Loans are available for all kinds of purposes, and lending institutions have made loan application processes much easier. Today, all you need are proof of a stable income, some IDs, and address proof to file a loan application, and if you are lucky, you can even get the money transferred in a few days! That is the reason people do not stop to consider the implications before taking more and more loans. If you are reckless with your spending, you may get trap in a never-ending cycle of increasing debt.
Managing multiple loans at once can become a nightmare if you start struggling with the different monthly payment, the different payment dates, and the constant creditor calls. The best way out is to consult a debt settlement agency. After reviewing your case and evaluating your financial situation, the debt settlement agency can suggest the best way to deal with your debt.
The story so far is what most debt settlement reviews would tell us. However, there are several other aspects that you need to consider before going in for debt settlement. Let us look at a few possible scenarios.
Is settlement equivalent to a closure?
Say you owe a creditor $110 at a particular point in time. A debt settlement agency, in this scenario, negotiates with the creditor on your behalf and gets them to agree to a reduction. You may get a deal where you can close the loan by paying $80. From your point of view, getting this immediate reduction in the amount might make things easier. For the borrower, it is one less loan to have to worry about. However, the problem with such a settlement is that it leaves a negative mark on your credit rating.
What other charges would you pay?
The settlement agency would, of course, charge a fee for negotiating on your behalf with the lenders. When you calculate your total savings from the settlement of all the loans, you need to factor these fees in as an expense. The obvious solution to this could be for you to do all the negotiations with different lenders yourself, and avoid having to pay fees to an agency. However, you are likely to have neither the contacts nor the negotiation expertise that such agencies would. Hence, it is a good idea to pay the fees and hire a professional.
Are all debt settlement agencies equal?
The emphatic answer to that is no. Most such agencies send out attractive advertisements boasting about their capabilities and the huge savings they can provide, but not everyone can stand up to the claims. The best thing to do is to look for independent online reviews for real feedback instead of clicking on the agency’s own website. Also, such settlement companies are often accredited by government associations. So, you must check on the official sites of the concerned authorities to see if your agency is listed there.
Debt settlement can be a huge load off your shoulders if it is done correctly and by the right agency. Take your time and choose the one that meets your needs for the best results!
Isabella Rossellini is a marketing and communication expert. She also serves as a content developer with more than seven years of experience. She has previously covered an extensive range of topics in her posts, including business debt consolidation and start-ups.