Once we owe a lot of money, we often lose our peace of brain and sleep, as we are constantly concerned with paying back the money that we have borrowed. The moment the borrowed amount is small and it is borrowed from friends or family, we have the ability of paying them again at our personal discretion, but when the money has been borrowed from banks like banks, we do not have good thing about paying back at our convenience.
When we borrow money from the banks in the form of lending options and credit cards, we need to pay the money back in a given time frame and if we don’t our debts amount increases. Thus, people always try to find ways through which they can get relief from debt. There are whole lot of misconceptions and misguided beliefs associated with debt pain relief. Want try to destroy 3 of the common myths about debt negotiation.
Fable no 1 – Simply home owners can get a consolidation loan
A large number of people assume that in order to are eligible for consolidation lending options, they need to be homeowners or else they will not qualify for these loans. However, this is not true since almost all of the lenders offer loans for consolidation of debt and since these loans are unsecured the people do not need to pledge their home or any type of other financial asset as collateral. These institutes can help you in clearing your financial obligations, although you may do not own a house, as long as you meet the rest of the standards to be eligible for these loans. One such standards is that the entire debts amount should not be lower than $10, 000.
Fable no 2 – Personal debt settlement will not reduce interest rates
This is another widespread believe, which is not true. People feel that debt settlements will not help them in decreasing the total debt amount, but actually will only provide them with a certain amount of alleviation in the interest levels billed. However, the fact is that such settlement negotiating can actually assist people in not only lowering interest levels but also in reducing the total debts amount. Also, such services will provide the people with an possibility to make single payments every month, rather than multiple obligations to different lenders, like credit card companies, home loan companies and so out
Myth no 3 – The impact on the credit ranking is there to stay (permanent)
Individuals have a misconception that once their credit rating has recently been damaged due to bad debt, there is practically nothing they can do to improve it. This is the reason why many people do not even call and make an attempt to avoid personal bankruptcy as they feel that staying away from will probably be of no help. Yet , the truth is that through consolidation of debt people should not only get debt relief, nevertheless they can also improve their credit scoring in the long run. The impact is not everlasting and any impact caused by the settlement agreements will also get corrected once people try to make obligations and pay off their debts.
These are few of the common misguided beliefs related to getting alleviation from debt. People should try their best to avoid bankruptcy and clear all their debts in order to achieve complete financial independence.