If you fall behind on unsecured debt payments, your lender does not have collateral to take back; instead, they can tack on late fees, increase your interest rate, and eventually send your unpaid balances to a debt collector. Credit cards, for example, are notorious for high interest rates. As you let your unsecured debt go unpaid, your interest charges and fees will start to add up, increasing your debt.
Secured debts, on the other hand, are debts tied to specific assets like your car or home. If you fall behind on secured debt payments, like your car loan or your mortgage, your lender can take possession of your car or house.
Unsecured Credit Debt and Your Options
As long as you pay back what you owe on time, you likely won’t run into issues with unsecured debt. Once you fall behind on payments, however, it can quickly grow to be a big problem. Fortunately, there are options for handling overwhelming debt and getting your finances back on track.
Debt consolidation is a popular management strategy that involves combining your unsecured debts into one monthly payment. This eliminates the need to keep track of multiple payment amounts, due dates, and creditors.
There are two main ways to consolidate unsecured debt:
Consolidation Loans: These personal loans can be used to pay off your existing debt. After you use the consolidation loan funds to pay off multiple debts, you will be left with the new, single loan to pay off over time. Although this strategy can help you reorganize your financial obligations, consolidation loans don’t always reduce what you ultimately owe.
Debt Consolidation Services: A trusted debt consolidation company can work with you to consolidate your unsecured debts. After reviewing your financial situation, the company will help to consolidate monthly payments into one single lower payment, and then work on your behalf to reduce your debts.
Benefits of Debt Consolidation
The biggest benefit of pursuing debt help is the reduced stress that comes with simplifying payments.
Do You Need Help With Your Debt?
Before you decide to work with a debt consolidation company, you should make sure it’s the right choice for you. Consolidating debt may be a good idea if you answer “yes” to any of these statements:
I don’t think I can realistically pay off my unsecured debt.
The stress of my debt is causing me physical or mental pain.
I’m ready to commit to paying off my debt over the next few years.
Accredited Debt Relief - Your Unsecured Debt Solution
The debt consolidation professionals at Accredited Debt Relief can help you find the debt solution that’s right for you. With an A+ rating by the BBB, we’re committed to helping people just like you find solutions to their debt. Accredited Debt Relief can help you pay off your debt quicker, so you can finally take your first step toward financial freedom. Get a free consultation today!
