Paying off credit card debt can be an exercise in frustration. You make payments month after month, but your balances never seem to go down. That’s because high-interest rates take a big chunk out of every monthly payment you make. But there’s a solution that can cut those rates significantly, and you can use it even if you have bad credit.
A debt management program is a customized repayment plan that helps you pay off credit cards and other unsecured debts. It works by reducing or eliminating the interest rates applied to your balances. That way, you can focus on paying the debt you owe, making it much faster and easier.
For Scot, the program was a lifesaver. He went from contemplating bankruptcy to looking forward to being debt-free in the next two years.
“The reduced interest rates make everything much easier,” Scot says. “My rates are down to about 2% each now and I’ll be done in about two years.”
Debt management succeeds where other consolidation strategies fail
Scot had tried consolidating his credit card debt on his own with a personal loan. A debt consolidation loan allows you to pay off. However, since he only had a fair credit score when he applied, the interest rate was high.
The meant he had a high monthly loan payment that left him with little money to save for emergencies and unexpected expenses. As a result, he ran up new credit card balances. Now he had a loan and four credit card balances to juggle. And instead of working to pay off $10,000, now he was trying to pay off over $25,000.
“The payments were incredibly high,” Scot recalls. “I was feeling disheartened and stuck—like I would never be able to get out of the debt I was in.”
Fed up with his lack of progress, Scot decided it was time to find a solution. After some research, he learned about nonprofit credit counseling and debt management programs.
“If people are looking for a legitimate way to pay off credit cards and loans, this is it!” Scot says. “I would very much recommend this program.”
This debt solution gets results, regardless of your credit score or how much you owe
A debt management program can help consumers serious save time and money as they get out of debt. Here is how it breaks down:
Starting debt: $25,781
| Before | After | |
|---|---|---|
| Monthly Payment | $1,031 | $494 |
| Time to payoff | 15 years, 3 months | 4 years, 10 months |
| Total interest charges | $15,215 | $2,828 |
In this case, the credit counseling team was able to work with the creditors to reduce the interest rate to an average of just 5%. Reducing the monthly payments by 52% offered immediate relief. And freedom from debt happened more than a decade sooner.
What’s more, these results are not unique! Debt management programs are shown to reduce people’s total credit card payments by 30-50%. The programs last 36 to 60 payments on average, meaning you can be out of debt in just three to five years.
How does it work?
Debt management programs are provided by nonprofit credit counseling agencies. These services exist to help consumers get out of debt as quickly and affordably as possible.
Here’s how it works:
- You start with a free debt and budget evaluation with a certified credit counselor.
- The counselor will assess your situation and let you know how much you can expect to pay on a debt management program.
- They’ll also explain other solutions for getting out of debt, so you can weigh your options.
- Once you decide to enroll, the counseling team contacts your creditors to reduce or eliminate the interest rate applied to your balance and stop penalties and fees.
- You make one monthly payment to the credit counseling agency, then they distribute the payment amongst your creditors each month as agreed.
The benefits are big and offer advantages over other solutions
- You can qualify for the program even if you have bad credit or too much debt to qualify for a consolidation loan
- Your interest rates will be reduced to 0-11%, which is better than most personal loans
- Creditors will also stop penalties and fees
- If you have accounts that are behind, most creditors will agree to bring those past-due accounts current after three payments
- You avoid negative credit report penalties that come with other solutions, like debt settlement or bankruptcy
- You can be debt-free in 36-60 months
If you’ve been working to get out of debt on your own, but can’t seem to get ahead, this program may be what you need. And there’s a company that can connect you with an accredited, top-rated nonprofit credit counseling service. Call Debt.com today at 800-849-DEBT (3328) to discover if a debt management plan is right for you.
