Debts in excess or if not managed properly can make anyone’s life thorny. This may be more troublesome to single moms, which can be very challenging to manage and make both ends meet. Many single moms face issues at a larger scale when compared to an average borrower. Along with their work schedules and home responsibilities related to their kids, they have to be up and active about their finances too to fight debts.
However, on looking at many women who effectively manage it, one should give a big salute to them by seeing the way how they cope up with such problems and live a successful life. In case of single moms who face enormous monthly repayments of their small and big loans, consolidation can be a good alternative than an option for bankruptcy.
There are many professional lenders offering debt consolidation products. Many of the government agencies also offer special facilities for single moms to get off their debts and get back to a stable financial condition. In this article, we will discuss some easy ways through which moms may try to get rid of their troublesome debt situation.
While planning for consolidation of multiple debts, the first thing which comes across many one’s minds is to get a new personal loan. They hope it will help them to pay off all their existing small debts and make them less liable. The major advantages of taking a personal loan are that one can lower the interest rate and monthly installments.
For single moms, personal loan to consolidate the other existing loans seems to be a good option. They may also get a better rate of interest with it. Also, provided the financial condition of single moms, getting a personal loan is also easier. In fact, the real issue in applying for a personal loan is to find an appropriate lender to process the personal loan as it depends on the creditworthiness of the borrower. If the credit history is bad, then getting a personal loan may be extremely tough.
Credit card debt consolidation
Similar to taking a personal loan, credit card consolidation also is a good option to consider for single moms with multiple debts. They can think of combining debts by paying off the existing ones with a credit card of lower interest. In fact, some credit card consolidation processes come with some specific regulations which may be problematic for single moms.
One such issue is to be mindful about the special terms and conditions applicable to bank credit card consolidation. Apart from such rules, it is also important to ensure that there are no additional charges involved when planning to go for consolidating your debts through credit card. Otherwise, the overall cost of the debt will be larger when compared to actual state once consolidating through credit card.
Assistance from relief firms or settlement agencies
There are many government and NGO initiatives to support single moms. So, another easier way for single moms to get rid of debts is to deal with any of such agencies and try to consolidate their loans with affiliated creditors by looking at various debt consolidation reviews.
There is a special debt management program aiming at single mothers to pay off their outstanding debts and then get a new loan with a lower interest rate. The major advantage of working with debt relief firms is that with it you don’t have to worry about your credit rating. Just ensure that the firm you deal with is accredited and has the credentials which make them more reputed and trustworthy.
Quick tips for single moms to get rid of debts
Get it realized – You have first to collect the statements of all your debts including:
- Credit cards
- Medical bills
- Student loans
- Car note
- Home equity line
- Personal loans etc.
Lay all of them out on a paper and do a proper calculate the actual cost involved. Create a list of all your debts including the interest rate of each, monthly payments, and the term of each debt.
- Create a budget – Once if the groundwork is over and understanding your actual debt scenario, figure your current financial status and how much your monthly budget can afford to pay out for debts. You also need to take serious budgetary decisions as to cut off extra spending and lower the overheads.
- Research on rates – Based on your credit score and availability of consolidation loans, you may compare various options in terms of interest rates and identify who offers you the best possible consolidation loan. At the first point, consider if you can qualify for a 0% balance transfer option. This is a good option to pay off your debts altogether and save a considerable amount in terms of interest. However, this only works if you have a very organized approach to consolidation. Remember to read all the fine prints and ensure that you pay your premium on time to enjoy the benefits in full.
- Work on individual loans to reduce the loan through negotiation – This is another try to be given before paying off the outstanding debts. Say, for example; you can negotiate with your credit card company and ask for a better rate if you are planning to pay it off in full. You may also check out on the outstanding medical bills if the amount is negotiated. There are also options for student loan consolidation for better rates through online agencies.
If you find it overwhelming to deal with the consolidation process or you think it is out of your reach to dig out the debts and manage it all by your own, get professional assistance. A credit counselor is a right person to approach in order to help you with debt assessment, consolidation, and devising a proper repayment plan. Consolidation agencies also take the initiative to do credit counseling in order to make you knowledgeable and diligent about further financial management. You may consider authentic credit counselors through the National Foundation for Credit Counseling or one from Association of Independent Consumer Credit Counseling Agencies etc.