The American people are drowning in debt. According to Experian, the average American has four credit cards. The balance on each credit card is over $6,000.
On top of credit cards, there are many other outstanding debts that are plaguing Americans. They include student loans and medical debt. This untenable situation leaves you paying hundreds in interest charges each month.
Excessive debt can be an overwhelming situation. If you are overwhelmed by debt, read on for tips on managing it. Explore 5 debt relief options that are certain to improve your financial situation.
Transferring a balance is one way you can save on monthly interest expenses. The key is finding a credit card with a lower Annual Percentage Rate (APR).
Some cards have an introductory period with 0% APR. This could give you a reprieve from accruing interest for 12 or 18 months.
However, you should be careful to read the fine print on any balance transfer offer. Many companies impose a balance transfer fee. For instance, a 3% fee on a $6,000 credit card balance will cost you $180.
Contact the Lender
If you are struggling with debt, you should reach out to your lenders. In many cases, lenders have programs to help customers in need.
They may enroll you in a forbearance or deferment plan. In some cases, they may waive a portion of your interest expenses. Many lenders extended debt relief programs to people negatively affected by the coronavirus pandemic.
National Debt Relief Program
The National Debt Relief Program is a popular option for those swimming in debt. This company looks to restructure your debt and make monthly payments more manageable.
The company that operates this program is reputable and has an A+ score with the Better Business Bureau. For more information, view this blog for a comprehensive guide on the program.
Consolidate Your Debt
Consolidating your debt is another effective option. Here, you can roll multiple debt types into a single account.
You can save money by securing a lower interest rate. Another way to reduce monthly payments is by extending a loan term.
For example, consider that you have four years left on multiple student loans. You can consolidate under a new 5-year loan to make payments more manageable.
Refinance Your House
Many people do not realize that their home is an untapped resource. Paying your mortgage for many years leaves you with built-up equity.
You can refinance your mortgage and extract some of this equity. Then, use this cash to pay down other debts.
Solutions for Those Overwhelmed By Debt
Debt is far more common than you think. Hundreds of millions are struggling with debt also. Debt is not a life sentence and you can get out of it.
Taking steps like consolidating debt or transferring a balance go a long way. You can secure a lower interest rate and reduce monthly payments.
If you enjoyed this article about options for those overwhelmed by debt, check out our blog for more great content.