Florida Debt Consolidation – Is Debt Consolidation A Good Idea?

Florida may have enjoyed a good economic condition in the past, but that is no longer the scenario. Most of the citizens in the country are dependent on credit cards and have huge debts which can only be solved through Florida debt consolidation.. 

The situation became so bad that Florida saw about 54,275 bankruptcy filings in the year 2015.

According to bankruptcy statistics in the United Statistics, Florida is at No. 16. The average debt of credit cards is $5,754, and the default bankruptcy rate is 1.76%. This rate increases by 7.6% every year.

Non-profit companies had to come forward to solve these issues. These companies provide Florida debt consolidation and credit counseling solutions.

Florida Debt Consolidation Options

When debt becomes too much, debtors are provided with different credit options. These options will help to compile all the debts and pay them off at once. This way, you do not have to worry about paying multiple premiums for your loans.

There are three options for Florida debt consolidation which you can choose from. These three debt consolidation options are as follows.

Debt Management

When your debts are from high-interest credit card bills, it is best to contact a credit counselor. The professionals will offer you consultancy on your credit card problems. This helps in reducing the interest rates on the outstanding debts.

The credit counseling program will include a debt management plan. This plan will be worked around your budget and provide you with a new interest rate. You will also receive budget suggestions using which you can manage your finances.

The debt management plan will roll your debts, after which you will only make a single monthly payment at reduced interest rates. There is no loan in this plan; hence your credit score will not take the hit.

Another thing in this plan is your creditors will keep getting their payments. Therefore, if your credit score was affected in the past, this is negligent. Your credit score can increase with time as you make your payments.

Debt Consolidation Loans

The next option you can go for is debt consolidation loans. This happens when your debt is more than $10,000. In this, all your creditors will be paid off, and the consultancy will compile your debts into one loan.

You will not have to pay off multiple debtors who will make the pay-off much easier. The best thing about this credit facility is your interest rate is affected by your credit score. Hence, if your credit score is more than 600, the interest loan will be much lower.

There is a major drawback to this loan since it is not suitable for people with poor credit. Consolidation lenders will not be willing to work with people who have low credit.

In case you find someone who will work with you despite low credit. However, it can be difficult for you to afford the loan. The interest rates for people with low credit will be more than 15%. Before you take on a debt consolidation loan, it is best to check if you can afford the loan.

Debt Settlement

If debt consolidation is not suitable for you, the next best option would be to go for debt settlement. However, this is a much riskier option. Debt settlement is also known as debt arbitration or debt negotiation.

Usually, debt settlement is often seen as an alternative option to bankruptcy. This helps you solve all your debt-related issues without having to file bankruptcy.

You can enroll yourself in any program for Florida debt settlement. This ensures you do not have to pay your creditors anymore. You can use all your savings to create an escrow account. The debt negotiation team will try to negotiate with your creditors and convince them to reduce your debts.

Even though there is no fixed amount, the creditors may agree to reduce the total debt amount by thousands.

After the team can settle all your debts, you can give a lump-sum payment from the escrow account you have created. This will give you the freedom to start a new life without any financial burden.

It is essential to note that this method will hit your credit score for a while. However, the hit will not be for long, and you can make it right by making timely future payments.

What are the Advantages of Debt Consolidation?

Debt consolidation helps you get rid of multiple payments and reduced your financial burden. It is beneficial for people who are unable to pay off their credits. This reduces the interest rate and ensures you can make the payments without much effort.

The advantages of Florida debt consolidation are as follows.

Lower Interest Rate

One of the greatest benefits of debt consolidation is getting a reduced interest rate to pay off your loans. This will help you pay off the debt faster and save a lot of money.

Depending on your debt consolidation technique, your interest rate will differ. Your credit score will also decide which debt consolidation technique will be suitable for you.

Single Monthly Payment

No matter which debt consolidation technique you choose, you will need to pay a single payment. All your loans and credits will be compiled into one large payment. Moreover, the debt counselor will also reduce your interest rates.

You will have a single goal that you can stay fixed on. This will also help you form a debt plan to decide what your pay-off structure will be.

Build Credit

When you choose a new credit form, the creditors will conduct a hard inquiry. This will lower your credit score to a great extent. However, this hit will be temporary.

You can build your credit score with time by making payments timely and properly. However, it is essential to remember that this is a long process and requires patience.

What are the Disadvantages of Debt Consolidation?

Debt consolidation has many advantages, but there are several cons as well. This is especially for people who have a huge burden. Another disadvantage is for people who have a bad credit score.

The disadvantages of Florida debt consolidation are as follows.

Not Qualify for Low Rate

Even though debt consolidation reduces your interest rate, not everyone might qualify for it. There is a huge gap in the interest date depending on your credit score.

People with high credit scores get very low-interest rates. However, if you have a low credit score, the interest rate is not too low. Lenders will always check your credit scores before you apply for a consolidation loan.

Not Make Timely Payments

A major problem that people face even with debt consolidation is failing to pay their monthly payments. However, if you fail your debt consolidation payment, it could create a huge problem.

When you fail to make the consolidation payments, the late fees will increase. The creditors will send these missed payments to the credit bureaus, which could damage your credit scores.

Summing Up

Debt consolidation helps people get rid of their financial burdens. You can get in touch with Florida debt counseling firms that can offer you suitable options. Once all your debts are paid off, you can start enjoying a relaxing time in your life.

Citizens can get multiple Florida debt consolidation options which will give them a chance at a new life!

Call us at 1-877-850-3328 for a FREE consultation NOW!