How do I Choose the Best Debt Repayment Plan?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 16 February 2020
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When the goal is to pay creditors what you owe even though you’ve gone through some type of financial trouble, choosing the right debt repayment plan is essential. The idea is to go with a strategy that makes it possible to retire the debt as quickly as possible, while still allowing you to maintain an equitable standard of living. There are actually two different approaches that may work, depending on your situation: debt consolidation or a structured repayment plan through a debt management service.

Far and away, obtaining a debt consolidation loan is the simplest type of debt repayment plan available today. Assuming that your credit is not too damaged to qualify for this type of loan, it is possible to pay off all your debts and combine the balances into one manageable payment each month. If you can refrain from creating more debt while paying off the consolidation loan, this approach allows you to begin repairing your damaged credit quickly as your overall indebtedness decreases a little more each month.


When choosing a consolidation loan service, go with a service that will prepare and possibly mail or remit payments directly to your creditors. This saves you a lot of time, and relieves the stress of feeling overwhelmed quickly. Stick to the debt repayment plan and make your payments to the loan company on time. When and as possible, make an extra payment now and then. Seeing your balance decrease each month will help restore your sense of being in control of your finances, rather than having your money woes controlling you.

Many consumers find that working with a debt management services is the most workable debt repayment plan for their situations. Services of this type often help you put together a realistic budget, then negotiate with your creditors to reduce interest rates on your past due accounts and participate in a structured repayment plan that eventually retires your outstanding balances. Assuming all your creditors agree to the terms, you submit one payment to the debt management service each month. They in turn disburse that payment to your creditors.

If your choice for a debt repayment plan is to go with a debt management service, make sure that any service you consider has positive consumer ratings and has working relationships with your creditors. Failure to do so could mean that the debt-payoff plan is rejected by some creditors, leaving you with little to no change in your situation. Also be wary of services that make claims that seem too good to be true. Focus your attention on debt management services that have a track record of helping their clients, both in terms of paying off debt and offering tools to help them manage money more effectively in the future.



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