If you’re currently dealing with a lot of debt, as many Californians are, there are ways to escape from it. There are a couple of different options for getting out of debt. Looking into alternatives such as debt settlement or debt consolidation can make all the difference in achieving your financial freedom. It’s important to arm yourself with everything you should know about debt settlement and debt consolidation loans California.
How Serious is Debt in California?
In California, the average individual owes $28,950 in student loans and $5,196 in credit card debt. This is a pretty significant amount of debt and is a major issue for some Californians. When you add interest, possible late fees, and any other add-ons to these monthly payments, the numbers rise even higher.
One study shows that the biggest financial stress is California is the cost of living. As those in California are paying a high price to simply live in the state, they are also struggling to chip away at their debt.
What is Debt Settlement?
With debt settlement, your owed amount is negotiated. This negotiation is best done by a financial or debt professional that you work with, as recommended by Christian Debt Counselors. They will work with a creditor to come to an agreement on how much you have to pay. This ends up being a smaller percentage of the overall amount owed.
Creditors are more likely to go along with this because they want to receive some money from you. If you are unable to make your monthly payments and declare bankruptcy, they’re getting little to no money. They want to recoup what they can from your original loan. For this reason, debt settlement is a great strategy. You will pay off your debts without having to make every single payment or pay the full amount.
If you choose debt settlement, it won’t take you nearly as long to pay off your debt. You won’t be tied down to your debts because they will be paid off quickly. This can put you well on your way to financial freedom and overall success.
Debt settlement can also be used as a way to avoid bankruptcy. If you’re nearing the edge of bankruptcy, it may be time to look into debt settlement. The lasting effects of bankruptcy can be a life-long issue, but debt settlement prevents those issues.
What is Debt Consolidation?
With a debt consolidation program, you have the option to combine your monthly debt payments as one payment. With this method, you are consolidating the debt that you have and making it more manageable.
When you consolidate your debts by finding a licensed service provider to assist you with the help of Christian Debt Counselors, you will typically be given a lower interest rate, which is easier to manage. Then, the focus shifts to paying on principle. This cuts out a lot of the fees that you would normally be paying if you continued paying standard monthly interest and fees. This is also helpful for those who have a high cost of living. If you have a high cost of living, debt consolidation loans California might be a good option for you.
In addition to simplifying the payment process and reducing your fees and interest, debt consolidation has a psychological effect. You will feel better knowing you have one debt to pay rather than multiple debts. Sometimes, knowing that there are several payments to worry about can be stressful. You will see your debt as one large debt and you will be able to track your progress.
If you choose to use debt consolidation, your credit could improve as you pay down debts.
Which One Should You Choose?
When it comes to debt, every person’s situation is different. Do your research to figure out which of these two options is the best choice for you personally. Compare the differences with Christian Debt Counselors so that you can make an informed decision on which option is the best for your situation.
It can also help to talk to a debt counselor who can give you their input about your choice. This can help you to make the right decision. They have the necessary expertise and can give you the help that you may need.
Keep in mind that managing your finances and getting out of debt is very important and very personal. This is not a decision that should be taken lightly. For this reason, it’s always wise to consult a professional. Make sure you’re working with a professional you can trust so that you get the best advice possible.
If you are in debt and are trying to find a way out, debt settlement and debt consolidation are two of the best ways for you to start living your life free of financial strain. Do your research and get the professional help you need to kick your debt!
If you feel like you are drowning in debt, give Christian Debt Counselors a call today! They can assess your personal situation and give you the guidance you need so that you can make the right decisions and begin living your best life—debt-free!