Debts can reduce your options in life. They can ruin your happiness and affect your relationships. But there are some great and proven ways to manage your debts and renovate your damaged financial house. Take out some time from your busy schedule and consider these options to choose the best remedy according to your debt.
How to pay off unsecured debt
Payday loan debt
Payday loans are really annoying because of their high-interest rates. It can affect your life in few ways:
- Outstanding balance increases fast
- End up paying much more on the loan
- Can get easily trapped in debt cycle
Options to solve your problem: Payday loan consolidation | Payday loan settlement
Credit card debt
Interest rate accrues on your credit card bills when you revolve your outstanding balances from one billing cycle to another. It can affect you:
- Pay more interest on outstanding bills
- Debt collectors can harass you
- Can get sued for nonpayment
- Wages can be garnished as per court order
- Credit score may decrease
Options to solve your problem: Payday loan consolidation | Payday loan settlement
Medical debt
Your medical bill can go to debt collection if you can’t pay them on time. It can affect you:
- Pay more interest on medical bills
- Debt collectors can call for medical bill payment
- Your credit score may get reduced
- Can make it difficult to take out a loan at suitable terms
Options to solve your problem: Medical bill consolidation | Debt settlement program | Debt management plan
Utility bills
It may become difficult for you to manage your multiple outstanding utility bills. Nonpayment of utility bills can affect you:
- The more you delay, the more interest you will pay
- You can get harassing collection calls
- Collector can get a court order to garnish your wages
- Your credit score can drop to some extent
Options to solve your problem: Utility bill consolidation program | Credit card settlement program | Debt management plan
Personal loans
It may happen that you had taken out personal loans during a financial emergency but now facing problems to manage multiple due payment dates. It can affect you:
- Become difficult to take out loans with suitable terms in future
- Can get harassing collection calls to repay debt
- Wage garnishment can reduce monthly income
- Credit score may get affected negatively
Options to solve your problem: Debt consolidation program | Debt settlement program | Debt consolidation loan
Student loan debt
You may find it difficult to repay student loans along with meeting your daily necessities. It can affect you:
- Increasing your debt-to-income ratio
- May get collection calls and wages can be garnished
- Become ineligible for other aid programs
Options to solve your problem: Debt consolidation program | Debt settlement program | Debt consolidation loan
Tax debt
You owe a much higher tax to the IRS when you don’t pay your taxes on time. It can affect you:
- The penalty rate usually doubles to about 1% per month if you get a notice from the IRS and make no effort to pay back dues
- The IRS The IRS can force you to pay back unpaid tax by through federal tax liens and wage garnishments
- Your property can be seized
- You won’t get tax refund
Options to solve your problem: Debt consolidation program | IRS Debt settlement | Debt consolidation loan
Issues you face and legal rights you have
Collection calls
You can stop collection calls by knowing the right way to handle collectors and negotiate with them properly. You need to convince them about your financial situation to agree on a reduced payoff amount and settle your debts.
FDCPA
Fair Debt Collection Practices Act or FDCPA can help you when you are getting harassing calls from your debt collectors. FDCPA can protect you from unethical behavior by debt collectors, as they have to follow certain guidelines while contacting debtors and communicating with them.
How to pay off secured debt
Mortgage debt
You can opt for refinancing if you think that you’re paying your home loan at a much higher rate of interest than the current market rate. By opting for mortgage refinancing, you can replace your current home loan with a new one and suitable terms and conditions.
Car loan debt
Car loan refinancing can help you repay your loan at terms and conditions more suitable for you. You have to shop and compare the terms and conditions to reduce the monthly payment or repay your vehicle loan early.