One of the ways through which people have survived hard financial times is via credit card debts and other forms of debts.
Unfortunately, sometimes the payment plans can take a toll on us, and we end up feeling like there isn’t a way out.
The old saying – where there is a will there is way – still, holds. What you desperately need is the right debt management program. It is not necessary for you to take another loan to pay your unsecured debts.
What is a debt management program?
A DMP is a carefully designed financial plan that allows you to pay off an unsecured debt without having to take out a loan. Often, debtors are required to stop using their credit cards, and then make monthly payments to their preferred credit counseling agency. Ideally, your monthly payments and interest rates are lowered to a level that doesn’t require you to stretch your finances excessively.
An often misunderstood financial plan, debt management program is the most appropriate solution for people who are struggling to stay afloat due to credit card debts, medical bills or over spending.
How does it work?
For starters, you will need the help of a credit counseling agency that will work with your creditors – on your behalf. Their job is to negotiate fewer fees and a lower interest rate. Upon securing a favorable agreement with your lenders, you will make one monthly payment to your chosen agency. Your credit counselor will then divide the payment among all your creditors – as per the agreement.
At this point, you realize that you have another task of choosing the right credit counselor. How do you go about it?
Consider the following:
1. Reputation
Pick a company with an exceptionally good reputation. To choose from the best, look for an agency with accreditation from the Financial Counseling Association of America or the Better Business Bureau. Further, counselors working with the organization must be certified and accredited. Don’t go for anything less.
2. Customer testimonials
Besides the accreditation and relevant certifications, find out what past or existing clients have to say about the services of a company you are eyeing. Top debt management program companies avail testimonials from delighted customers for you to read.
A personal online research is equally crucial. Look for reviews on the Internet, and also ask your friends or people you trust for excellent recommendations.
3. What are the fees?
Nonprofit organizations provide hardship programs for individuals not able to afford the costs. If it is not being offered to you for free, establish how much you will be charged. As far as the single monthly payments you will be making are concerned, understand how much goes towards the management, and how much goes towards payment of your debt.
Upon selecting a debt management program, insist on a written price quote before you begin making the agreed monthly deposits with the agency.
These are some of the key facts associated with debt management programs. Did you know these plans exist? If not, perhaps your friends do not know about it either. How about sharing this article on your Facebook page, your Twitter account, or any other social site? Enlighten your friends, and at the same time, give yourself the opportunity to know what they have to say about DMPs – at least before you decide to go ahead with it.
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