Okay, you have had one too many shopping therapy sessions, and now you have dipped one too many times into your savings account to pay off several credit cards. You may have spent thousands of dollars and while you have lots of nice stuff, your credit report is three missed payments from being in serious trouble.
You could continue to stuff your bills in some drawer and continue with how things have been going. However, a better solution might be to consolidate your debts with a loan from Latitude Finance. As part of a debt management program, consolidation loans can help you rein in your spending and place you on track to financial freedom.
Continue reading below to learn more about some of the many benefits of debt management and how you can simplify your debt management.
Counselling
One great benefit of debt management programs is that they often come with additional assistance. First and foremost, these companies will contact creditors to help the individual with lowering payments. For consumers who are not credit savvy, contacting a collection agent might be intimidating, so having this done for you can be very helpful in resolving out-of-control debt. Furthermore, the debt management company can negotiate lower interest rates for accounts that have gone into arrears.
In many cases, having the advantage of getting assistance with drafting a budget and taking courses on financial acuity is hugely beneficial. Depending on the program, some counsellors might actually delve into talking about some of the behaviours that created the problem in the first place.
Streamline Debts
Debt management programs can also be great in helping consumers to secure a debt consolidation loan that works best for their budget. These loans, in many cases, pay off existing credit accounts, and by streamlining the payment, you will pay one bill with a lower amount as opposed to several bills each month.
Typically, a person paying minimum payments on several cards will pay more out monthly. However, in this case, not only are you paying more monthly, but you are also paying more in interest because interest is assessed at different rates for each card. In a nutshell, the loan will help you to reduce your costs in terms of both interest and the payment itself by consolidating the payment into one bill.
Credit Score
For those consumers who find themselves in arrears, a debt management plan can help re-establish your credit with the four agencies that operate in Australia, especially if taking out a consolidation loan. Essentially, your credit rating is affected by the amount of credit that appears on your report. Depending on your debt-to-income ratio, if you have a lot of outstanding credit but not a lot of income, this lowers the score. Your score will drop more with late and delinquent payments.
For this reason, a debt management program that reduces interest rates and that streamlines your payments through a consolidation program can help salvage your credit score. For one, the payments are lower and more manageable, so you can actually pay your bills. And, you will begin to re-establish your credit by simply making the payments on time.
Stress-Free And Debt-Free
No one wants to find themselves in financial trouble, however, it can happen to anyone quite easily and it can happen quickly. Debt management companies, fortunately, can provide you with the assistance you need to repair the damage quickly and effectively.
More than regaining control of your finances, debt management programs can alleviate financial stress. By having someone assist you in rectifying credit issues, you also have the opportunity to learn new ways to save money, to become credit-wise and to plan for your financial future. Debt management programs can help get you out of that financial pit and allow you to live stress-free from day-to-day without worrying about your debt.
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