Freedom debt relief program is an innovative solution that allows borrowers, who cannot afford to pay their bills, to save money towards settling their debts. If a common man knows the importance of financial discipline and regular savings, he will not fall under the category of having debts.

One of my friends Thomas had a lot of debt and has opted for this program. He opened a personal bank account in his name, especially to deposit some money every month, which duly he used to repay his outstanding debt amounts. Meanwhile this agency had approached his creditors on his behalf and negotiated for a decrease in the interest amount that Thomas owes them. By doing this, Thomas had to pay lesser amount, when compared to the actual or initial amount.

Primarily, the consumers are given few options or solutions to choose from to recover their debt. Few of these options are:

● Enrolling in a credit counseling or debt management program. Credit counseling is a process that involves educating the consumers about how to avoid incurring debts that cannot be repaid with their existing financial position. So they come out with a Debt management plan, which will suit the customer and eventually, help him to pay off his debts. Credit counseling often involves negotiating with creditors to establish a debt management plan. This in turn helps in reducing the payments, fees and interest rates to the client. The most common benefit is consolidation of multiple monthly payments into one monthly payment, which is usually less than the sum of the individual payments previously paid by the customer. Also there will be reduction in the interest rates charged by the creditors.

● Refinancing to take equity out of their home to pay off credit cards. Homeowners might take advantage of discount refinance rates for equity loans, credit lines, second mortgages refinancing etc. Here, most of the customers benefit from refinancing adjustable rate mortgages and consolidating high interest credit card debt. This has a fixed interest rate for the life of the loan. Many customers have improved their financial state after refinancing their high interest credit cards and consolidating their adjustable loans together into a reduced loan payment guaranteed by a fixed rate.

● By not making minimum payments to creditors. A minimum payment to creditors is mainly opted for, by the customers who have high credit card debts. The lender prefers getting the minimum payments because around 98% of the payment is applied to the interest, not the principal amount. However, in the long term this is not going to help the customer. So better not to opt for minimum payment methods.

Debt settlement may not be the right option for every customer. It has certain potential negative repercussions for a consumer’s credit rating. Debt settlement is an alternative solution to bankruptcy, not an alternative to pay debts in full.

Thomas was happy after approaching Freedom Debt Relief and going through their program, which helped him duly to clear all his debts and charged him only after his debts were reduced, unlike other agencies, which take the money in advance and might not be even so helpful to the customer. He opted for a debt settlement program, where his total debts were added up into one low monthly payment. This turned out to be a faster and cheaper way to get relieved from all his debts.

Author Bio: Freedom Debt Relief

Category: Finances
Keywords: Freedom Debt Relief