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Debt Consolidation Alternatives to Personal Loans in Atlanta

Having a credit card debt is an issue that can make your debt spiral out of control. Credit cards usually have high-interest rates, and making minimum payments each month may take you a long time to pay. Much of the payment amount against personal loans in Atlanta often goes to the interest charges. It is very easy to get discouraged.The best way to recover your situation and save money is by getting a debt consolidation loan.

A debt consolidation loan is usually taken to cover the existing credit card balances and other debts. It comes with fixed monthly payments. With debt consolidation, an individual can pay down the debt faster, at a lower interest rate. Furthermore, the payment goes straight to the principal and not to the interest. In this way, you will have one loan, with one monthly payment that will help to improve your credit score.

However, there are other options to bad credit debt consolidation loans that offer lower interests. They provide loans to people with bad credit whose personal loans in Atlanta have not been approved. Such options include:

Credit Unions

Credit Unions offer low-interest loans to members only. The likelihood of getting bad credit personal loans Atlanta from a Credit union increases if one has been a member for a long time. They offer low-interest loans, and your personal loan can be discharged in a bankruptcy if you fall behind on payment. Credit Unions have quick and straightforward loan application processes.

Debt Management Plan (DMP)

Debt management plans are provided by credit card debt consolidation companies where all your cards are closed. Also known as non-profit credit counseling, debt management plans are designed by the debt consolidation company which will reduce your interest rate and develop a repayment plan with all your counts. In this way, you pay one monthly payment to the company, which will be dispersed to your creditors without their fees. The debt relief program doesn’t require you to have good credit. All your accounts will reflect on your credit report as being in a DMP, and you will remain under the program until you have completed it. You can use a debt consolidation company to consolidate your bad credit personal loans in Atlanta.

Debt management plans will help consolidate your debt at lower interest rates. But you have to know that they come with monthly fees, and black marks will be included in your credit report. You will also not be able to get new credit while under the program.

Home Equity Loans and HELOC

Home equity can be used as collateral for a loan. The home equity line of credit works the same way as a credit card where your home equity will be converted to cash. Home equity loans have much lower interest rates compared to debt consolidation programs. It is a cheaper debt relief option, and you can use it to pay off your credit card debts. They offer long terms of between five to seven years interest which is tax deductible. This means long repayment terms with low monthly remittances. The downside with the home equity line of credit is that your home will be foreclosed if you fall behind on payments. The loans are also not legible for bankruptcy.

Cash-Out Refinance

Cash-out refinances work like home equity loans. With a cash-out refinance, you have one payment to one lender who will refinance your initial mortgage and give you 80% of your home’s value in cash. This method has lower credit requirements, and you can qualify for cash-out refinances with bad credit. The interest is tax deductible with low rates on the original mortgage. The disadvantage is that cash-out refinance comes with high upfront costs and your home undergoes foreclosure in case you fall behind on payments.

Balance Transfer to a 0% Interest Card

This is where you transfer your high-interest balances to a no interest card. It will enable you to pay off your debts quickly and save you money in interest. Balance transfer requires that you have an average credit rating, not ideal for those with bad credit. You can qualify for zero interest for twelve to twenty-four months. The downside is that most cards have a maximum of $10,000.

Debt Settlement

Debt settlement is when a debt is charged off. All your accounts will be forwarded to collections, and your debt settlement firm will negotiate an agreement with creditors, usually between 40%-60% of the initial balance. You will be remitting payment to an escrow account on a monthly basis. You can pay in full or within twelve to forty-eight months. With debt settlement, you only pay a portion of your debt back. But debt settlement firms charge high fees, affecting your credit rating.

You have an option to settle your credit card debts yourself. You can talk to your creditor to give you a settlement on a lump sum payment to avoid fees. A debt settlement allows you to pay back your debt without interest and does not require a credit score to qualify. However, your credit rating is going to drop and will take some years to recover. During this time you will not qualify for new loans or credit. You’ll also incur high fees, and your creditors may sue you.

Bankruptcy

This should be a last resort in your efforts to get rid of your debt. You only qualify for bankruptcy if you can prove that you are deep in financial hardship. It stays for seven years on your credit report, and it’s a cheaper option for your debts to be discharged in chapter 7 bankruptcy. To file for bankruptcy, you will need an attorney. Your credit rating will drop, but after a few years, you are going to recover. If you don’t qualify for chapter 7 bankruptcy, you will have to file for chapter 13 bankruptcy and repay your debts through a repayment plan. Student loans are not included when filing for bankruptcy.

Let Alex Miller Credit Repair Help

When selecting options for consolidating your personal loans in Atlanta, you have to consider things like interest rates, fees, collateral, lending terms, and much more. Are you looking for professional advice on improving your credit score? That’s exactly what we do at Alex Miller Credit Repair. Call one of our specialists at 877-503-9737 or email us for free consultation.