| Consumer Credit Counseling |
- They are really working for, and paid by, the creditors
- Because of this relationship with the creditors they frequently are able to reduce your interest rate
- You pay back 100% of your debt, including interest and their fees
- There is little to no reduction in your monthly payments
- You’ll probably spend about 3x more money to pay off your debts compared to our program
- Your credit rating is significantly impaired while you are in the program
- Takes approximately 5-10 years to complete.
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With $30,000 in debt, a typical consolidation loan at 12% would cost you about $40,000 over 5 years,
with $10,000 being interest (assuming that no more debt is accumulated).
| Minimum Payments |
- Depending on your debt amount, it could take decades to be debt free, paying tens of thousands of dollars in interest payments
- Must be disciplined to achieve, and not add additional debt
- Failure to make additional payments coupled with increased balances (due to high interest rates) propels most further into debt
- Any increase in interest rates will increase minimum payments - for many exceeding their ability to pay
- With only minimum payments, you are paying mostly interest charges; not paying down your debts
- Many go deeper into debt as they struggle to keep up.
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Why not slash your monthly payments, and be debt free in three years or less for about half of what you owe?
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With $30,000 in debt, a typical credit counseling program would cost you about $50,000 over 5 to 9
years, with $20,000 of that going to interest.
| Loan Consolidation |
- Easy to manage one lower monthly payment with somewhat lower interest rate
- Under current market conditions (as seen in the news), many banks have tightened their loan requirements making
it very difficult for people to qualify
- Debt is usually secured by collateral
- If refinancing your home or a HELOC, you may be repaying from 10-30 years, and potentially risking your home
- You’ll probably spend about 3x more money to pay off your debts compared to our program
- Within 2 years of consolidating, most people reload their credit debt to an equal or higher amount.
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With $30,000 in debt, making minimum payments with an average interest rate of 18% (low) would cost you
about $74,000 over 30+ years, with $44,000 of that going to interest.
| Bankruptcy |
- Protects some assets; under Chapter 7 start-over debt free but much more difficult to qualify since the bankruptcy reform of October 2005
- In 2007, 30% of Bankruptcy filers were in Chapter 13 – in which you partially or fully repay your debts over 3-5 years (source: American Bankruptcy Institute)
- Significant damage to credit as bankruptcy stays on credit report up to 10 years, resulting in higher interest rates for almost everything
- You should seek legal counsel if you are considering bankruptcy.
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