Debt and accumulating interest can be a nightmare for individuals who are struggling to be debt-free and struggle with their finances. If debt isn’t dealt with a hands-on approach, individuals may find themselves burdened with debt for the rest of their life. Debt takes away any financial freedom that individuals may have, and may suck them into a neverending vortex of debt repayment and financial struggle. The way to manage one’s debt successfully and ensure repayment is through a debt management plan. Listed below are six reasons why you need a debt management plan:
1. Being on a debt management plan can reduce your interest fees
Individuals who make payments on a debt management plan find that their payments are typically lower than those of individuals who aren’t on a debt management plan. Most creditors also readily reduce rates on interest if the payees are on a payment plan. In order to reduce the amount of money you owe and in order to get out of a vicious cycle of debt, individuals should consider enrolling in a debt management plan.
2. Being on a debt management plan simplifies repayment
Individuals who are on a debt management plan simplifies repayment as individuals get a systemized schedule for all their due payments. This is especially helpful for individuals who are struggling with multiple loans and cannot really figure out how to categorize or schedule payments. A debt management plan simplifies payments for individuals by letting them know the amount due and the date on which that particular amount is to be paid.
3. Being on a debt management plan provides you with support
Paying off your debt on your own and navigating all the complexities involved with juggling multiple payments and schedules can be very overwhelming for most. By enrolling in a debt management plan, individuals can ensure that they have a supportive team of employees and representatives with them at all times. Individuals can consult these representatives and get help whenever they are in any trouble or get into any issue with their creditors.
4. Being on a debt management plan allows you to be debt free
If individuals are hoping to be free from debt within 5 years or less should seriously consider enrolling in a debt management plan. The representatives of the service they choose take into account the individual’s preferences and paying capabilities while designing a payment plan for them, and hope to achieve completion in the plan within a span of 5 years or less.
5. Being on a debt management plan helps improve your credit score
Having a lot of debt for a number of years can affect your credit score and history tremendously. This in turn affects the individual’s capability to get a loan in the future, and if they do get loans, banks are likely to charge them high premiums that they probably cannot afford to pay. Your debt management plan company can also track your progress to compare your credit score over a period of time to see whether the plan has affected your credit score positively or not.
6. Being on a debt management plan gets you help from experts
Your credit counselling company is likely to get you help from an expert before you get enrolled in a debt management plan. This expert or analyst can help you budget your overall data, debt and all available payment options. Once this basic homework is completed, your analyst will be able to work out a debt management plan for you. All of this isn’t really possible for an individual to complete on their own, and hence getting help from professionals is imperative and only possible if they enrol in a debt management plan themselves.
For individuals who are stuck in a pile of debt, getting enrolled in a debt management plan is beneficial for them for multiple reasons. Having creditors chase you all the time can get very stressful, and can hinder your professional and personal life. Hence, individuals should enroll in a debt management plan to get some clarity on how they will be paying back their debt and in just how much time they will be debt free. Having debt can truly bring down people’s motivations and getting free from debt can prove to be very motivating and many individuals may even feel that they have been liberated.