If you earn a low income and are in debt, there are a options available to help you become debt free. Seeking help from debt counseling services, negotiating with creditors or taking out a personal loan are some options. By repaying a little each month, you will be able to get out of debt. Learning how to better manage your income or finding a higher-paying job are ways to ensure you don't end up in debt in the future.
Debt Counseling Services
If you owe a significant amount of debt and are falling behind on monthly payments, contacting a debt counseling service may help. Debt counseling services can negotiate with creditors and lenders for lower monthly payments, help consolidate your debt into one monthly payment and help you create a budget that allows you to repay the debt while learning how to manage your money wisely.
When choosing a debt counseling service, look for a service that helps you learn how to manage money. Non-profit and for-profit services are available. Those that charge a fee for their services should be researched carefully. Research the legitimacy of debt counseling services by contacting your local commerce office and by contacting the Better Business Bureau.
Nogociate with Creditor and Lenders
Contact creditors and lenders before you fall behind on payments. This is the best time to ask for changes to your payment schedule or to ask for more time to repay your debt. Creditors and lenders are more likely to grant lower monthly payments to people actively trying to repay their debt.
Obtain a copy of your credit report and credit card and loan statements. If you're already behind on payments, ask to speak with a supervisor. Tell them your situation and how you plan to repay what you owe. Be specific in what you're asking for. You may need to contact creditors several times before they agree to what you're asking for.
Create a debt repayment budget. This budget should include all debt and how much you can afford to pay each month. Stick to this budget until your debt has been repaid.
Personal Loans and Other Options
Even though you have low income, you may still qualify for a personal loan to cover your debt. With a personal loan, you will only have to make one payment each month. Your personal loan may include an interest rate that's lower than most other loan and credit card payments.
If you can't obtain a personal loan from a bank, consider asking family members for a loan. Repay the loan as soon as you can or create a loan repayment schedule.
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