Alternatives to Debt Consolidation

The alternative to bankruptcy is debt consolidation, but debt consolidation has its advantages and disadvantages. Here are a few alternatives to debt consolidation.

1.    Aggressive Payment Plans

Some debtors actually “snowball” their debts. Snowballing means to pay for a debt’s minimum fee then gradually increase your repayments until you could pay off your debt. By listing all your repayments due for the month, arranging them in the order of highest to lowest interest rate and deciding on the minimum constant repayment you could provide to all your debts, then you could gradually reduce your bills.

2.    Lower Your Interest Rates

Negotiate your credit card interest rates with your lender or creditor. You could actually save hundreds just by negotiating your interest rate with your lender. When negotiating, make it a point to point out that you couldn’t go paying the high credit card rates and that you are considering other options aside from the credit card. Once the bank or lender reviews your history and finds you qualify for a lower interest rate, you are in good hands. However, the results of this alternative cannot be guaranteed completely.

3.     Credit Card Relief Programs

Not only you suffer from credit card or loan debts as many people are also having trouble making repayments. In this case, you could actually get financial assistance from credit card relief programs. Review your household, education and miscellaneous expenses (which you will need to note down), lenders may consider helping you by putting you in their credit relief programs. Most lenders have a financial hardship department.