Nebraska Debt Consolidation
The ability to make ends meet is the goal of every Nebraskan family. Unfortunately for many families, their debt woes arose from unexpected financial emergencies. Sudden medical bills, unanticipated home repairs, or an unfortunate automobile accident quickly turned into a pile of credit card debt. In Nebraska, debt consolidation may often appear to be the only solution.
But, before you jump into debt consolidation, it is important to understand the most common ways to consolidate your debt. Even then, there may be other solutions worth exploring before you take the debt consolidation plunge.
Credit Card Transfers
The primary disadvantage of credit cards is providing consumers the option to spend more than they earn. This ability to easily rack up debt is one of the reasons 18% of Nebraskans spent more than their income in 2018. However, credit cards could become part of your effort to get out of debt.
Many credit cards offer low introductory balance transfer interest rates. Moving credit card debt from a high-interest rate card to a lower interest rate card can help speed up paying off your debt. Beware though, as low introductory rates will come to an end. And if you miss a monthly payment, you can expect that low introductory interest rate to vanish along with tacking on a late payment fee.
Private loans through debt consolidation companies are readily available to those in debt. These types of loans allow you to trade multiple monthly credit card payments into one monthly payment. Consolidation loans are helpful for those who struggle to try to juggle many different payment amounts to many different companies.
While consolidation loans provide convenience, they may not always help you get out of debt any faster. In fact, in some instances, these loans can postpone your debt-free dream. Moving all debt to a single creditor can restrict the flexibility in who and how much you pay. Furthermore, not all consolidation loans can offer interest rates lower than you already have on your credit cards.
If you own a home, you have likely received solicitations from your bank about taking out a home equity loan or credit line. Because you have equity in your home, these extensions of credit are easy to obtain and usually offer attractive interest rates to boot. But there is a big catch!
Credit card debt is unsecured debt. If you default, the credit card company has little recourse other than to send you to collections, report you to the major credit reporting agencies, and at times attempt unsecured legal action. However, if you take out a loan or credit line to pay down your credit card debt, you are putting your residence – your home up as collateral. This means if you default, the bank owns the roof over your head if they file foreclosure.
Nebraska Debt Consolidation Alternatives
Debt consolidation loans may be a solution for those consistently and aggressively paying more than the minimum payments on their credit cards. However, if you are part of the 30% of Nebraskans paying only the minimum each month, consolidation loans may only delay the inevitable – default.
Whether considering credit card transfers, credit lines, or a debt consolidation loan, one thing is certain; you will be swapping one form of debt for another. None of the consolidation solutions do anything to actually reduce the amount of debt you have. If you are facing an insurmountable mountain of debt, you more than likely want a way to make some (or all) of your debt balances disappear without filing for bankruptcy.
Debt settlement programs enlist professional debt negotiators to reduce your debt balances. There are many debt settlement companies out there. To determine if debt settlement might be the right solution for you, make sure you reach out to an accredited and certified organization like Umbrella Debt Relief.