Personal Loans and Credit Card dues
2 months ago
I have many personal loans or credit card payments, I am not able to repay them all at once, please tell me what to do.
A.Dear Client,
Negotiating a debt settlement can be attempted independently if you can afford to pay the entire outstanding amount for a one-time settlement. Alternatively, third-party entities like debt relief companies can be hired to negotiate on your behalf, with payments made to them instead of creditors, along with applicable fees.
Debt settlement involves the borrower repaying a portion of the loan balance, and the lender forgiving the rest. Initiating negotiations by proposing to pay 25% or 30% of the outstanding balance for forgiveness is a common approach. However, caution is necessary due to the presence of legitimate debt relief companies and potential scams. The Consumer Financial Protection Bureau recommends checking with the state attorney general's office and local consumer protection agency for any consumer complaints.
While debt settlement can alleviate financial crises, there are risks to consider. It impacts credit scores, making it challenging to obtain credit or favorable interest rates in the future. Additionally, tax consequences and account closure with credit card companies are potential drawbacks. Seeking guidance from a certified credit counselor can help explore options and make informed decisions about settling debts or loans with the bank.
Negotiating a debt settlement can be attempted independently if you can afford to pay the entire outstanding amount for a one-time settlement. Alternatively, third-party entities like debt relief companies can be hired to negotiate on your behalf, with payments made to them instead of creditors, along with applicable fees.
Debt settlement involves the borrower repaying a portion of the loan balance, and the lender forgiving the rest. Initiating negotiations by proposing to pay 25% or 30% of the outstanding balance for forgiveness is a common approach. However, caution is necessary due to the presence of legitimate debt relief companies and potential scams. The Consumer Financial Protection Bureau recommends checking with the state attorney general's office and local consumer protection agency for any consumer complaints.
While debt settlement can alleviate financial crises, there are risks to consider. It impacts credit scores, making it challenging to obtain credit or favorable interest rates in the future. Additionally, tax consequences and account closure with credit card companies are potential drawbacks. Seeking guidance from a certified credit counselor can help explore options and make informed decisions about settling debts or loans with the bank.
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A.Dear Client,
You can try to negotiate a debt settlement on your own if your pocket permits to repay the entire outstanding at a time for a one-time settlement of dues, but sometimes it's typically done through third parties like debt relief companies, which you may hire to negotiate the settlement matter with the lender on your behalf. With this method, you will make payments to the debt settlement company rather than your creditors/lenders, along with any fees. Debt settlement is an agreement between a lender and a borrower in which the borrower repays a portion of a loan balance and the lender forgives the remainder. You may consider starting the negotiation by offering to pay 25% or 30% of your outstanding balance in return for forgiveness on the rest. But, it may be noted that while there are legitimate debt relief/settlement companies, there are also many scam operations. So, if you're considering one, the Consumer Financial Protection Bureau(CFPB) suggests for contacting your state attorney general's(AG) office and local consumer protection agency to ask if they have any consumer complaints on file about that company. Some states require that debt settlement companies be licensed, which may provide some added protection. Although a debt settlement can offload some of your financial crisis, there are also a few potential risks and downsides to consider. First, a debt settlement will affect your credit score. That will make it more difficult for you to get credit or good interest rates in the future. Another potential drawback is that when you settle debt, you could face tax consequences. Finally, when you settle a debt with a credit card company, your account is closed once the settlement is complete. So you could potentially have no credit facility to use a credit card further owing to your poor credit score. Further, a quick counselling session with a certified credit counsellor can help you to discover your options and choose the right path forward to settle the debts/loan with the Bank.
You can try to negotiate a debt settlement on your own if your pocket permits to repay the entire outstanding at a time for a one-time settlement of dues, but sometimes it's typically done through third parties like debt relief companies, which you may hire to negotiate the settlement matter with the lender on your behalf. With this method, you will make payments to the debt settlement company rather than your creditors/lenders, along with any fees. Debt settlement is an agreement between a lender and a borrower in which the borrower repays a portion of a loan balance and the lender forgives the remainder. You may consider starting the negotiation by offering to pay 25% or 30% of your outstanding balance in return for forgiveness on the rest. But, it may be noted that while there are legitimate debt relief/settlement companies, there are also many scam operations. So, if you're considering one, the Consumer Financial Protection Bureau(CFPB) suggests for contacting your state attorney general's(AG) office and local consumer protection agency to ask if they have any consumer complaints on file about that company. Some states require that debt settlement companies be licensed, which may provide some added protection. Although a debt settlement can offload some of your financial crisis, there are also a few potential risks and downsides to consider. First, a debt settlement will affect your credit score. That will make it more difficult for you to get credit or good interest rates in the future. Another potential drawback is that when you settle debt, you could face tax consequences. Finally, when you settle a debt with a credit card company, your account is closed once the settlement is complete. So you could potentially have no credit facility to use a credit card further owing to your poor credit score. Further, a quick counselling session with a certified credit counsellor can help you to discover your options and choose the right path forward to settle the debts/loan with the Bank.
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