The Scary Truth
It’s very important to fully understand where you are now and where you want to be with your finances. Most people we encounter want to be completely debt free without ever returning to their current state. There are many agencies, advisors, and nonprofit organizations which will advertise certain debt relief techniques that may or may not fit your financial profile. You need a trusted source that will assess and understand your current debt situation and design a plan to meet your financial objectives. There are many debt relief options, but only one will fit your financial objectives.
Consolidation loans are so popular in our society and yet, there are no proven benefits from them. You don’t need to find consolidation loan companies, they will find you. The common myth of consolidation loans is that it saves interest and there is one small payment. In most cases, the lower interest rate and a lower payment exist because the consolidation company stretched out your loan further into the future by extending the term, setting you farther from your aim of financial freedom. Hence, the longer the term, the longer you will pay them the interest on using their money and the longer you will be locked into their program.
Debt consolidation is very dangerous for those who don’t fully understand it. It only treats the symptoms of the condition instead of treating the root of the problem. Enrolling all your debt into a debt consolidation loan does not reduce the amount owed to creditors. Debt consolidation utilizes other creditors to pay off debt; therefore, you move your debt from multiple buckets into one deep bucket. The riskiest aspect of this transaction is that the debt goes from being an unsecured debt to a secured one. Essentially, the creditor would require you to put up personal or business assets, known as collateral to get this low monthly payment. What you don’t know is if tomorrow you fall behind on those payments and cannot pay them in a timely manner, they will seize your assets. Some will go even farther and go after your personal assets, if you’ve signed a personal guarantee. Unfortunately, you will not be able to enroll this debt into any debt relief program unless you are willing to lose your pledged collateral.
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Debt Consolidation Example
Let’s assume you have a total of $27,000 in unsecured debt, composed of a two-year loan for $10,000 at 11%, and a four-year loan for $17,000 at 9%. Your monthly payment on the first loan is $520, and the payment on the second one is $535. That’s a total payment of $1,055 per month.
The debt consolidation company proposes to lower your payment to $670 per month and your interest rate to 8% by negotiating with your creditors and rolling your loans into one bucket. Sounds great, doesn’t it? Who wouldn’t you want to pay $385 less per month in payments?
But here is the catch; they omit telling you that it will now take you seven years to pay off the loan. Longer term initially sounds great until you realize how much more you will actually pay in additional payments. You will now pay $56,280 to pay off the new loan versus $38,160 for the original loans, even with the lower interest rate of 8%. This means you paid $18,120 more for the smaller payment loan. Not as appealing as it initially sounds!
The Real Way to Get Out of Debt
Rather than guessing which debt relief option is for you, which can be quite difficult and frustrating, a better option is to contact Strategic Debt Relief. We’ve helped thousands of people to achieve financial freedom by eliminating hundreds of thousands dollars in debt. Our negotiation experts deal with creditors every day, and go above and beyond to deliver our clients the best terms. When you decide to work with us and enroll into our debt settlement program, you will be surprised how important it is to have a roadmap to your financial freedom.
Our mission is to help as many people as possible. We resolve all types of unsecured debt and work around the clock to make our clients happy. When you speak to your personal debt advisor, you’ll understand that you now have someone who listens, understands your situation and shares in your aspiration to financial freedom.
To learn more about the debt settlement process, call Strategic Debt Relief at 877-297-4477.
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Not all debts are eligible for enrollment due to our underwriting guidelines. Clients who make all their monthly program payments pay approximately 42% of their enrolled debt balance before fees or 67% to 71% including fees, over a term of 1 to 60 months. Our service fee is approximately 20% to 25% of the enrolled debt amount enrolled. Not all clients complete our debt relief program for various reasons, including their ability to save sufficient funds while in our program. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of debt settlement. Please read and understand all program materials prior to enrollment, including potential adverse impact on credit rating. We look forward to assisting your shortly in settling your debts at Strategic Debt Relief 1711 Kings Highway, 2nd Floor, Brooklyn, NY 11229.