When debt becomes overwhelming your peace of mind is gone, and you can spend nights losing sleep about how you’re going to pay all that money back. If you borrow a small amount of money from family or friends, you can pay it back easily and at your pace. Financial institutions want their payments in full and on time no matter what your current situation happens to be.
Borrowing money from a bank either through a loan or credit card, you will need to pay that money back in a given period and if you fail to meet your obligations the amount of money you owe increases. This is one of the reasons people are constantly seeking relief from debt. However, there are some pretty big misconceptions that surround debt relief. Here are the most common myths surrounding debt consolidation.
- Only Homeowners Get Consolidation Loans
There is the common misconception that to secure a consolidation loan that you need to be a homeowner first to qualify. This isn’t the case; many lenders will offer debt consolidation loans to applicants that don’t need to offer up a home or any other asset as collateral. They will help you clear up your debts despite not owning a home as long as you meet the eligibility requirements. A common requirement is that your debt does not exceed $10,000.
- Your Interest Rate Doesn’t Change with Debt Settlement
This is another myth that simply isn’t true. A good debt settlement company will help you in not only lowering the interest rates that you currently pay, but they can negotiate settlements that will lower your total amount of debt too. An added benefit is that instead of making multiple payments every month you will now only have the one to worry about.
- Your Credit Rating is Ruined for Good
People often believe that once they have bad debt on their credit report, it will be there to haunt you forever. This isn’t the case, taking control of your debt and getting some relief will only help you in the long run. Yes, there will be some impact to your credit rating when you have bad debt but settlement agreements will get corrected once you make payments and pay down this debt.
These are just some of the most shared and pervasive myths that relate to working with a debt consolidation organization. Avoiding bankruptcy and achieving financial independence can only help you in the long run.