When You Should Apply for a Debt Consolidation Loan

When you are bound by the shackles of a large amount of debt, it can seem like you are tied down with nowhere to go. Many people in this situation look for any possible option that they can use to get help. One of the best options for you to consider when your back is against the wall is debt settlement. Why would you want to use settlement, and how can it help you achieve financial freedom?

debt consolidation

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How the Process Works

The basic process behind settling a debt is fairly simple. Either you or a representative for you contact your credit or and negotiates a deal. As part of the deal, you pay a large lump sum of money and then the creditor closes out your account. You pay a sum that is lower than your total account balance, and then the creditor simply forgives the rest of the debt that you owe. This process can be completed rather quickly, and it will have your debt handled completely.

Save Money

One of the biggest advantages of using this method is that it can save you a substantial amount of money. Instead of having to pay the full amount that you owe to a creditor, you can pay an amount that is quite a bit less. Some creditors will take half of what you owe or less if they are desperate enough for a payment.

Why are creditors willing to accept less than what you owe for your debt? The main reason that they are willing to accept less is because they are afraid that you might file for bankruptcy in the near future. Many of their creditors to get behind on their bills have to eventually file for chapter 7 bankruptcy, which means that their debts will be discharged by the court. At that point, the creditor will not be able to come after you or even contact use to try to get you to pay the debt. Most creditors would rather get something instead of get nothing.

Handle it Quickly

When people pursue other methods of debt relief, it sometimes takes many years to be able to officially get out of debt. For instance, when you enter into a debt management plan or use a debt consolidation loan, it may take 5 to 10 years to pay off your debt, depending on how big it is. With debt settlement, you can be out of your debt right away. As soon as you have a lump sum, the creditor cancels out the rest of what you owed. This means that you could have the entire process over in as little as one day if you have the money to pay. If it takes you live a longer to set up money, this can add to the time frame.

Overall, settling your debt is one of the best strategies that you can use to get financial freedom and take control of your life again. Just make sure that you don’t pay more than you should to the creditor in this situation.

This article was provided on behalf of Cambridge Life Solutions, their debt settlement experts knows what it takes to help you achieve the finacial freedom you’ve always wanted.  http://www.youtube.com/watch?v=7dIRRzV-0No

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