Debt Management Plan – The Right Choice to Pay off Your Credit Cards Quickly

| April 9, 2013
Debt Management Plan

Debt Management Plan

Are you overwhelmed with your credit card debts and not sure about what to do next, then you could opt for certain options like the bankruptcy, debt settlement and loan consolidation. However, you need to have a proper debt management plan, in order zero your outstanding balanced owed to the creditors.

With Debt Management Plan you can schedule your payments periodically and focus on reducing the balance outstanding, which in turn will help you pay less interest charges.

Why should you opt for external help?

If you have more creditors, then you need to make arrangements to clear your debt by paying the amount to the bank in small installments for a few years. However, in case you do not owe too much, you could zero the balance in a matter of few months. Opting for external help to clear your loans is any day a good idea. These experts will deal directly with your creditors on your behalf. Besides, they request the loaners to reduce the rate of interests, lower your monthly repayments, and stop additional charges like late and over the limit charges.

Once your payment terms have been negotiated, all you need to do is pay one installment each month to your DMP service provider. They will then allocate your funds to all the different creditors. Any consultant will charge you a nominal fee, which is way lesser than paying huge interest charges on the balance owed.

Choose the best DMP consultant

There are many companies that offer DMP services and promote it through the internet. You could go with any that suits your needs and more importantly, fits your budget. However, it is essential that you do your homework and be careful while choosing a settlement company.

Opting for a non profit company is a better idea. The reason behind it is that you know they are legitimate and their only motive is to help you pay off your loans. Besides, you know that they are the members of National foundation of credit counseling (NFCC).

Advantages of opting for settlement companies

  • The most important one is they get you out of the your debt
  • They do not charge you a fortune to take up their services
  • They do not kill your credit rating
  • No payment needs to be made to the consultant till you are happy with the negotiation and repayment plan has been set according to your convenience
  • They review your financial condition and help you figure out where you are and where you need to be
  • These consultants prepare monthly budget for you taking into consideration the income you earn and the expenses
  • Save you from filling for bankruptcy. It has 7 years of negative impact on your credit history and social life
  • Each person is different from the other and so are their situations. These specialists design a settlement plan after considering your situation and the same is not implemented for the other customers

What happens while DMP is taking care of your finances?

There are a few things that you need to agree upon while being rendered by a DMP service provider.

  • You cannot apply for new loans or credit while undergoing this program, and if your apply for it, any bank or financial institution will reject your application
  • You cannot take up more credits on your existing loans. This mean you cannot use your credit cards anymore or add more funds on the existing outstanding balance.

To conclude, we all make mistakes in our lives, but to over come and not repeating them is the wisest thing to do. There is no harm in looking out for help when you need it the most. If you want to be liability free and lead a happy life, then debt management plan is the ultimate solution.

Author Bio:

Myke Thomas is an investment banker who has worked with a variety of financial firms. Recently, he has become quite interested in the trading of annuities, similar to those that are handled by the financial firm JG Wentworth.

Debt Management Plan – The Right Choice to Pay off Your Credit Cards Quickly

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