Common Mistakes Made by Consumers Seeking Debt Reduction and Debt Relief Cambridge MA
Common Mistakes Made by Consumers Seeking Debt Reduction and Debt Relief
Debt Relief and Settlement - Mistakes People Make
There are so many people in debt and a great deal of them who can no longer manage their financial situation on their own. This is the first time in history that people in America actually owe more than they earn, and it has created a great demand for financial education and debt relief solutions. Very few people understand the options that they have, and even fewer are humble enough to step up and ask for help in this situation. Here are some common mistakes that people make and how you can avoid them:
Debt Relief Loans with High Interest and Low Monthly Payments
Debt consolidation loans are always appealing to consumers. They're cheaper than the credit card bills that people have, and they offer one easy payment to allow consumers to pay down their debts much easier. However, with a poor credit history and a lot of debt, which is what most consumers have at this point, getting these loans is nearly impossible. If you are able to get approval for loans like this, you'll usually have an interest rate that is astronomical, which might make the entire concept more trouble than it's worth in your situation. The main companies that offer these loans tout their low monthly payments, but the programs might actually end up costing more, financially and otherwise, in the end.
Balance Transfers to Negotiate Debt
Balance transfers are great, but they're just a trap for many people who are in over their heads with debt. For those who have access to balance transfers, there is no actual debt reduction that takes place because the balance is simply transferred to a new card. If you can afford to pay off the balance before the low interest rate expires, then it can be an effective solution. However, if you're just playing tag with your cards to keep interest rates low, the money isn't going to go away until you pay it off. Plus, if you have a lot of transfers on your credit, this sends out a red flag to creditors in many cases.
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