Getting ahead financially takes a lot of time, patience, and well-researched knowledge. There are dozens of types of credit available out there, which can make determining how to manage them a little confusing at times. If, however, you are specifically looking to choose between personal loans or credit cards and want to understand how difficult each will be to pay back, then things are about to get a little easier. In fact, if you ever have to undergo the process of credit card and personal loan debt settlement, you’ll find it’s similar for both. Here are the details you should consider before opening your next line of credit or signing that loan agreement.
Consider the Fine Print
To know how easy or difficult it will be to settle credit card debt and personal loans, it is always good to start with the financial fine print. Personal loans usually have a much smaller interest rate than credit cards because you are agreeing to borrow for a certain amount of time, whereas credit cards are a somewhat indefinite relationship. When it comes to debt settlement, you really want to minimize the accounts you choose to negotiate. If you could settle on your credit card, which will likely have a higher interest rate, and can find a way to pay off the personal loan, it would be ideal for your current and future financial situations.
When it comes to certain types of personal loans, settling may even be a difficult option. When you originally agreed upon the loan, you should have seen if the borrowed funds were part of a secured or unsecured deal. Essentially, if you had to offer up some kind of collateral upon signing the loan, it will be a secured deal. Unsecured personal loans are often simpler to negotiate for settlement, but unfortunately, secured loans may not be eligible because you offered up collateral that the lender is able to take if you can no longer make payments due to a financial hardship.
Find Out How Much You Owe
The smoothness of the credit card debt or personal loan settlement process also stems from how much you actually owe. The larger the sum of money and its corresponding interest rate that you owe a lender, the more you are going to have to pay within the settlement. Credit cards will often be a little easier to negotiate because, when you received the card, you did not agree to a specific amount of money you would spend throughout the time you owned the card. Credit card lenders usually know that their high interest rates and fees can be burdensome and, with the help of a debt consultant, you can usually convince the lender to lower or even eliminate those fees, along with some of the debt.
Although personal loans are easy to manage because they are a lump sum in your bank account that you do not have to worry about maxing out, they may be a bit more difficult to negotiate. When you sign up for a loan, you specifically agree to pay back the specified amount within a set number of months. Loan companies will use that agreement to their advantage. You may be able to reduce the interest rates or cut off a couple of months of payments from an unsecured loan, but you will likely still have to pay a bulk of the amount borrowed.
Talk to Trusted Experts Today
Understanding personal loan settlements and how to settle credit card debt can seem confusing, but it does not have to be. There are so many different credit card companies and loan lenders out there, each with their own policies, fees, and processes for dealing with outstanding debt. The best way to figure out how to handle your personal loan and credit card debt and deciding if you should settle them is by working with an experienced debt consultant. Liberty Debt Relief always has staff on hand to help guide you to the right decision that will leave your finances better than ever. Contact us today to find out how you can go about settling your personal loan and credit card debt.
