Are you considering a debt management loan to reduce the interest rates on your debt and lower your monthly payments? And if you are, are you having difficulty finding a debt loan that will accomplish this? You are not alone.
Many people like yourself experience the same frustration and feeling of helplessness when searching for new loans in order to better manage their debt load. But unfortunately, the reality is that when you are already in debt trouble, you are considered a higher risk by lenders. Thus, getting a debt management loan that actually helps to improve your debt situation becomes, well, frustrating at best.
But what if you could achieve all of the benefits of a debt loan (lower interest rates and lower, more manageable payments) without having to borrow more money or qualify for a new loan? Does that sound attractive? Well, here's how you can do it.
Unlike a loan, a debt management plan (also called debt consolidation) does not involve borrowing more money or obtaining more credit, two things that can lead to worse debt problems than you have right now. And another benefit of a debt management plan is that it does not require you to have good credit in order to take advantage of its benefits. So how does it work? Here's how...
The foundation of a solid debt management plan is a strong emphasis on money management and budgeting. And since a detailed budget that you can stick to is imperative for successful debt elimination (regardless of the debt relief option you choose), this is a very good thing. In fact, the first thing that a reputable debt management agency will do for you is to complete a thorough analysis of your finances, help you prepare a budget, and then offer you ongoing money management education. Once this is in place, then your actually debts are addressed.
The debt counselor assigned to you will negotiate with your unsecured creditors (on your behalf) to have the interest rates on your debts lowered (sometimes to 0%, and usually much lower than a debt management loan) and the monthly payments adjusted to suit your budget. In addition, they will also attempt to have any credit card late fees and/or over limit penalties eliminated from your account. Once this stage of the process is complete, you will make one debt payment to the debt management company each month, who will then pay your creditors on your behalf.
Let's recap. Lower interest rates. More manageable payments. And unlike a typical debt loan which can actually extend the amount of time it takes you to get out of debt, a debt management plan aims to get you out of debt within five years. Sounds like this is a better option.
For a complete discussion of alternatives to a debt management loan, and to find the debt elimination option that is best for you, I encourage you to start with my introduction to debt help article called "Getting Out Of Debt - A Complete Look At All Of Your Options".