Benefits of a Debt Management Program
With so many possible options for debt relief, you want to know you’re choosing the right option and making the best decision for your finances and your future. While every financial situation is different, a debt management program can provide distinct advantages to consumers versus other debt relief options. In the right circumstances, a debt management program can help drastically improve your finances now and improve your financial outlook for the future.
If you’re wondering if debt management is the right choice for you, give us a call at 1-844-402-3073 to speak with a credit counsellor. They can review your debts and assess your budget at no charge, then provide personalized advice on which debt solution fits your situation.
Reduced monthly debt payments
The primary benefit of a debt management program for those who enroll is it reduces monthly debt payments — usually to between 30 – 50%. If you qualify for a debt management program, all of the multiple unsecured debts you include in the program will be consolidated at a lower interest rate (often between 6% and 10%). This can help drastically reduce your monthly debt payments to make your debts more manageable for your monthly budget.
One payment, no worries
The other nice thing about consolidating your debts with a debt management program is you only have to make one payment on all the debts included in your program. Instead of juggling multiple bills and due dates, you make one payment each month. With Consolidated Credit, you can even sign up for our AutoPay system, which is a simple way to automatically set up your payments. This way, you don’t even have to think about making your payments to stay on track.
Eliminate penalties and waive fees
Another advantage of enrolling in a debt management plan is your credit counsellor can negotiate with creditors on your behalf. They may be able to get creditors to waive penalty interest rates and penalty fees applied to your accounts as a result of late or missed payments caused by your debt burden. In addition, your creditors will usually agree to bring any accounts where you’ve been late or missed payments to current within 3-5 payments through a debt management program.
Get out of debt faster
Even though you pay less each month and make only one payment for all the debts included in your debt management program, you often get out of debt faster by enrolling in a debt management program. This works because the interest rates on your debts get reduced usually between 6% and 10%. This drastic reduction in interest allows you to pay off your debts sooner even as you pay less each month, because you pay less in accrued interest.
While every situation is different, most consumers who enroll in a debt management program complete the program to become debt-free in 36-60 payments. That’s just 5-7 years to completely eliminate your unsecured debt, rather than taking the next few decades to do it.
Help your credit
Although every financial situation is different, in some cases a debt management program can contribute to rebuilding your credit rating. Once you enroll in a debt management program, any debts you include cannot be penalized further on your credit report. So if you included all of your debts into a DMP and make your payments on time, then your credit rating decline will stop. Even if you don’t include all of your debts, as long as you stay current with your bills, you credit rating decline should at least level out.
In addition to potentially stopping your credit rating decline, successful completion of a debt management program also allows you to build a positive credit history while reducing your total debt. These are the two biggest factors in determining your credit scores — your credit history and total debt owed. If you reduce your debt and build a positive credit history through a debt management program, you make a positive impact on both factors and may see an improvement in your credit scores.
Avoid bigger financial problems & build a brighter future
The best thing about enrolling in a debt management program is getting peace of mind that you’ve avoided facing bigger financial problems because you finally have control over your debt. Debt settlement and bankruptcy can both have lasting negative impacts on your credit and put your financial future at risk. By enrolling in a debt management program, you can pay your debts back in full and get your finances back on track.
In addition, your personal credit counsellor isn’t just there to be an administrator; they are credit experts trained to help provide the financial education and tools you need to be successful. Consolidated Credit offers a wide-range of financial resources to help you get on track with your finances and stay on track once you complete your debt management program. Our goal is to make sure that once you beat your debt problem, it doesn’t simply come back in a few years. We teach you the skills you need to manage your finances successfully now and in the future. If you still have questions or you want to know if debt management is right for you, call us at 1-844-402-3073 to speak with a credit counsellor now.