Consolidating credit card debt resources
The majority of the time, a debt is reported as settled even if it’s reduced interest because the consumer didn’t pay as agreed, but they could agree to report it as paid in full.If the full interest amount agreed to in the contract is not paid, they have settled the debt, not paid it in full, so that is what is generally reported.Reducing your monthly payment often means that it will take you longer to pay off your debt and the debt will be more expensive over time, but some people see this as a necessary trade-off to avoid defaulting.If your credit is good, you may be able to qualify for a personal loan that you can use to pay off high-interest debts such as credit cards.Let them know you’re struggling and ask them for help.Don’t wait to make the call until you just can’t afford to pay them anymore or your account has been turned over to a collections agency. Creditors may be willing to accept a reduced payment, lower your interest rate and waive fees and penalties rather than see you default on the amount you owe.
Some cards have interest rates that skyrocket if a payment is missed.
In general, debt consolidation loans can reduce the amount of interest you pay each month, reduce the number of creditors you have to deal with, and shorten the amount of time it will take to pay off your debts as long as you qualify and keep with the program terms.
If you’re struggling to pay high interest rates on a lot of unsecured debt, consolidation may seem like an attractive solution.
A personal debt consolidation loan can also help streamline your payments; you’ll deal with a single payment to the lender, rather than trying to manage multiple payments to several different creditors.
However, if your credit score is low and your credit report has some blemishes, it may be difficult to get a personal loan.