Is Enrolling in a Debt Management Program the Right Solution for You?

Debt management has a stigma in the financial mainstream of being a solution only for those who are in deep financial trouble. However, many people who are far from the brink opt for debt management programs, as the very reason that they exist is to keep a borrower from heading into financial despair. What a borrower has to consider when researching debt management is if the debt management program is right for their financial situation as it exists currently. Below are a few checkpoints to consider if you feel that you may be in the market for a debt management program.

People in debt management programs usually have decent credit scores

A debt management program is usually meant for those with debt of more than $10,000, and some debt management programs actually do have minimums to keep from wasting time on cases that may just require more financial discipline from the individual. However, the debt management program is meant to keep a borrower from having to take drastic hits on a credit score. Because some debt management programs are unsecured reorganizations of debt, a borrower will get a much better deal if he or she has a medium to high credit score.

People in debt management usually have a steady source of income

In order to qualify for many debt management programs, a borrower must have a steady source of income. A restructuring of debt does not necessarily mean that the monthly payment will be forgiven. On the contrary, although sometimes the principal amount may be reduced, a monthly payment or installment will still normally have to be given to creditors. The payments can actually be stretched out so that people using a debt management program can actually increase their credit score, but the payments do have to be paid on time.

Debt management isn't meant to be a crutch

Those borrowers that offer debt management should not have a history of overspending or buying frivolous things on credit cards. Debt management is just that – providing a program of management for debt. This means that the borrower may have to cut back on some luxuries until the debt management program is over. Sometimes, but not often, the debt management program will go beyond discussing debt with the creditors to actually restructuring the budget of the borrower. However, this is a luxury that should not be counted on. The debt management representative should be spending all of his or her time restructuring the debt with the creditor or creditors.

For those who find themselves up against a wall, a debt management program can relieve a lot of stress by lowering monthly payments, and allowing more of that money to go toward the principle. Such programs will affect your credit during the duration of the program, so it's important to carefully consider whether it's the best decision for the circumstance. Ultimately, it's just good to know there are options other than bankruptcy.

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How students can repay their credit card debt and stay financially fit

Are you a student with multiple credit cards? If you’re already drowning in a sea of debt as your parents haven’t equipped with you enough financial knowledge, you must be looking for some options to get out of the red. As students have their entire future left, they have to be very careful about their personal finances so that they don’t tarnish their credit score even before it is built. All employers and landlords will check your credit score before lending you with a new line of credit or before hiring you within their organization or even giving you a space to stay. You must prove that you’re financially worthy in order to stay afloat. student loan consolidation is a good option that you can choose in order to get out of debt. Have a look at the benefits of consolidating your credit cards.

1. Lower interest rate: As you enroll yourself with a debt consolidation program, the debt consultant will try to lower the interest rates on all your accounts so that you can easily repay the amount in small and affordable monthly payments. With reduced rates, the monthly payments will also be reduced and therefore the student debtor will also be able to save money every month.
2. The monthly payments will be lowered: As you can extend the repayment period on your credit cards, it is undoubtedly a fact that the monthly payments that you have to make in a particular month will also be lowered. You don’t have to make further arrangements in order to make your credit card payments.
3. A single monthly payment: When you consolidate your payments through a debt consolidation program, you need not make multiple payments to multiple creditors as all you have to make is a single monthly payment to the program. You’ll be saved of the hassles of remembering multiple due dates of multiple credit card accounts.
4. Waived off late fees: The late fees that you’ve accumulated for late payments will also be waived off under a student consolidation program. You can just eliminate all your penalties and thereby reduce the monthly debt payments too.

Thus, if you’re a student who has been knee deep in credit card debt, take immediate steps to protect your credit score from being hurt. Enroll yourself in a student consolidation program so that you can get out of debt and manage your personal finances to stay out of debt.