Dealing with debt can be frustrating, time-consuming, and stressful. The outbreak of the COVID-19 has made matters worse as many US residents are struggling to keep up with payments due to the pandemic’s economic impact.
A 2018 survey revealed that the average American owes a massive $38,000 in debt, excluding the home mortgage. This figure becomes even more alarming when you take into account the increasing labor layoffs and fiscal challenges facing various industries.
As you plan for the possible monetary effect of COVID-19 on your debt repayments, it’s well worth your while to take the following precautions.
1.) Take Precautions When Looking into Debt Relief
While exploring debt-relief choices, ensure that you see how the program functions and the everyday dangers of taking it on. Numerous organizations and associations promote that they can enable you to discover “debt relief” by streamlining or paying off your obligation by consolidating or renegotiating your debt.
Be aware that the schemes offered can vary a considerable amount. So, whether its loan consolidation, debt settlement or credit counseling, be sure to understand exactly what the company is advertising.
2.) Think About Working With a Credit Advisor
Credit counseling institutions are by and large non-profit institutions that can counsel you on your finance and debt. Many such programs offer advisory services on home loans or mortgages.
When working with a credit advisor, you have to be willing to open up about your ordinary incomes and expenditures, as well as all your finances, monetary goals, employment status, and financial objectives.
For example, suppose you are engaging credit advisory services like Debt to Success System, you will need to disclose your debt in entirety.
3.) Be on Guard for Scams
Being in a financial crisis can leave you desperate and hence exposed to fraudsters who try to exploit consumers who are in difficulties. In the event where a program appears “too good to be true” kind of deal, there is a strong possibility that it’s a scam.
Possible signs for such scams are failure to explain the result of signing up for the program, giving assurances your debt will disappear, claims of exploiting “new government policies,” and the need for you to present private financial info before receiving information about their services.
Try your best to avoid programs that seem to employ these tactics.
4.) Contact Your Lenders if You’re at Risk of Missing a Payment
Are you at risk of falling behind in making debt payments on your credit card, student loan, mortgage, or other obligations? Be proactive in calling your bank or lender to clarify your situation.
MasterCard organizations and lenders may have other options available like hardship programs to help you settle your debt. These programs are sometimes called “accommodation,” and they are designed to support you.
They also permit you to defer or change a few payments temporarily, and sometimes you may be allowed to avoid charges. Enrolling in such hardship programs before delaying on your loan payments may save you from negative credit reporting.
Always think about the importance of paying down your debt balances consistently. Set a reminder on your phone that you have to pay them on time every month. Covid-19 changed the society as we know it, but if you stop making payments to your financial institutions, you could put yourself in a financial hole that’s so deep that you can’t dig out of it.