Debt Relief Information: Good Credit Debt Relief Solutions

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IN THIS ARTICLE:
  • If you have the money, paying more than the minimum and accelerating debt pay off is best
  • Debt consolidation can be a good option if you have good credit

Boot Camp for Debt Part 2: Good Credit Debt Relief Options

Boot Camp for Debt Part 2: Good Credit Debt Relief Options

When it comes to handling current debt, IF YOUR CREDIT IS GOOD, here are a few basic options:

Debt consolidation. This can be done by getting an unsecured loan from a bank or by using the equity in your home (if you are a homeowner with equity). Using equity in a home can be a great solution for getting a hold on multiple payments and potentially lowering your overall monthly payments. Be careful of trading short term debt for long term, unless necessary; you probably don't need to turn a car payment into a 30-year obligation. Like always, shop aggressively for your loan. There is a wide range of lenders and the rates you will be quoted can vary widely. Don't borrow more than you need. Understand that your goals are not always in sync with the person trying to sell you a loan. For instance, they may want you to borrow more than you need. Read all the small print and know, before you sign up, what the penalty is for missing a payment on the loan. A prepared warrior always plans for a worst case scenario.

Debt Relief Boot Camp
Part 1: Basic Training
Part 2: Good Credit Debt Relief Solutions
Part 3: Bad Credit Debt Relief Solutions

Debt Acceleration. In this approach you target the highest interest debt you carry and work to pay it off first, paying minimums if necessary on all other bills. When the first debt is paid, you take all the money that went to paying it and apply it towards the next highest interest debt. When that one is paid off, you take all that you were paying towards it and then target the next highest debt. When you have removed the credit card debt, you can start accelerating the payment of on your car or even your mortgage, paying off the principal at greatly reduced long term interest cost.

Working with the Credit Card Companies- Be careful where you step, when trying to work with the Credit Card Companies. A good rule of thumb is that credit card companies make you pay approximately 4.0% of your debt amount on a monthly basis (or about $400 per month on $10,000 of debt), frequently these high monthly payments and high interest rates make it difficult for people to make their monthly payments. If they qualify, some people can use the 0% balance transfers to their advantage, but be wary. Make certain you are not late on a single payment, even by one day, or you can face penalty rates not just on the card on which you were late, but on all cards you carry. If you cannot pay down more than just the minimum payments, you may want to review your debt help options - or you might be paying on that same credit card debt in 15 or more years.

Continue on to Debt Relief Boot Camp Part 3 or back to Part 1 to learn about debt relief basics or bad credit debt relief solutions.

Debt Relief Boot Camp Part 1: Take No Step before you Prep

Debt Relief Boot Camp Part 3: Bad Credit Debt Relief Solutions

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