Bad Credit Loans
Often as a result of financial hardships such as unemployment, medical crisis, or family difficulties, many residents in Missouri and across America are falling deeper into debt. This has many individuals and families facing the prospect of seeking loans for relief while having credit that is less than perfect. Often struggling to make ends meet, these consumers often fall several months behind on their credit card payments, leading to higher interest rates, late fees and penalties, and lower credit score. While a bad credit loan often may seem like the only available option for many people in this scenarios, there is some good news: There are several debt relief options available that may help you breathe alot easier - including debt consolidation, credit counseling via a debt management plan, or even debt settlement. Again, it is important to point out that taking on more debt in the form of a high-interest bad credit loan may not be the best option for a person already struggling with creditors. Instead, it's wise to consider a debt consolidation program. With debt consolidation, or credit counseling, consumers may be able to get out of debt faster and save money by combining multiple credit cards and other unsecured debts into a single, easier-to-manage, simplified monthly payment made to a credit counseling agency.
Debt consolidation has certainly helped many consumers get control of their debts and regain financial footing. Debt consolidation typically includes going through the process of credit counseling so a debt counselor can conduct a brief interview with consumers to get a sense of what the consumers current debts are and the available income they have each month to pay down debts. This debt counseling process can help consumers arrive at a workable debt management plan to pay off debts at an accelerated rate. Other debt relief terms that are closely related to debt consolidation are DMPs (or debt management plans), credit counseling, and debt counseling, or debt resolution plans. In addition, there is another option to consumers called debt settlement, which has the goal of "settling" debts for less than the full amount owed through a single lump sum payment that creditors may agree to. In addition, another option is a debt consolidation loan, which involves paying off debts with the proceeds from a single loan. Be careful however before proceeding with a debt consolidation loan because you will typically have to put up a personal asset (such as a home) as collateral, and should you fail to make a timely loan payment, you could be putting your home or other asset at risk. Overall, debt consolidation, credit counseling or debt management plans, in addition to debt settlement have become increasingly popular debt relief alternatives to bankruptcy - which can have a more damaging and longer lasting impact on personal credit.
Explore your debt relief options now by answering a few, simple questions to get a free debt relief analysis and savings estimate.
"How Can Debt Consolidation Help?"
Given the choice of dealing with multiple payments every month or having just one payment to worry about, many consumers will likely choose the convenience of having a single payment. That is generally the idea behind debt consolidation or what is also known as a debt management plan (or DMP). Debt consolidation allows you to combine, or "consolidate," multiple high-interest credit card and other unsecured debts into one, more structured, more manageable monthly payment made to a credit counseling agency. When you enroll in a debt consolidation program, credit counselors review your finances - taking into account your debts and source of income. After they determine how much money you can reasonably allocate to paying off your debts, they will typically develop a strategy in which they submit proposals to creditors, on your behalf, requesting the benefits of debt relief, including reduced interest rates, or the waiving or elimination of any late fees or penalties. Creditors that agree to the proposals are placed into the debt management plan. The goal is, with a single and more structured plan, consumers have the opportunity to pay off debts at an accelerated pacee that is affordable. This can not only help to simplify a consumers finances, it can also reduce stress, and quite possibly save a substantial amount of money in the process.
How Debt Consolidation Loans Work
Many consumers in Missouri apply for debt consolidation loans to pay off their credit card debts and other types of unsecured debts (such as medical bills, retail store charges, gas cards, etc). With their reduced interest rates, debt consolidation loans can certainly help many individuals reduce their debts because they have, ideally, combined all their high-interest debts into one, lower interest loan.
However, debt consolidation loans are not without their risks so proceed carefully before taking on a debt consolidation loan: Debt consolidation loans typically involve taking unsecured debt and paying it off with funds that come by way of a "secured" loan, meaning, it is generally a loan where you would have typically put up your home or other asset to get approved. If, for any reason, you fail to make your loan payment, you would have essentially put your home at risk. In many cases, consumers who get debt consolidation loans also end up using their credit cards again and ringing up new charges. As a result, many of them will have new, high-interest credit card debts to deal with on top of their debt consolidation loan. Under this scenario, a debt consolidation loan may cause a consumer's debt predicament to go from bad to worse.
Debt Consolidation vs. Loans?
While debt consolidation and debt consolidation loans can certainly provide relief, they are two different approaches. As mentioned earlier, with a debt consolidation loan, the goal is to combine high-interest credit card and unsecured debts into one, lower interest loan. Since it generally entails taking unsecured debt and paying it off with funds that come by way of a "secured" loan, you could be putting your home or assets at risk - should you default on the terms of your loan agreement.
In comparison, with debt consolidation, you are combining or consolidating credit cards and unsecured debts into one, more structured, and more affordable monthly payment made to a credit counseling agency. The aim is, with a single, more structured, and more realistic payment plan, you can ideally reduce or pay off your debts sooner than if you continued making the monthly payments on your credit card debts at higher interest rates. It stands to reason then that for many consumers, debt consolidation, if followed faithfully, may be a preferred way to pay down debts at a more predictable pace.
The bottom line is, if you seek relief from debts, explore how various debt relief options other than a bad credit loan can help you get back on the road to financial health and freedom. Start by getting your free debt relief analysis and savings quote - your free debt relief analysis and savings estimate will not affect your credit and this will allow you to explore the potential money saving benefits of debt relief free of any obligation.