A debt counseling agent discussing options with a client

Debt mismanagement can be detrimental to the total amount you owe, leading to late payments and even legal actions. With over 70% of the American population struggling with some form of debt, it’s becoming harder for individuals to buy a home, pay for healthcare, or reach financial independence.

Developing a strategy to control your loans better is paramount for long-term financial stability. Here are two main ways you can pay off your debt.

1. Debt Validation

You can avoid getting into legal trouble by settling your debts through a monthly payment. Whether it’s medical or credit card debt, almost any type of unsecured debt can be disputed and invalidated through debt validation services.

After you’ve been behind on your payments for a long time, a collection agency will take control of your account. Due to the nature of the debt, many credit card companies will show a loss on their balance sheets.

When a dispute has been raised, the consumer receives a notice from the collection agency stating how it’ll stop taking on the debt. The letter explains how it’ll prove that the debt is invalid. Due to the account’s status, the consumer’s credit report can’t be updated by the collection agency. This can help consumers get their accounts taken off of their credit.

A debt counseling agent discussing options with a client

2. Debt Consolidation

If you have multiple loans, you can benefit from consolidating them all. Doing so will lower your monthly payment and extend the duration of your loan. It’s not always ideal to consolidate your debts, but it’s also likely to lower your interest payments.

Before you consolidate, make sure that you compare the terms of the different loan programs. Doing so will help you avoid losing the flexibility to lower your monthly payment.

As with any debt-payment strategy, it’s always best to pay off the highest interest rate first. After paying off the loan, apply the total monthly payment to the remaining balance on loan and the interest rate. This method is known as a debt avalanche.

For instance, let’s suppose that you have a total of $300 in credit card loans. You could consolidate all of them into one loan and pay off the balance each month.

Take the $150 left after paying off the 6% and add it to the $100 used to pay the 5% interest. After paying off the 6%, the remaining balance will be paid at a rate of 4%.

Another common strategy involves paying more than the minimum whenever you can. Doing so helps lower your monthly payment and, in turn, lowers the interest rate.

Ready to Take the Next Step Toward Your Financial Independence?

By following these steps diligently, you can effectively manage your debt and pay off your dues without fear and stress. Legal advice is the cornerstone towards your financial independence and can help you get through the difficult process of paying your debts.

If you’re looking for a vast array of solutions for your student debts worries, American Debt Enders hosts a panel of certified experts that can get your debts back into check. We provide diversified solutions and legal consultations to help you get back on track and give you options besides bankruptcy.

Whether you’re looking for a debt dispute consultant or debt resolution services, you can count on us to provide you with expertly crafted solutions. For an in-depth discussion on all your options, call us today at +1-877-766-2465 to discuss your options.