Federal Student Loan Consolidation
Another area where the government is helping to provide consumers with debt relief is in the area of federal student loan debt consolidation. This program may allow debtors to consolidate all federal student loans into a single, lower interest rate loan and make a single, easier payment each month. It is important to note that this loan consolidation program only applies to federal student loans and not privately funded loans. For more information and assistance, go to the U.S. Department of Education’s Federal Student Aid page.
Establishing And Maintaining Credit
Two of the many challenges for low-income families are establishing a solid credit history and maintaining good credit when you do.
Equifax, one of the three major credit bureaus in the U.S., estimated in 2020 that there were 25 million consumers who were credit invisible. That means they have not used a credit card or taken out any loans that would tell lenders how good they were at paying things off. Equifax judged another seven million people to be credit unscorable meaning they had used so little credit that there wasnt enough information to given them a credit score.
Lacking a credit history, low-income consumers either wont get approved for a loan or if they do, they face much higher costs to use credit to purchase a home, a car or any big-ticket item.
Higher-income consumers obviously possess more money, better lifestyles and more luxury items, but they also have more ways to get and keep good credit.
The Consumer Financial Protection Bureau said low-income consumers are 240% more likely to start their credit history with negative records, such as a debt collection. Higher-income consumers start with positive records, such as opening a credit card or getting a co-signer who has good credit.
A Few Debt Relief Options You Want To Avoid
The three options outlined above are not the only options that consumers can use. There are other ways to find debt relief we just dont recommend them. At Consolidated Credit, we promote a do no harm strategy when it comes to debt relief. In other words, your debt solution should not put you in a worse position than when you started.
Each of the solutions above when used correctly can eliminate your debt without causing credit damage or making your financial situation worse. Other solutions can decrease your credit score or negatively impact your long-term financial plan.
For instance, you can:
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Payday Loan Debt Relief
If youre in trouble with payday loans, then debt settlement is usually the best option. These debts carry rates of 300% or higher. Finance charges stack up quickly. You want to get out of debt for a percentage of what they say you owe.
That being said, if you have a few payday loans but most of your debt problems come from credit cards, you can include payday loans in a debt management program. This will consolidate the payday loans with your other unsecured debts. As a result, you can stop all those Direct Debit transfers that are draining your accounts and causing added fees.
On the other hand, if the bulk of your issues are with payday loans, use a debt settlement program.
Implement A Debt Reduction Plan
You basically strategically arrange your bills and make the largest payments possible on one debt at a time. You find as much cash flow as possible in your budget by eliminating expenses, then target each debt successively.
We offer resources that describe how to implement an effective debt reduction plan.
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Get A Handle On Your Debt
Its often surprising how quickly little things can develop into big problems. A few leaves of duckweed can carpet an area in the seeming blink of an eye. And a few credit card charges can grow into thousands in debt before you know it.
Unfortunately, getting into debt always seems to be quicker than getting back out of it. No matter which type of debt relief you choose to use, understand that it will never be an overnight process. It can take years to reach debt freedom, so be patient.
Avoid Taking On More Debt
Don’t take on more debt. If you continue to spend more than your income, it will be difficult to become debt-free.
If you’re considering borrowing more money, take a close look at how it would impact:
- your existing debt payments
- your ability to save for other goals
You’re at risk of no longer being able to manage your debt if:
- you’re already having trouble making your debt payments
- you’re close to your credit limit and would have trouble making higher payments if interest rates increase
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National Debt Relief: Best Company Overall
National Debt Relief is our top pick for the best debt relief service of 2021. National Debt Relief was founded in New York in 2009. Since then, it has become one of the largest and most respected debt settlement companies in the nation with accreditations from the American Fair Credit Council and the International Association of Professional Debt Arbitrators as well as an impressive A+ BBB rating.
In line with its mission of helping clients reduce their unsecured debt, National Debt Relief has a track record for settling many clients debts for just 30% of their total debt. The company is also known for its overall transparency, outstanding customer service, and money-back guarantee.
National Debt Relief provides a wide array of debt settlement services, including business debt, credit cards, lines of credit, medical bills, personal loans, and student debt. However, the company does not handle mortgage loans and back taxes.
Enrolling in one of the National Debt Relief programs is easy you can sign up over the phone. Next, youll receive a free consultation with one of the companys debt counselors. After discussing your situation and determining a solution, youll set aside a specific amount of money in a dedicated account each month. You will use this money to settle your debt for less than what you owe.
In the meantime, the company will help coordinate your efforts and negotiate with creditors on your behalf.
Federal Student Loan Repayment Plans
The government offers eight different plans that make it easier or more efficient to repay federal student loan debt.
There are two plans for borrowers that want to get out of debt as quickly as possible:
These programs consolidate eligible federal student loans into a single monthly payment. If you have federal loans that dont qualify for these programs, use a Federal Direct Consolidation loan. This helps ensure all your federal loans are eligible for relief.
And if that seems like an overwhelming number of choices, then be patient. President Trump proposed that Congress should reduce the number of plans from eight to three, to make things easier. But for now, ask your federal student loan servicer for more information about which plans are right for you.
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What Is Debt Consolidation
If youre wondering about the difference between debt settlement and debt consolidation, here are some details to keep in mind. Where debt settlement involves working with a debt relief company to settle your debts for less than what you owe, debt consolidation requires you to take out a new financial product to consolidate all your existing debts.
With debt consolidation, youll move all your old debts to the new loan with a lower APR or better terms. While the goal of debt consolidation is saving money, debt consolidation can also help you go from paying multiple debt payments each month down to just one.
Are Government Debt Relief Programs Real
Youve heard about Uncle Sam offering debt relief for one thing or another, but are government debt relief programs real? Yes, they totally are. But whether theres one that will help you with your financial situation is another story. Lets look closer.
If youre looking to get out of credit card debt, the government cannot save you. Lets just put that out there. Now, you can file bankruptcy, which is a government-sanctioned financial strategy. But because of the enduring stain it puts on your credit, you want to avoid that move.
Still, the government has a vested interest in you staying out of serious debt. Why? Because if youre struggling to pay your student loans or, say, medical bills, youre loathe to buy a house or make other large purchases. And that doesnt do anything for the nations economy.
So, what kind of debt relief does the government offer?
Help with Mortgages
There once was a popular government debt relief program for mortgages called the Making Home Affordable program. Sadly, that program is no more. However, Fannie Mae and Freddie Mac have stepped up with certain high-loan-to-value refi programs, and lenders are now expected to do their part to offer loan modification programs to make your payments more affordable.
Help with Medical Bills and Essentials
Help with Student Loans
Help with Legal Protection
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How To Get A Government Grant To Pay Off Debt
As there are many needs of the people which can be fulfilled by just financial help. But as we earlier said, these financial grants are for the people who are in need badly and they need money to fulfill their basic needs and for the security of their family. These grants are not for paying credit card bills, for purchasing a car, or pay other types of bills. If you have any type of purpose and need financial help for it. then please dont go to the government office for this. Because if you do this, then the employees will laugh at you and also ignore you. because the grants are for helping the people not for paying their expensive bills or fulfill their high dreams.
Thats why here we mentioned again that there is no grant to fulfill the dreams of a person or their high valued expenses. Or there is no financial help for the individuals to pay all the bills which they have.
Have you find yourself to be eligible for any special class of the grant, but still you are thinking that how to get the grant to pay off debt and wasting your time and efforts? Then do not worry, we are here and cover you from difficulties that you face.
Here are some of the best and straightforward and efficient tips are given for getting a personal grant. One can use them and get the grant with ease. These are:
Help In Paying Personal Expenditures
Many people think that with the use of grants and schemes they can fulfill their luxurious dreams, but we earlier said that these grants are given to those people who are really in need and cant afford even the basic things of their daily routine life. And thats why no government or another organization provides grants. For purchasing high-cost things, credit cards are given to people who need them. But if there is any person or individual who needs to wear the uniform for their work but cant afford it, then there are grants are available to help them.
One can find the local career centers in their area, from where they can get grants to buy clothes for their work. Also, if you cant afford your childs school uniform, then there are family service centers are also available from where you can buy the school uniform for your child as well.
The disabled people who are looking for employment maybe they will get the grant money, with the help of the Vocational Rehabilitation Program. They can use this grant money for buying wardrobes and can change their profession with ease. Even there are other ways from where they can buy the uniforms and clothes for themselves and their family. Like if they participate in Salvation Army programs or other programs.
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Can You Find Debt Forgiveness On Your Own
There are a few ways you can get proactive and start finding solutions when things start to get tight.
Create a Budget
Create a budget and develop a plan for paying down debt. There are plenty of free worksheets, budget templates, and many mobile app options to help you with this. Moreover, a budget will help you track your spending and help you identify areas to improve in.
Consolidate Your Debt
Consolidate debt into a lower interest credit card or a personal loan, if you qualify. This solution is only going to work if you have your budget in place and you can make the payment. Otherwise, you may end up in worse condition, with more debt than before.
Request a Lower Rate
Another option is to call creditors yourself and ask for a lower rate. This probably wont work, if you are already missing payments or if your credit cards are maxed out. If you are still in good shape, be firm but polite, and be persistent. Their automatic response will probably be no, so ask to speak to a supervisor.
If you can pay down your debt, on your own, that is usually the best way to go. You will feel an incredible sense of accomplishment and your , over time. However, it may not always be possible and if your minimum payments are really high, it may take an unreasonable amount of time.
Are There Any Government Debt Relief Programs
No, there are no government debt relief programs for individuals struggling with debt in general. In fact, government organizations like the Consumer Financial Protection Bureau and Federal Trade Commission warn consumers against using debt relief companies.
That’s because debt relief companies often don’t disclose the risk of their programs. Since these programs usually require you to make monthly repayments which many enrollees already struggle with many people aren’t able to complete them in full. In some cases debt relief clients can face lawsuits for nonpayment and end up filing for bankruptcy.
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Work Directly With Your Creditors And Your Financial Institution
Contact your creditors to discuss your financial situation with them directly. Your creditors are the companies you owe money to.
They may offer:
- a lower interest rate on your debt
- to extend your payments over a longer period of time and reduce your minimum monthly payment
- to consolidate your debts into one loan
When Can I Get A Government Personal Grant
The government always stand with their citizen, they have just one motto that every citizen will get the best way to live their lives and if they are facing any crisis then the government help them to resolve their problems and come out from their bad time. This government provides grants in different ways. Such as they provide grants to the people for their child care, kids school supplies, to pay their bills.
Even some grant programs focus on paying the hospital bills and provide proper treatment. When you look for government grants you can find lots of grant programs. These grant programs also include long-term investments for example purchase a house and others. Thus, there is a need to find the government grant according to your need and use them.
Many people have a question that what is the time to seek a personal grant? There is no time to seek help because whenever you need help you can look for grants from the government. When you are seeing that you are not capable to pay the bills and handle the expenditures of your house, and you need financial help then you can look for financial grants. The issuer does not expect any return payment, and therefore you will lose only one thing and that is your time and efforts. But when you use them for finding the grant you will be the lucky one and get proper help to pay your bills or pay the debts.
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Government Help With Income
Believe it or not, the government doesnt want you saddled with student loan debt. Why? Because if youre struggling in that area, you cant afford to buy houses or make other large purchases that help stimulate the economy. Thus, the government offers a variety of programs that can lower your monthly payments to something you can afford. Thats right: you can get help based on your earnings and family size.
Weigh Your Options For Debt Relief
The credit counselors job is to provide all the information you need to make an informed decision to get out of debt. The counselor can help you understand how a debt management plan through a credit counseling agency will work. They will also explain how this solution differs from others, like debt consolidation, debt settlement, and bankruptcy.
Once they answer all your questions, you may decide to explore other options before you choose a solution. As you research other options, these free resources can help you zero in on the best solution for your needs.
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