subject: Debt Settlement - How To Bring Down Your Interest Rate And Eliminate Debt [print this page] People have got used to debt consolidation and credit counseling for such a long time that they have forgotten what debt reduction actually means. Elimination of debt implies reduction of the amount owed by a significant amount. Bringing down your debt by five or ten percent does not offer any benefits whatsoever. When you have lost your job or when you are forced to accept a pay cut, a five percent reduction in the amount owed is just a ripple on the surface. Since you want real elimination of debt, you should opt for a debt settlement.
Many believe that consolidation of debt offers fantastic benefits. People conveniently ignore the fact that one just replaces a high interest debt with a low interest loan. In recessionary times, such stop gap measures offer very little relief.
On the other hand, settlement of debt brings down the original amount owed by as much as sixty to seventy percent. As far as the remaining amount is concerned, the repayment is often stretched over a period of twelve to twenty four months. Needless to say, the interest rate is also renegotiated because of low principal amount to be repaid.
It is important to employ professionals to reduce your debt. Credit card issuers often portray each and every discount offered as a very big thing. However, the truth is that they are simply trying to maximize repayments. You need a professional to firmly point out the benefits the lender has derived from your repayments. Even if you are bold enough to negotiate hard, do you know enough about debt settlement to carry out negotiations?
Lenders often continue charging high interest rates on the remaining amount owed after the settlement is finalized. Settlement implies replacement of the old contract with a new one. This means that the interest rate on the remaining amount owed should be as per the current interest rate regime. Insisting on lower interest rates will ensure that each and every cent you repay shall go further in reducing the loan amount owed.
You will end up with significant savings even after taking the fees of the professional debt settlement company into consideration.
If you are over $10,000 in unsecured debt it would be wise to utilize a debt relief network instead of going directly to a debt settlement company. Using a debt relief network guarantees that the debt settlement company you choose has been certified and has established success in negotiating settlements. They are free to use and a good starting point to begin your debt relief process.
