Typically, debt consolidation means working with a debt relief company or credit counselor to participate in a debt management plan. Your debt specialist will negotiate more favorable annual percentage rates and terms from your credit card companies. Additionally, it can refer to consolidating your debt through a secured loan. To understand which type meets your needs, chat with a qualified Tennessee debt consolidation specialist.
Debt Management in TN
Would you like to get out of debt in less time, with lower annual percentage rates and fees? If so, you might want to sign up for in a TN debt management plan.
These plans allow you to repay your credit card issuers completely through a single monthly payment. In this way they are a type of consolidation – probably the most popular type of debt consolidation in Tennessee. The benefits are huge: decreased interest rates, payments, and extra charges. Typically your creditor will begin offering these benefits after you make your payments on time for 90 days straight. On top of that, this is one of the most affordable ways to consolidate debt in Tennessee, just $25-40 each month.
TN Debt Consolidation Loans
If you have a favorable credit record, you might be able to use a debt consolidation loan to pay back your debt. The advantages of debt consolidation loans in Tennessee are the same as those of debt management programs, for example consolidated monthly payments, hardly any calls from debt collectors, and cheaper APR’s.
Unlike other Tennessee debt consolidation solutions, these kinds of loans don’t provide you with any of the money management training you’d get from a debt management plan. And, of course, they require you to take on another form of debt. In effect, you will be trading one form of debt (unsecured) for another form (secured). While this is a viable option for many residents of the Volunteer State, you must keep in mind that it requires a very good credit score, stable income, and enough collateral to secure the loan.
If you want to learn whether a debt consolidation loan a good idea, you need to speak with an expert.
Tennessee Debt Budgeting
Debt consolidation professionals in TN will want to know how much debt you’ve got that’s no secured, meaning it is not protected by some type of equity. The most common causes of credit debt on a monthly basis are:
- Credit Cards
- Rent/Mortgage Payments
- Other Credit Balances
Preferably, only 36% of your income will be invested in paying off debts. These debts include both secured and unsecured debts:
- Credit Cards
- Auto or College Loans
- Rent or Mortgage Payments
For example, let’s say you earn $3,257 per month, which is about average average for someone who lives in TN, then, ideally, you would spend roughly $1,205 per month. Sadly, plenty of Tennessee residents are in considerable debt, indicated by a debt to income ratio of more than 50%. They’re forking out more than $1,661 every month!
Just how many people need to get out of debt in TN? We have been able to conclude that 531,931 of Tennessee’s 6,346,105 residents need help with debt. That’s a lot!
An experienced credit counselor in can show you ways to manage your debt, address your current financial complications, and get rid of debt. Credit counseling is often provided by non-profit organizations, and it is often offered free of charge. The financial training you receive could be priceless. Moreover, many debt management plans are administered by credit counseling agencies.
An experienced debt negotiator should be able to negotiate your debts down to 40-80% of their original value. As opposed to debt management or consolidation, settlement involves a true reduction in the amount you owe. While this may sound ideal, it has the most severe, long-lasting impact on your credit rating. For that reason, it is seen as a last resort before contemplating bankruptcy. In Tennessee, the rate of bankruptcy is 0.73%, meaning there are 46,580 bankruptcies a year.