You won't pay down your debt any faster if you view it as a form of punishment. So reward yourself when you reach debt payoff goals. "The only way to completely pay off your credit card debt is to keep at it, and to do that, you must keep yourself motivated," Bakke writes. Just make sure to reward yourself within reason. For example, instead of a weeklong vacation, plan a weekend camping trip. "If you aim to reduce your credit card debt from $10,000 to $5,000 in two months," Bakke writes, "give yourself more than a pat on the back when you do it." 
The second type of debt consolidation you may hear about are debt management plans offered by debt settlement companies. With these programs, the debt settlement company may be able to secure lower monthly payments with your creditors by negotiating a reduced balance on your accounts. You then make one "consolidated" payment to the debt settlement company each month, and in turn the company makes payments to each of your creditors on your behalf.

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Not into starting your own business? Then consider becoming a driver for Lyft or Uber. A pizza delivery job at night could also bring in extra money. You can even deliver other types of food in your spare time by working for places like Uber Eats or Grubhub. Sure, you’ll have to put aside your pride and give up some nights and weekends of downtime. But that’s a small sacrifice for extra cash in your pocket.


By contrast, you usually still owe your original creditors when you enroll in a repayment plan. For example, on a debt management program, you still owe your creditors even though you enroll through a credit counseling agency. You make the payment to the agency, but they distribute the money amongst your creditors on your behalf; the agency is just a go-between.
This is a very interesting scenario and you’ve raised some good points and questions. If I were you, I would be very concerned about the $3,000 loan. I would probably want to pay that off as soon as possible. Sure, you may lose a hint of efficiency in the process, but you’ll be saving against A LOT of risk. You absolutely do not want that to go up to 29% if you can help it–it’s not going to have safety nets like your student loans (if they are federal) and you never know what might come up unexpectedly. Once that’s out of the way, you could return to the student loans as normal, using the ladder method.
For individuals and families trying to figure out how to pay off debts, American Consumer Credit Counseling (ACCC) provides nonprofit credit counseling, credit card reduction and consumer debt management services for consumers nationwide. Our certified credit counselors provide financial education for anyone wanting to learn how to get out of debt and how to eliminate credit card debt. As alternative to expensive debt restructuring services and credit card debt consolidation loans, our debt management plans are a kind of credit card relief program that have helped thousands of people pay down credit card debt by consolidating payments and reducing interest rates and finances charges. We also offer bankruptcy counseling, housing counseling and other financial education services for help getting out of debt.
While I know that we (my family) will not be paying off all of our debt in 9 months. I have finally gotten my husband on the bandwagon. Anyway, after 4 months of unemployment there is finally the realization of debt and the toll it’s taking on the family. I am happy to say that today, we have paid off our first credit card! We still have 6 more to go, plus student loans, but you gotta start somewhere. Thanks for the encouragement!
Non-payment: If the company asks you to stop making payments to your creditors — or if the program relies on you to not make payments — it must tell you about the possible negative consequences of your action, including damage to your credit report and credit score; that your creditors may sue you or continue with the collections process; and that your credit card companies may charge you additional fees and interest, which will increase the amount you owe.
Borrowers must have the income and creditworthiness necessary to qualify, especially if you're going to a brand new lender. Although the kind of documentation you'll need often depends on your credit history, the most common pieces of information include a letter of employment, two months' worth of statements for each credit card or loan you wish to pay off, and letters from creditors or repayment agencies.

Debt consolidation loans are used solely to combine all your debts. These loans may be offered by major banks or from so-called non-profit debt consolidation companies. Be careful about using debt consolidation companies to consolidate debt. These loans often include extra fees, making the cost of the loan much higher. Avoid borrowing money from one of these companies. Instead, seek out a low interest rate loan from your bank or credit union for better terms and to ensure you're not being scammed.

There is an easy-to-miss link at the bottom of the site called "Eligibility Criteria". We encourage potential borrowers to look through the information there, as several states are excluded from their personal loan program, and there are other state-specific details to be aware of. Also, it states that personal loan recipients must be US citizens or permanent resident aliens, be of the age of majority in their state of residence, and must be currently employed.


Another thing you can do is to look at refinancing higher interest credit cards so that you can get a lower interest rate. There are companies like Sofi who specialize in refinancing higher balance credit cards so that you don’t have to pay the ridiculous interest rates that credit cards tend to have. Sofi has interest rates as low as 5.99% fixed with AutoPay.
If you do business with a debt settlement company, you may have to put money in a dedicated bank account, which will be administered by an independent third party. The funds are yours and you are entitled to the interest that accrues. The account administrator may charge you a reasonable fee for account maintenance, and is responsible for transferring funds from your account to pay your creditors and the debt settlement company when settlements occur.
The company negotiates on behalf of indebted consumers who are experiencing a financial hardship with the goal of avoiding bankruptcy (Chapter 7 or Chapter 13) by settling their unsecured debt at a discount to what is actually owed. The company primarily serves consumers where debt consolidation or home refinancing is undesirable or an unavailable option. They also serve those who cannot afford either their credit card minimum payments or the payments required in credit counseling.[3]
Not all types of debt affect your finances equally. To figure out what’s making the biggest impact on your budget, collect recent statements from all of your creditors. Write down the creditor, amount owed, monthly payment, and interest rate on your accounts. (Use this worksheet to refer back to later.) Knowing which debts have the highest minimum monthly payments and interest rates will help you determine which debt is costing you the most.

The creditor’s primary incentive is to recover funds that would otherwise be lost if the debtor filed for bankruptcy. The other key incentive is that the creditor can often recover more funds than through other collection methods. Collection agencies and collection attorneys charge commissions as high as 40% on recovered funds. Bad debt purchasers buy portfolios of delinquent debts from creditors who give up on internal collection efforts and these bad debt purchasers pay between 1 and 12 cents on the dollar, depending on the age of the debt, with the oldest debts being the cheapest.[3] Collection calls and lawsuits sometimes push debtors into bankruptcy, in which case the creditor often recovers no funds.
Each state has its own set of rules regarding outstanding debts. Some states don't allow a debt collector to collect a certain type of debt after a certain period of time; others limit the amount of time when a creditor can sue you over an old debt. Either way, you should find out whether the statute of limitations has passed regarding an old debt you may owe. If it has passed, you can likely forgo repayment without worrying about financial, legal or credit consequences plaguing you.
Perhaps one of the most obvious examples of industry consolidation can be seen in the evolution of public accounting over the twenty years. In 1986, nine large accounting firms dominated the industry. But in 1987, Klynveld Main Goerdeler (KMG) merged with Peat Marwick Mitchell to create KPMG Peat Marwick, reducing the number of top-tier players to the "Big Eight." Then in 1989, Ernst & Whinney merged with Arthur Young, and Deloitte Haskins & Sells merged with Touche Ross, further consolidating the industry to the "Big Six." In 1998, the merger of Price Waterhouse and Coopers & Lybrand created the "Big Five," and the dissolution of Arthur Andersen in 2002 left the "Big Four."
If your answer is “Having one card totally paid off,” then throw as much money as you can toward the card with the lowest balance first, says Curtis Arnold, the founder of CardRatings.com, a credit card comparison site. (Yes, do this even if you need to pay only the minimum on your other cards in the meantime.) If your answer is “Boosting my credit score,” then tackle the card with the highest utilization rate (that’s your balance divided by the card’s limit). “Since your score takes a hit if you use more than 20 percent of your available balance, bringing the utilization rate down just 20 percent could significantly increase your score,” says Arnold. And if your answer is “Paying less in interest,” then the tried-and-true method is to pay off the card that has the highest interest rate first.
Life Loans is not a lender or a credit card consolidation negotiator. Their service is free, but their primary focus is to offer personal loans. If you're looking to apply for a single loan to replace your existing loans, they may be a good choice; however those looking for help with credit card debt will not find specific information on this site for their situation.

Cashing in your life insurance may be a viable debt payoff strategy because it will give you a chance to pay down larger amounts of debt quickly. If you feel like you are drowning in debt and don't have beneficiaries that need to benefit from your life insurance policy — for example a spouse or children — then it might make sense to use those funds to pay off debt.
More than 1 in 10 Americans who have credit cards (11%) make only the minimum required payment. Minimum payments are enough to cover the interest on your account, so they can keep you from falling behind, but they don't get you much closer to eliminating your debt. One simple way to make a huge impact is to pay double the minimum. Say you owe $2,000 on a credit card with a 20% APR and a $40 monthly minimum payment. If you could find an extra $40 in your budget and you paid $80 each month, you would save $1,727 in interest and get out of debt more than six years faster.
FDR's debt negotiation experience is worth the money. Freedom Debt Relief customer reviews relate that the company has saved them thousands of dollars by negotiating with their creditors. If you're looking to settle your debt through debt negotiation, we highly recommend using Freedom Debt Relief if you receive a reasonable quote from them during your free consultation. 

It is important to remember that this part is usually for free. However, after the initial consultation, you will be given a quotation so the company can work on your debts. Be wise in selecting the debt reduction service that you will avail. No upfront fees should be charged and there should be evidence of guaranteed results before you pay for any service. In fact, there are government agencies that offer free counseling services.

You’ll Keep Your Accounts: With a debt consolidation program, your loans will continue to exist where they are now—you’re not getting a new loan or moving the debt around. You’ll make one monthly payment to your service provider, and the funds will then be distributed to your various creditors. Your service provider communicates with your creditors during the setup process and as the program progresses.
Interest rates on loans to consumers, whether mortgages or credit cards are most commonly determined with reference to a credit score. Calculated by private credit rating agencies or centralized credit bureaus based on factors such as prior defaults, payment history, and available credit, individuals with higher credit scores have access to lower APRs than those with lower scores.[10]
While there are plenty of budgeting software programs and apps, you can create a monthly budget yourself with a pen and paper. All you have to do is figure out your monthly take-home pay then write down each of your monthly bills, debts, and fluctuating expenses in another column. From there, get out old credit card and bank statements to figure out where all your money has been going and how you might allocate it better in the future.

Reputable debt relief, settlement, and consolidation companies are needed more than ever before because credit card and student loan debt are both at an all-time high. This high-debt crisis is causing new debt relief companies to open up all across the nation. Unfortunately, most of these new companies lack the experience, resources, and expertise needed to properly administer debt relief programs. There are many certified debt counselors available to help you on the internet, but finding the right one can sometimes be the first hurdle to get over.
Each state has its own set of rules regarding outstanding debts. Some states don't allow a debt collector to collect a certain type of debt after a certain period of time; others limit the amount of time when a creditor can sue you over an old debt. Either way, you should find out whether the statute of limitations has passed regarding an old debt you may owe. If it has passed, you can likely forgo repayment without worrying about financial, legal or credit consequences plaguing you.
Coming up with a plan for paying off debt may sound difficult, especially if you don’t have a financial background. But spreadsheets simplify the task, making it easy for anyone who can use a spreadsheet to make a plan to pay off debt. The snowball method is a popular strategy, and downloading one of these debt snowball spreadsheets can help you reduce your debt.
Trying to get a little bit of business advice, hope someone can help. We are struggling to make it through our slow months right now. We have about $100,000 in business debt currently active and all in good standing, we have never made a late payment. But we are getting buried with making sure we are paying all of these bills on time while still being able to order products to keep the business fully functional. We are scared we are heading towards bankruptcy or even closure. Would a debt consolidation company be able to help us? Or does it seem we are too far gone? I guess I was hoping with a debt consolidation company we could lower our monthly burden, stretching out our payment to 48-60 months.
Stick to your plan – When implementing the debt snowball plan, you need to pay the minimum amount due on all your other debts, except the one at the top of your list. Once you pay off your first debt, apply the payment from that debt to the next one – don't pocket the savings. Continue to pay only the minimum amount on all of your other debts. Eventually you will work down the list until they are all paid off.

With this kind of guidance, it is easy to see why LendingTree has an A+ rating with the Better Business Bureau. Overall, this site is informative and user-friendly. New clients can feel confident in LendingTree's services and enjoy solving their financial problems through options and possibilities. For these reasons, this company receives high marks.


While debt settlement isn’t for everyone, National Debt Relief’s program is a great choice for people with high levels of debt who are struggling due to financial hardship such as the loss of a job or a divorce. If you’re barely keeping up with your minimum payments and balances on your accounts keep growing, then you’re a good candidate for debt settlement. In fact, if your income doesn’t accommodate paying down debts, and your credit rating makes it impossible to obtain a debt consolidation loan, then the National Debt Relief program may be your best chance to address your debts and avoid bankruptcy.
Private student loans for college carry higher interest rates than government student loans, in general. Currently, rates on private student loans range between 6% and 14% compared with about 5% for government undergraduate student loans.4 You may be able to deduct the interest on a student loan, however, but only up to $2,500 a year, and only if you are a single filer earning less than $85,000 or $170,000 for married filing jointly for the 2019 tax year. If you make more than that, you can't deduct the interest.
Some borrowers who cannot repay loans may turn to bankruptcy protection. However, borrowers should explore every alternative before declaring bankruptcy as doing so can affect a borrower's ability to obtain financing in the future. Alternatives to bankruptcy are earning additional income, refinancing, obtaining support through assistance programs, and negotiating with creditors.
Some debt may receive forbearance, which allows loan recipients who missed payments to recover and restart repayments. Also, various deferment options are available for recipients who are unemployed or who are not earning enough income. Once again, it is best to be proactive with the lender and inform them of life events that impact your ability to satisfy the loan.
Hello, Julia, We are sorry to hear about the difficult medical situations you have been through. We are glad that our program has been of assistance thus far, and that you are now in a more comfortable payment plan to work towards paying off your debt. reach out to our client services department at (800) 655-6303 or [email protected] if you have any questions or comments regarding your account. Thank you for choosing Freedom Debt Relief!
A credit counseling service works with creditors to get you better terms on your loan, including reduced interest rates and lower monthly payments. You make one monthly payment to the counseling service, which distributes those funds to your creditors. Consolidating your debt payments with a debt management plan requires you to give up all but one of your credit cards, live on a budget and pay off your debt in 3-5 years.
But others prefer putting the extra payments toward the remaining card with the smallest balance. Stevens calls this the “debt domino” approach. “You order your credit card debt from smallest balance to largest, independent of interest rate, and attack the smallest debt first to get a quick win,” she explained. “Seeing the total number of balances go down can be a real ego-boost and motivator to keep going. I used this approach when I was trying to stay motivated when I was attacking debt.”
If you’re considering getting outside help tackling your debt, be sure to thoroughly evaluate credit counselors before choosing one. “Non-profit” doesn’t guarantee that services are free or legitimate. Some non-profit credit counseling organizations may charge very high fees. According to the Federal Trade Commission, a reputable credit counseling organization should:
Credit card consolidation - is it right for you? If you’re carrying a high interest rate across multiple cards, you may benefit from such services. With more and more Americans facing large medical bills, job loss, and other financial setbacks, credit card debt is higher than ever. And, with interest rates and late fees, it’s not unusual for people to get in over their heads. Credit card consolidation helps consumers to better manage their debt and get back on solid financial footing once more.
CuraDebt offers a wide range of credit card consolidation and debt counseling services. The website is organized but a bit overwhelming to read. We advise giving yourself time to carefully peruse through every paragraph so you don't miss any important detail. Overall, this is a reputable and accredited company with a high customer satisfaction rate.
With this method, you contact a company first and make a settlement offer. You offer a certain percentage of what you owe and request for the remaining balance to be discharged. You can use this method with debt collectors, medical service providers for unpaid medical bills, or with a credit card company if your account is behind but still with the original creditor.

A: A balance transfer is the process of moving a balance (how much you owe) from one credit card to another during credit card consolidation. Be sure to check with your credit card company to see if there’s a fee for transferring a balance or other impacts to your account, including how a balance transfer might change the way you pay interest on new purchases.
The little store of sovereigns in the tin box seemed to be the only sight that brought a faint beam of pleasure into the miller's eyes,--faint and transient, for it was soon dispelled by the thought that the time would be long--perhaps longer than his life,--before the narrow savings could remove the hateful incubus of debt. A deficit of more than five hundred pounds, with the accumulating interest, seemed a deep pit to fill with the savings from thirty shillings a-week, even when Tom's probable savings were to be added.
A debt management plan (DMP) will combine your debts into one monthly payment with lower interest rates. This strategy doesn’t use a loan, so your credit score isn’t factored into eligibility. In addition, your creditors will continue to get paid, meaning the initial hit to your credit score will be negligible. Your score may actually improve as you make payments over time.

Home equity loans let you borrow against your home’s equity and use the cash to pay for just about anything. This may seem like a good option because these loans often have lower rates than credit cards and personal loans. But if you default on payments, the lender typically has the right to start foreclosure proceedings, and you could lose your home.


Susan has written about everything from home inspection horror stories, to millennials and money, to the ins and outs of health insurance exchanges for Bankrate.com. She has worked at newspapers in the Southeast, including eight years as an editor and bureau chief at the Tampa (Florida) Tribune. Susan left the Sunshine State and headed to Central Europe, working for an English-language newspaper in Hungary, covering real estate and development in the wake of the fall of the Berlin Wall. She then moved to Austria, where she worked as an editor for The Associated Press and began freelancing, dealing with subjects such as the Bosnian war and the Kosovo crisis. She returned to the States in 2001 and now focuses on personal finance and workplace topics.  Her articles for International Educator magazine have been honored with the Apex Award for Publishing Excellence and the Association Media & Publishing Excel Award. Susan lives in a neighborhood of 1920s bungalows in Tampa.
You can get your credit reports from each of the three major credit reporting agencies for free once a year at AnnualCreditReport.com. It’s a good idea to review them so you don’t end up in the situation Norma found herself in, getting denied due to a mistake or negative items you weren’t aware of on your credit reports. Your credit report should also list most, if not all, of your debts, which will help you with the second step.

The term debt consolidation refers to the act of taking out a new loan to pay off other liabilities and consumer debts, generally unsecured ones. Multiple debts are combined into a single, larger piece of debt, usually with more favorable payoff terms. Favorable payoff terms include a lower interest rate, lower monthly payment, or both. Consumers can use debt consolidation as a tool to deal with student loan debt, credit card debt, and other liabilities.
Using a personal loan to consolidate and pay off credit card debt is a good option if you can find one that has a lower interest rate than your current credit card. Paying a lower interest rate will enable you to pay off more of your debt principal each month, which would help you eliminate the debt faster than if you kept it on a high-interest credit card. But be mindful: the average interest rate on a new two-year personal loan from a commercial bank in the U.S. was 10.36 percent as of May 2019, according to the Federal Reserve.
For customers who aren't sure where to begin, Upstart has a "Get Started" icon which asks them what they want to do. Upstart offers help with loan consolidation, paying off credit cards, paying medical bills, buying a car or other big purchases. Such a wide range of services is comforting to those seeking financial advice. The site also provides education to help you prepare for future financial decisions.
A third option to consider to lower your interest rate and pay off credit card debt is a balance transfer. This can be especially helpful if you can find a credit card with a 0% APR on balance transfers specifically. Just make sure you pay off the balance before the introductory period ends when the 0% APR will expire. Rates after this period can increase dramatically.
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