Some Tips For Your Debt Solution

If I was to pick my top 3 solutions for debt, they would be as follows:

  1. Debt Consolidation
  2. Debt Agreement
  3. Debt Settlement

Debt consolidation is one of the most popular and most effective way of not only managing your debt but is also one of the most commonly used practices by professional debt management companies. If you are ever in a situation where you are falling behind in your repayments and need a one stop solution to all you debt problems, your best bet obtain a debt consolidation loan to pay off all your unsecured loans (credit cards, Personal loans etc) and you will repay in a single affordable payment plan.

When you go into debt consolidation, you are looking at a tailor made solution to your debt. This solution would be made around your income and your monthly expenses. It would be a resolution that would have minimal affect on your daily life.

If your debt to income ratio is over 10:6, banks and other financial institutions would be reluctant to offer you debt consolidation as a solution. This means you are in a slightly deeper end as no one is willing to come to your aid as they feel that by financing your debt, they stand a chance of losing their investment because if you are unable to keep up with the existing commitments, your ability to service the other loan would be either zero or very little. However if you are in a situation where you are able to service multiple loans but would prefer to have only one payment a month and nothing else to worry about, debt consolidation is one the better solutions for you. This would give you more flexibility and will allow easy management of your account.

If debt consolidation is not the solution for your debt, that means the water has gone over the top and requires professional intervention. This means going into a Debt Servicing Agreement with your creditor. This agreement is usually administered by an employee of a lower court and will require you get assistance from a legal professional. This whole process of coming to an agreement will involve additional costs being incurred hence making it not the ideal solution for debt settlement. It is important to note that this solution only applies to people who are unable to consolidate their debts.

Last but not the least, if you are able to; settle your debt all up. This is not the most popular or most commonly practiced solution but is the best way to resolve the debt problem. The most important thing to know about this solution is to know that if you want to settle, the credit provider will be willing to negotiate the debt with you. This means that if you were willing to pay your debt in a lump sum amount your creditor would be willing to reduce the total outstanding by a reasonably significant amount. It is also good to be aware of the fact that if you posses good negotiating skills, you may end up with a really good deal!

Do your research and investigate which solution suits your capital strength, as debt is something, which grows and needs to be dealt with immediately to avoid any future damage.