Important Things to Consider When Looking for Debt Relief

Being in debt is stressful – for many, it is a reality that weighs heavily on their shoulders, keeping them up at night. Some people even flinch at the sound of their phone ringing, fearing that a debt collector will be on the other end. 

So what is a person to do? Seek financial help, of course, but before you go about it, make sure that you do your research first. There are a few different options for debt relief and you want to make sure that you are choosing the right one that works for you.

Debt Consolidation Loan

debt relief

A debt consolidation loan is a popular option when it comes to finding help out of a bad financial situation. It is considered a money management tool that lets you combine or consolidate your unsecured debt (like credit card debt, personal loans, phone, and hydro bills, etc.) into a single loan from a single lender. The lender will pay off all of your unsecured debts while gathering the combined sum into a single loan with a set interest rate, which you are responsible for paying back.

While it sounds good on paper, make sure you do your research before committing to a potentially bad credit consolidation loan that leaves you with even higher interest rates. That’s right – while the aim is to achieve lower interest, this isn’t always an option with some lenders, especially if you are considered a high-risk borrower. High-risk borrowers can expect interest rates of 14 percent to over 30 percent from second-tier lenders, which can do more harm than good to your financial situation.

The other problem with these types of loans is that they can be difficult to obtain unless you have an acceptable credit rating or collateral like property or other assets. This is unfortunate because people who truly need the help are the ones who are going to be denied assistance.

Debt Consolidation Program

Consider an alternative approach with a debt consolidation program provided by a non-profit organization dedicated to providing financial management services to those who need it most. While identical to a consolidation loan, the biggest difference here is that there is no loan involved and anyone can qualify to enter the program and receive the help of a certified Credit Counsellor. Not only will they consolidate your debt, lower your monthly payment, and lower (or completely stop) the interest, but they will also stop calls from collectors and guide you through the entire repayment process.

What’s more is that a Credit Counsellor will also give you the financial management skills you need to ensure you don’t fall right back into financial trouble after you’ve completed your repayment program – less than 1% of clients will ever need to do a second program. This extra bit of care just goes to show that they are truly interested in helping and not just a lender looking to collect interest off you.

So if you’re seeking debt relief, make sure to find the right kind – choosing to participate in a program vs. a standard loan can really make a huge difference in your journey towards financial wellness.

Little-known Ways to get out of a Car Lease early

Car lease

It can be fun to drive around in an expensive car that you don’t even own. No more worrying about maintenance, low monthly payments, tax benefits, no need to pay a huge sum upfront and no repair costs. Everything seems to have worked out perfectly.

But there is a catch in leasing a car. What if for some reason you lose interest in that car? Maybe you bought a new one or are going to relocate to another location. Anything can happen and in such a situation you need to find the cheapest way to get out of the car lease.

Here are a few ways you can get out of a car lease early.

1. Transfer your lease

Instead of worrying about the lease cancellation process, you can just find another person who wants the same car and willing to pay off the remaining lease. Find a third party buyer from a site like swapalease.com and get rid of the car forever.

SwapLease is also featured in popular publications like The New York Times and The Wall Street Journal. So, you can trust them to get the job done.

The process of transfer is not at all complicated. You just have to submit the required documents(of the third party buyer) along with a small transfer fee($50-$500). Your original leaser will verify the document and approve the deal.

2. Just return the car

This option is easy but is the least preferred way to get rid of a car on lease. When you return a car that you had on a lease, you are required to pay a hefty termination fee to your leasing company.

Along with the termination fee, you will also have to pay the remaining amount that you owe. Then, the leasing company will either sell or lease the car at an auto auction. This might you only respite as the sooner they sell/lease it, the lesser will be your depreciation amount.

3. Trade or sell the car to a third party

Selling or trading the car you have on lease is another popular and profitable option. You can’t directly go out to sell the car as you don’t yet own it. To find eligible buyers for the car, you need to first buy it from the leasing company(also pay the termination fee).

This method is profitable as you get to decide the price for the vehicle and also get to keep the profits. Secondly, trading the car to another dealer is also a good option. But you won’t get the same amount of profits. The only respite here is you get to avoid paying the taxes as you are not directly involved in the transaction.

Summary

By now you must have understood that there are some pros and cons of getting out of a car lease early. Since you made a deal with the leasing company, getting out it will not be possible without paying the penalty. However, the second option is the best one. Particularly, if the car in a good condition and the model sought-after by many people.