What Are the Benefits of Debt Relief?

If you are facing a mounting hill of credit card debt, you also may have noticed the array of debt relief and debt management options available to help you address this problem. Although there are many caveats that should be explored before blindly jumping into a program that promises to eliminate your debt, it is important to realize that you will reap many personal and financial benefits from enrolling in a legitimate debt relief program.

Reduced Interest Rates and Fees

If you are exploring debt relief options, it is highly likely you are mired in outrageously high interest rates and fees assessed by your issuer. When you get on a debt relief plan, one of the first things that can be done is work with the creditors to get your interest rates reduced to more reasonable levels and stop fees from being assessed. Another option is to consolidate all of your outstanding debt into a single loan that carries a lower rate than your credit cards. The interest savings alone can be significant and allow you to apply more of your payments to principal each month.

Consolidated Payments

Many people struggling with debt find themselves servicing multiple accounts and making a multitude of payments each month in an effort to stay current. A benefit of debt relief is to consolidate all of your accounts -- either through a new loan or debt management plan -- and have you make one single monthly payment to service your outstanding balances. This can make budgeting significantly easier and reduce the stress from having to write 10 or more checks each month for each account.

Rebuilding of Credit

Although credit scores are easily ruined, they begin rebuilding the day you start making responsible credit decisions and paying your accounts on time each month. As credit scores give more weight to your most recent activity, even a year of making payments without being late can have a monumentally positive impact on your credit score. Once you are on a debt relief plan, you should be in a better position to make timely payments to your creditors and pay down balances and get back into good standing.

Peace of Mind

Having your debt spiral out of control can be very stressful and overwhelming. Sometimes the best stress relief is facing up to the situation and putting a plan in place to tackle the debt loans. Simply enrolling in a debt relief plan can bring peace of mind by alleviating the burden of feeling out of control and stopping the collection calls and letters.