Americans as a whole have $830 billion in credit card debt, and the average American has a credit card balance of $6,200. Although these debts aren’t tied to essential assets, they typically have higher interest rates that can add up overtime. Learn more about unsecured debt and how to best pay it off.
Unsecured debt is money you owe to a creditor that isn’t guaranteed or secured by an asset. Examples of unsecured debt include the following:
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.
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:
The biggest benefit of consolidating unsecured debt is the reduced stress that comes with simplifying payments. Less pressure and stress can also help you feel more motivation to pay off debt and get back on track financially.
Before you consolidate debt with the help of a debt relief 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:
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!
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* The company is an affiliate of Beyond Finance, Inc. Beyond Finance, Inc., is a servicing provider for most debt consolidation services offered by the company. Beyond Finance's clients who make all monthly program payments pay approximately 68%-75% of enrolled debt (including fees) upon successful program completion. Programs range from 12-48 months. On average, Clients receive their first settlement within 4-6 months of enrollment. Not all Clients complete the program. Estimates are based on prior results and may not match your results. We cannot guarantee that your debts will be resolved for a specific amount or percentage or within a specific timeframe. We do not assume your debts, make monthly payments to creditors or provide tax, bankruptcy, accounting, legal advice or credit repair services. Program is not available in all states; fees may vary by state. The use of these services will likely adversely affect your credit. You may be subject to collections or lawsuits by creditors or collectors. Your outstanding debt may increase from the accrual of fees and interest. Read and understand all program materials prior to enrolling. Additional information for Maryland residents, click here.
Certain types of debts are not eligible for enrollment. Some creditors are not eligible for enrollment because they do not negotiate with debt consolidation companies.
The company and its affiliates are not lenders, creditors, or debt collectors. This is not a loan. Referral arrangements with our partners make it possible for you to apply for a loan. Annual Percentage Rates provided by partners range from 5.99% to 35.99%.
Testimonials reflect the individuals' opinion and may not be illustrative of all individual experiences the company or its affiliates.