever heard a blues song about being in debt but there certainly should be one. If you’re having a big problem with debt, you’re probably singing the blues if not literally at least figuratively.
You’re not alone
If you are having a problem with debt, you’re not alone. I saw a report yesterday that the average American family is carrying $5,000 in medical bills, $6,800 in credit card debt and $24,000 in home equity loans – or a total of $35,800 in debt and those are just averages. Given this, you can just imagine how much credit card debt some families are carrying – $15,000, $20,000 or even more
You can end the stress
If you’re feeling stressed out by all that debt, relax. There are three options for consolidating those debts that can have you singing a happy song instead of the blues. They are a debt management plan, a debt consolidation loan and a debt consolidation program. Let’s look at each of these individually – with their pros and cons.
A debt management plan
The first option, a debt management plan, is something that most people do not try to do themselves. Instead, they’ll choose either a consumer credit counseling agency or a debt management company to help them get their finances in order, develop a payment plan and sell that payment plan to their creditors. The best choice is usually a consumer credit counseling agency because most are nonprofits and will not charge for their services vs. a debt management company that will. When you go to a credit counseling agency, you’ll be assigned a counselor who will help you create a personal action plan, manage your finances, reduce your spending and get your life back on track. If you cannot find one of these agencies in your area, you can find one online. However, make sure it is also a nonprofit and offers its services either free or for very small fees.
The cons of a debt management plan
The biggest con to a debt management plan is that it will probably take you at least five years to complete it. In addition, you will have to cut up all of your credit cards, make sure you don’t incur any new debts during that five-year period and make your payments to the counseling agency faithfully every month. This is because if you don’t, your plan could be revoked and you might be in worse shape than when you started.
Debt consolidation loan
A second option in debt consolidation is to get a loan and pay off all your creditors simultaneously. You might be able to get one of these loans from your bank or credit union. If you have to borrow, say, $15,000 or more you will probably have to get what’s called a secured loan. This is a loan where you are required to pledge an asset as collateral. In most cases that asset will be your house.
The pros and cons of a debt consolidation loan
The biggest benefit of a debt consolidation loan is that you will have a lower monthly payment than the total monthly payments you are currently making. Plus, you will get all those creditors – including debt collectors – off your back. On the downside, it will take you much longer to pay off the loan and, again, you would have to be very careful not to run up any new debts during the seven-plus years it will take you to pay back the loan.
A debt consolidation program
The third option and one that more and more families are turning to is a debt consolidation program from a company such as Debt Consolidation USA. In fact, our credit card debt consolidation program could help you reduce your unsecured debts by thousands. For example, you could reduce $25,000 in Visa and MasterCard debt to $0 in 24 to 48 months and save thousands.
Give us a chance to explain just how we could help you reduce your credit card debt and become debt free. Call our toll-free number or fill in the form at the top of this page today.