Consumers looking for financial relief might be able to find it with a combination of debt consolidation and mortgage loan modification. Consumers struggling with debt are usually behind on their credit card bills. At the same time, many are struggling to make their mortgage payments each month. This combination can lead consumers to future financial problems. Fortunately, there are solutions for both problems: debt consolidation loans and mortgage loan modification programs.
Consumers who face overwhelming credit card debt often turn to debt consolidation programs to help them reduce that debt. Debt consolidation companies take consumers’ debts and combine them into one monthly payment. As long as consumers pay this monthly payment on time each month, they won’t have to worry about collection agency calls. These loans aren’t perfect, of course. For one thing, they can be pricey. Debt consolidation services often charge high interest rates and origination fees. Secondly, these loans also hurt consumers’ credit scores. In today’s financial world, having a low credit score can be a burden; lenders rely on these three-digit numbers to determine who gets loan money and at what interest rates. Still, by taking out debt consolidation loans, consumers can ease the stress that comes with high credit card bills.
Mortgage Loan Modification
For consumers struggling with mortgage loan debt, there is another solution: loan modifications. Consumers who are struggling to make their mortgage payments each month can call their lenders or banks and ask for a modification that will leave them with a smaller payment each month. Lenders can do this by reducing homeowners’ interest rates, forgiving a portion of their principal balances or restructuring the terms of their loan. Usually, homeowners who want a modification will have to write a financial hardship letter explaining why they can no longer afford their monthly payments and will have to show financial proof, in the form of copies of their credit card bills or paychecks, that their gross monthly income has, for whatever reason, taken a serious fall that makes their mortgage payments unaffordable.
Consumers who do turn to debt consolidation loans or mortgage loan modifications for financial relief must then take steps to make sure they never need these services again. It makes little sense to use a debt consolidation loan only to run up your credit cards again. It makes just as little sense to apply for a mortgage loan modification only to find that you still can’t pay your mortgage loan even in its smaller form. It’s not easy for consumers to keep their finances spotless, but with a bit of help from debt consolidation programs and mortgage loan modifications consumers do have options for starting over.