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Can an Online Personal Loan Help You Get Out of Debt?

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Americans carry a lot of debt – credit card debt, mortgage loan debt, student loan debt, automobile loan debt, personal loan debt, and other types of debt. In fact, Americans are deeper in debt than we’ve ever been before. And while debt has been increasing, earnings have lagged behind. This means that many individuals and families are spending much more money than they are making, often on necessities rather than luxury items.

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Families who have ongoing debts feel trapped under a heavy weight that they cannot get out from under. Many people may feel stuck in this destructive debt cycle.

Getting out of debt is neither quick nor easy; it is a process that can take years to complete. There are a number of solutions to help people who are in debt. From government assistance to readjusting your spending habits, there are ways to get out of debt. Below we look at some the available tools and methods to help you become debt free.

Government Assistance

Due to unforeseen circumstances, some people may find themselves struggling to afford basic necessities and pay their monthly bills. For individuals that qualify, there are government programs which may be able to help.

One such program is LIHEAP (Low Income Home Energy Assistance Program), a federal program that assists those who need help meeting their heating and cooling needs. There are also unemployment programs, food assistance programs, and other federal and state programs for eligible families and individuals.

Credit Cards with Lower Interest Rates

There are almost 160 million credit card holders in the US. The average credit card debt is $16,140 for each household that carries a balance month to month. If you have a large credit card debt, one way to reduce it is to apply for a credit card with a lower interest rate. Using this method, you can transfer your current balance to the new card which means you may pay less interest in the long run.

Negotiate Payment Plans

For some kinds of debt, such as medical bills, it may be possible to negotiate a monthly payment plan. Health care providers such as doctor’s offices and clinics will often allow patients to pay their bills in installments. This can be over the course of several months or even several years. Some hospitals may even offer financial assistance or forgive some portion of your total bill.

Debt Management

For people who find themselves in severe debt, there are debt consolidation firms that offer assistance. These companies can help you consolidate debts. They can also directly interact with your creditors to help lower your debts. These companies will not be able to erase your debts completely, but may help you reduce them. Be aware that these businesses usually charge a fee for their services.

Financial Counseling

Many people who are in debt may never have learned how to properly handle their finances. As a result, they might have a habit of overspending and may find themselves in debt. Those who deal with chronic debt and who may not know how to manage their money can benefit from financial counseling.

Spending time with a reputable financial counselor will allow you to examine how you spend your money, figure out how you can pay off existing debts, and make new financial habits to keep yourself out of debt in the future. Some organizations such as churches or nonprofits may offer free financial counseling.

Personal Online Loans

Personal online loans can be a short term method for alleviating some of your smaller debts so that you can focus on the larger ones. Keep in mind that high interest loans can sometimes lead to greater debt in the future. If you already owe money to a lender or credit card company, taking out a high interest personal loan may not be the best idea, especially if the interest rate is higher than what you are currently paying.

One of the main benefits of personal loans is that they are easy to secure. Most lenders don’t ask for collateral and can approve your loan within a few days, sometimes as soon as the same day. In addition, the application process is simple, quick, and easy. Many lenders have online applications which further expedite the process of getting a personal loan. These personal loans are not meant to be a long term solution for chronic debt.

Getting out of Debt

Facing seemingly insurmountable debt can be very discouraging. Finding your way out of debt and back into financial security may seem like an overwhelming task, but it is possible. Whether you visit a financial counselor or take out a personal loan online, there are a number of options for dealing with your debt.