http://www.how-to-consolidate-debt.com/debt-management/debt-management-programs/ Debt management programs come in different forms, but all debt management programs have the same goal: To get you out of debt in five years or less! en-us Sat, 26 Jul 2008 15:00:00 EDT Sat, 26 Jul 2008 15:00:00 EDT Weblog Editor 2.0 What can you say about debt management programs? That they can have you out of debt in five years? That they can reduce your monthly credit payments? That they can teach you how to stay out of debt? That there are at least five different kinds? All true...read on to learn more about which debt management program is right for you. (Chances are there's at least one or more.) Debt Management Programs 101 We don't need to explain the various ways that people get into debt. Debt happens. That's just a fact for most people. But when it gets out of control, you need to regain control with help from one of the many debt management programs available today. For example, if you have a lot of student loan debt, student loan debt consolidation may be all you need. This gets you a lower interest rate, but it extends your repayment period. Still, it makes your finances much more manageable, and it's an excellent option for someone with a lot of student loan debt. If you have access to a lot of cash and want to pay off your debts in less than five years, debt settlement might be the bestdebt management plan for you. Under this plan, you contact a debt settlement company to negotiate with your creditors, and they try to get the amount you owe knocked down to the amount of money you have access to. Sometimes they can get it lowered by 60-80%! Some debt settlement plans require you to pay your new, lower balances off right away, but some give you anywhere from 1-3 years. It depends on how much you owe, how much you have access to and how much your creditors are willing to write off. Bear in mind, you probably won't be able to get credit with these companies ever again. But hopefully you'll get credit counseling so you won't need credit with them again! Just a thought. If you have some form of collateral, a debt consolidation loan may be the way for you to go. If you have a car paid for that's worth...say, $8,000, and you owe $8,000 in credit card and other unsecured debt, then you could get a debt consolidation loan for $8,000 and pay off your debts. Then you just have one monthly loan payment that's at a much lower interest rate than what you were paying on your other debts (especially if it's credit card debt). If you pay your bills on time, this should be a breeze for you. If not, you may want to consider another option because if you miss payments, you will lose your collateral to satisfy the loan amount. The repayment period is usually five years, which is great when you consider that it could take you 20-30 years to pay off your outstanding debts otherwise, and that's if you stop charging! If you're a homeowner, a debt consolidation mortgage is your best bet out of all of the debt management services, truly. This works by adding the amount of your unsecured debt to your mortgage. Although your monthly payment goes up a little, it's more affordable than your monthly debt payments, and you get the same low interest rate as your mortgage. Pretty cool, huh? Finally, there's a debt management program that's a one-size-fits-all plan, and that's debt consolidation. Debt consolidation relies on the negotiation skills of the debt management company to get your interest rates and monthly minimums lowered. Then they combine all your new, lower monthly payments, and you make one monthly payment to the debt management company instead of several monthly payments to your creditors. This, too, takes about five years to pay off. So of all the debt management programs listed above, which one is right for you? Are you ready to pay for some debt assistance, or do you think you can float those free debt management programs available online and elsewhere? It all depends on your situation and your goals. And speaking of goals, many debt management programs have a credit counseling feature that teaches you how to save, how to use credit wisely and techniques that will keep you out of debt forever--if you use them. A debt management service can only do so much. You have to be onboard too. Sat, 26 Jul 2008 15:00:00 EDT