Tennessee debt consolidation - How to manage your way out of debt
If you're having debt problems in Tennessee and you're looking to plan your way out of it, then you should consider Tennessee debt consolidation or settlement. With debt consolidation, you'll have your multiple bills replaced with one monthly payment or you can negotiate your debt down with a settlement program.
Tennessee debt consolidation options
The following options can help you consolidate bills in Tennessee.
- Get professional help: This is where you enroll with a consolidation company and let them negotiate lower interest rates with your creditors. This lowers your monthly payments. If you have incurred late fees or over-limit charges on credit card bills, they can be negotiated down or eliminated under a Tennessee debt consolidation program. Learn more...
Another way to consolidate your bills is to take out a low interest consolidation loan from a bank or private lender and pay your bills with a lump sum payment. The Tennessee consolidation loan then needs to be repaid in small monthly installments. Find out more...
- Do it yourself: If you have multiple credit cards and you want to consolidate them into one, you can do so without getting help from a Tennessee debt consolidation company. All you need to do is transfer the balance on high interest cards to one having a low interest rate. The purpose is to reduce your monthly payments and replace multiple bills with a single installment every month.
Instead of transferring your card balances into an existing card, you can even take out a balance transfer card at 0% introductory period. Usually the introductory rate lasts for 6-12 months, so it is better to do a balance transfer only if you can pay down your debt within this time period. Therefore, you don't need to pay interest on your debt and your monthly payments are easily manageable.
Tricks and traps of Tennessee consolidation
Below are the tricks and traps of consolidating bills in Tennessee:
- Tennessee debt consolidation loans usually need you to pay high fees including hidden charges and costly credit insurance. This insurance policy covers your loan payments when you fall sick, become unemployed, or die. Purchasing this policy often adds a certain amount of money to your debt balance since the cost of insurance is rolled into your debt balance and the interest you pay monthly is calculated on the principal amount. So, when you choose a lender, verify the fees they'll charge before you sign on the dotted line.
- You may end up paying more:
The term of the Tennessee consolidation loan is quite long, so even though your monthly payments are low, you may end up paying more interest.
- Do not run up your credit card balance:
When you consolidate debt, make sure you don't use your cards unless you're able to manage your finances with proper planning and budgeting. Otherwise it can increase your debt load and make your financial condition worse.
- Do not deal with a company making big promises:
If a Tennessee debt consolidation company makes unrealistic promises, it is better to avoid them. No company can make high interest payments suddenly cheap. It depends upon how well the company can negotiate with your creditors and make your payments affordable.
- Review your monthly statements:
You should keep in mind that the monthly fees charged by the consolidation company may be included in your payments. Therefore, you should check the monthly statements you receive from your creditors to make sure the consolidation company is sending your payments on time and find out whether they are charging more.
- Be careful with balance transfers:
With the Credit Card Reform Act 2009 in effect, credit card companies have started raising balance transfer fees up to 5% of the amount transferred. So, when you transfer a balance worth $25,000, you pay around $1,250. Some companies don't even cap the fees. So you should read the fine print and verify the fees before you sign the card agreement.
Tennessee debt settlement allows you to pay less than you owe
If you can't continue with your monthly payments and wish to get rid of your debt by paying less than you owe, debt settlement may be the right choice.
When you enroll with a Tennessee debt settlement company, they will ask you to make certain monthly payments to a savings account. After you save a certain amount, the settlement company will negotiate with your creditors or collection agencies (CAs) and offer to pay a certain percentage of the money you owe. The remaining amount will be forgiven by the creditor/CA. It is known as canceled debt that the IRS considers as taxable income.
Things to know before you settle debts with professional help
Here are a few things you should know before you enroll in a settlement program.
- Settlement fees: When you make monthly payments to the settlement company, make sure they don't keep a part of it before they deposit the money into the trust account. You need to verify the upfront fees, monthly fees, and other charges they need you to pay.
- Your credit will get hit if you stop paying creditors: When you don't pay your creditors and save money for a settlement, creditors report late payments on your credit report. This leads to late fees, high interest rates, and you may face legal actions such as judgments and garnishments. Most states now require debt settlement companies to not advise you to stop paying your debts in order to save for a settlement.
FAQ on Tennessee consolidation and settlement
Q) I have 3 payday loans with high interest rates and cannot keep up with my payments. What should I do? These are all internet payday loans.
Ans: Payday lending is legal in Tennessee. Since these are internet payday loans, you can combine them into a single monthly payment under a Tennessee debt consolidation program. It will reduce your monthly payments and help you get rid of debt faster. Find out more...
Q) I'm trying to consolidate credit card bills worth $70,000. I'm current on all my accounts but I want to go with a company that can help me consolidate and make one monthly payment at a fixed rate. How do I choose the best consolidation company?
Ans: If you're looking for the best consolidation company in Tennessee, check out the Ranking Chart in our community. You'll find a state-wide listing of companies ranked on the basis of their company profile, accreditation, and other details. This will help you find the best company to deal with.
Q) I have accumulated multiple debts in Tennessee. These include 2 medical bills, a few payday loans and credit card bills worth $30,000. I'm not willing to carry on with the monthly payments and would like to settle them fast. How do I proceed?
Ans: You can negotiate a settlement with your creditors. Learn how to settle debts yourself. If you don't feel you can do it on your own, enroll with a Tennessee debt settlement company and let them negotiate with your creditors and reduce your outstanding debt. If a creditor is not willing to settle, you can negotiate an alternative payment plan to pay off the debt.
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