Posts

How to Calculate Your Debt Payoff Amount and Get That Amount Lowered

Whether it is in the form of a large personal loan you took out to help pay for something that just couldn’t wait until you saved up, student loans that helped you graduate on time, or even just a single credit card you use to get gas and hotel rewards, debt is a way of life for many of us. While having debt hanging over your head can be extremely stressful, however, it does not have to push you over the edge. All it takes is a little bit of planning and knowing your payoff amount to better manage your finances.

infographic for calculating and lowering your debt payoff amount

Know the State of What You Owe

Our experts at Liberty Debt Relief recommend that you calculate your payoff amounts on every outstanding form of debt that you have every few months. If you look at your credit card or loan information online, you will often see a section that shows how much your balance is, but that number does not take your interest, credit terms and conditions, or any fees into consideration. Unlike simply looking at your monthly payment or the overall outstanding balance, knowing how to calculate your payoff amount will ensure that you’ve accounted for all of the fees

To calculate, all you need to know is the total amount you owe, the interest rate, the amount of time it will take you to get out of this particular debt, and if there are any fees associated with paying off your debt early or anything similar. Luckily, there are plenty of online calculators available to run the specific numbers for you.

Now, for example, let’s say you want to pay off your $1,000 debt over the next 12 months and this particular account only has a five percent interest rate. That means that, assuming your balance were to stay at $1,000 every month, you would be accumulating $50 in interest each month as well. However, because you are working to pay the debt off, your interest charges every month will go down as long as your amount owed goes down. So, to pay off this $1,000 debt in 12 months, you would need to make payments of $86 every month. You could choose to put more towards this debt to pay it off quicker. If you were to pay about $100 a month instead, for example, you could likely pay off the debt in only 10 months.

Lowering Your Debt

Lowering your payoff amount can be difficult depending on your situation. The first thing all debt settlement services ask new clients is if they can make higher payments. As seen in the example, higher monthly payments mean less outstanding balance and less damage your interest rate can cause. There are a few other methods for lowering that amount, as well.

You could try speaking to your lender about your situation. If you have been a good borrower and have always been on time with your payments and made them in full, then they might be willing to work with you a bit. Every so often you can convince your lender to lower the interest rate on your account so you accrue less debt every month, which can make a significant impact. If the previous example had a 15 percent interest rate instead of 5 percent, for instance, that is an interest charge of $100 more on your account every month. That can bring about more than $1,000 interest a year if you are not careful.

Debt Settlement Consultants Will Negotiate Lower Terms

Of course, for many people, their payments are already too high for their circumstances and what they really need is another solution altogether. With a debt settlement program, a debt relief consultant will teach you how to calculate your payoff amount with terms that actually work for you. Instead of simply changing the life of the loan or increasing your payments, they will work with you and your lenders to try and establish a new outstanding balance that is lower than the current amount and possibly even reduce the interest rate.

By having a more manageable payoff and a lower interest rate, your timeline to get out of debt will be cut dramatically, and even if your payment amounts stay the time, they will have a much higher impact. The best part is that your debt consultant will handle all of the negotiating for you — all you have to do is tell them what you can and can’t afford and they will essentially take care of the rest.

Seek Assistance from the Debt Relief Experts

If you are struggling to deal with your debt payoff amount, you do not have to tackle the problem alone. Liberty Debt Relief’s specialists have years of experience and invaluable knowledge to make sure you can not only pay off your debt but stay out of debt in the future. Whether you want to know how to calculate payoff amounts on your own, want to enroll in a debt settlement plan, or want any other kind of financial information, our team is here and happy to help. Make sure to call us today for a free consultation. We can’t wait to help you get on the road towards financial freedom!

/0 Comments/by

Financial Hardships that May Qualify You for Debt Settlement Help

The saying goes that when it rains, it pours, and when it comes to debt, that happens way too often. Millions of households are struggling to pay off their outstanding balances and are seeking unsecured debt relief. For those who have experienced a sudden loss of income, medical issues, or the loss of a spouse, there is financial hardship help available.

Loss of Income

These days, there are no guarantees. One of the most common reasons people need financial relief is because they lose their job unexpectedly. The company may have decided to downsize, completely close, or eliminate the employee or position for any number of reasons. When you suddenly lose your job and income, it doesn’t take long for all the bills to start racking up, which can cause a lot of stress and put you in serious trouble. But some lenders often understand that something like this is outside of your control and are willing to be flexible you while you look for other sources of income so you can get debt relief and focus on the bigger picture.

Sudden or Ongoing Medical Issues

It’s no secret that health care costs are on the rise. With the average hospital stay costing $10,000, it is no wonder people go into debt. While hospitals and health care facilities are limited in what financial hardship help they can provide, your lender will be more understanding, especially if the issue is sudden or ongoing. As long as you show them that you are doing everything you can to pay off your medical bills and regain your financial footing, they will want to help. At the end of the day, they just want to get paid too and want to work with you to make it happen.

Loss or Separation of a Spouse

When families separate, the effects can last a lifetime. Whether a married couple divorces or a spouse suddenly passes away, the mental, emotional, and financial toll can be devastating. Financially, this means that there is now likely only one breadwinner of the home, which can make paying bills or even knowing what all the bills are significantly more difficult. For those who have children, this can be exponentially more taxing. Lenders will almost always provide financial hardship help in a situation like this. While you won’t be able to have your bills dismissed altogether, they will likely be able to help with any interest, due dates, and grace periods.

Get Help When You Need It Most

Liberty Debt Relief always makes our clients our number one priority. If you are experiencing any of these financial hardships or another situation that you hope will qualify you for debt settlement help, call us today. We are happy to provide a free debt relief consultation and work with you to make sure that you get over this personal and financial hurdle in the best and most effective way possible.

/0 Comments/by

Getting Debt Help from a Debt Consultant vs Debt Specialist vs Credit Counselor

Debt can cast a shadow over an individual’s life. Regardless of how they incurred the debt, the inability to settle it in a timely fashion can do more than harm the person’s credit score. It can also cause a pervasive sense of stress, especially if debt collectors are calling and sending a flurry of emails.

When you experience this situation, and you currently lack the means to end your indebtedness, what should you do?

To put your financial life back on course, you could pursue debt help from a debt consultant or a debt specialist, or you could seek the assistance of a credit counselor. However, while each option can help restore a healthy state of finance, they do so in different ways. Depending on your unique situation, one option may be a better fit than the rest. With that in mind, let’s look at the difference between these three professionals.

Three Types of Debt Help

1. Debt Consultants

Debt consultants are financial professionals who specialize in advising people on how to achieve debt relief. Moreover, they help you develop a viable plan for paying off debt by managing your finances more effectively. In order to provide this type of debt help, a debt consultant performs a complete analysis of your current financial situation before potentially negotiating debt with your lenders.

Although debt consultants can work with creditors to reduce the amount of debt you owe, they may also help you address debt by suggesting other means, such as debt consolidation via their affiliates.

Debt Negotiations

There are multiple steps to the debt settlement process, and a debt consultant can help guide you through each of these. First, you’ll demonstrate your financial hardship and the reason you need to negotiate your debt. Next, your consultant will review your finances and credit report with you to determine what portion of your debt you’ll be able to handal, which is typically expressed in a range. Next, the consultant will speak to your lenders on your behalf and, potentially, get them to agree to the smaller amount due. If your creditors agree, you will begin the process of repayment but for a much more manageable amount.

Debt Consolidation Planning

In a debt consolidation plan, you can roll multiple debts into one, allowing you to make a single, scheduled payment on the amount until it is paid in full. Because the consolidated debt may have a lower interest rate than the debts that comprise it, you can eliminate your debt faster. However, because the amount of the payment depends on the dollar amount of the debts consolidated, debt consolidation planning works best for debts that aren’t excessive.

Most people receive debt help through debt consolidation in one of two ways. They transfer debt to a balance-transfer credit card that has 0% interest during the card’s promotional period, then pay off the debt before the promotional period ends; or they receive a fixed-rate debt consolidation loan, use it to pay off their debt, then pay off the loan in installments.

2. Debt Specialists

Professional consumer debt specialists retain the title of “Certified Consumer Debt Specialist (CCDS)”, which they receive upon passing the CCDS exam from the Center for Financial Certifications. To retain the certification, specialists must complete 20 hours of continuing education every two years, dealing with a variety of personal finance disciplines, including: budgeting, debt load evaluation, avoidance and elimination of debt, and retirement planning.

Like debt consultants, one of the primary goals for debt specialists is to achieve a debt settlement agreement. In some cases, the payment could be 50% less than what you originally owed! Their expertise and ongoing relationships with creditors is why you should work with a debt specialist or debt consultant, instead of trying to complete these negotiations on your own.

3. Credit Counselors

A credit counselor is a third financial professional who assists people with getting their lives on track in the face of significant debt. Credit counseling organizations are usually non-profit entities that offer free or low-cost debt help services to their clients. In doing so,

counselors largely advise people on managing their money and debts, and help them budget payments.

Debt Management Planning

Debt management differs from debt consolidation in that it doesn’t involve loans that aid debt repayment. Instead, a debtor’s creditors collectively agree to repayment terms that the plan establishes. The debtor then makes scheduled payments to the credit counseling company that facilitated the debt help plan, and they disburse separate payments to each of your creditors.

In most cases, the plan doesn’t reduce the amount of debt owed. Rather, the monthly payment on a debt and/or interest rates are lowered to make it easier for those in debt to repay. When creditors agree to the plan, they also agree to halt debt collection efforts and not charge late fees, as they receive payments. Unlike some debt help agreements that are formed with creditors, agreements achieved with the help of credit counselor typically don’t have tax implications.

Conclusion

Debt consultants, debt specialists, and credit counselors use different methods to help people address debt, and eventually regain a good financial standing by doing so. Is one of these groups of financial professionals better equipped to help you?

The answer depends on certain factors, such as whether you have a high level of debt that is ideal to settle with a negotiated lump sum, or a lower level of debt that’s feasible to pay off in installments. At the same time, it’s important to look at which financial professional offers the most options, and the most holistic approach, on behalf of clients. That designation typically belongs to debt consultants.

Contact Liberty Debt Relief

If you need debt help with resolving personal debt, and you wish to pursue a new agreement with your creditors, don’t negotiate without a debt consultant on your side. Whether your debt is significant, relatively minor, or somewhere in-between, our experts atLiberty Debt Relief can provide the services you need for a new financial start. Contact us today to schedule a consultation for your debt situation. We look forward to helping you live outside of the shadow of debt.

/0 Comments/by