Lower Monthly Payments In One Fell SwoopMay 25, 2010 - 2:01 am
There are many reasons why people have difficulty paying debts. Illnesses or periods of unemployment, however brief, can put people behind in meeting their obligations. Once behind, the late fees begin piling up causing more woe. What these people need are lower monthly payments to take the strain off their budgets and allow them to regain ground. Debt management programs are designed for people who cannot make the minimum payments on unsecured debt. These programs lower monthly payments by lowering balances and interest rates; consolidating debt into one payment; and working out a debt repayment plan. Lowering monthly obligations is the key element for the plan to work.
Debt management companies work directly with creditors to negotiate lower balances on each of the consumers’ unsecured debts. Examples of these include credit cards, student loans and medical bills. Taken into account are interest rates, which are often reduced. Since many consumers have high credit card balances, a reduction in credit card rates can mean a substantial reduction in the monthly payment. Very often, the burdensome late fees are also waived which trims down the amount owed. The lower balances, interest rates and late fees when combined with a consolidated payment, make repayment even easier.
Juggling several delinquent loans with different due dates adds to the struggle for those who have fallen behind in their payments. The debt management company’s ability to pull all these debts together into one bill makes repayment easier. Budgeting for one monthly payment is less problematic and easier to manage than budgeting for several. Two major problems have been solved by lowering the payments and consolidating them. Now a plan must be structured that fits the creditors’ and debtors’ needs.
The details of how the payments are applied and how long the payments continue are part of the repayment plan. It is important that the payment amount is affordable and can be met each and every month. The payment due date can be fixed at the time of the month that is most convenient for the consumer. It is easy to fall behind due to unforeseen circumstances. This is the chance to make each payment on time and rebuild credit.
Being overwhelmed by debt is extremely stressful and makes people feel as if there is no way out. Debt management services provide hope and concrete plans to alleviate the burden. By working with creditors to lower balances and credit card rates the pressure is relieved. Merging the now reduced payments into one affordable monthly bill strengthens the consumer’s ability to make the payment. Working out a repayment plan, allows the consumer to see how long it will take him to successfully rid himself of debt.