Are you struggling with credit card debt or personal loans? You’re not alone. According to the New York Federal Research, consumer debt reached $14.56 trillion in 2020. Credit cards alone is about $56.31 billion.
Thankfully, there are ways on how to get out of debt by enrolling in a debt management plan. It’s a repayment plan by credit counseling agencies to help consumers get out of debt. Though one should be aware of the debt settlement pros and cons before finalizing anything.
If you have many credit cards or loans and don’t know how to repay them all, you can contact a credit counseling agency for help. A professional will review your finances and recommend the best debt management solution. They can help you combine all your debts into one single payment and with lower interest fees.
The benefits of a debt management plan include making affordable payments and then helping you become debt-free faster. Down the road, it can make your life peaceful and help you deal with financial stress as you will no longer have to think about paying a lot of consumer debt.
Should You Consider Debt Management?
There are advantages to enrolling in a debt management program. You are only paying one single payment with lower interest fees. No more thinking about paying for different credit card debts or loans. No more persistent and annoying calls from debt collectors or credits. It’s an option for you to finally solve your debt problem.
However, there are downsides to a debt management program. It may not be a good idea, especially when you’re struggling to make ends meet or having trouble paying for your mortgage. If you heavily rely on your credit card to pay for your food or utilities, then the debt management program may not work for you.
When you enroll in a debt management program, you must have enough funds to still save money, just in case unexpected things happen. Access to an emergency fund would really come in handy, especially when you’ll be committing to several months of paying for your debt.
Keep in mind that enrolling in a debt management program is noted on your credit report. However, when you are consistent with the payment, your credit score can still climb.
Is it the Best Option for You?
A debt management plan can immensely help you so long as you also commit to it. Remember, you are still paying your debt, albeit in just one single payment. Also, not all debts are covered. Mortgage and car loans are excluded, so this means that you will still need to budget your money well. Most importantly, late payments can be costly. You could lose the lower interest rates for your plan.
Before deciding to enroll, ensure that you really take time to think about it. Also, make sure that you’re willing to do everything you can to pay to finish the program. With the right discipline, a debt management plan can help you get out of debt and retake control of your life.