Being a single mother is one of the most difficult tasks as a single mother is responsible for handling everything from her own job to the future of her kids. A single mother has a number of duties because she is the head of the entire household. However, a sad truth is that a number of single mothers find it difficult to make both the ends meet and hence they end up taking loans from the financial institutions like credit unions or banks. At times it has also been observed that they find it difficult to pay the withstanding debts. However, there is nothing to worry as a number of debt relief options are there, which they can consider if they find it difficult to manage all the payments.
All the debt relief options are going to make it easier for you to pay your debt, by reducing interest rates or providing you with extra time for paying the money. As a single mother, it is your duty to conduct a research on all the debt relief options, and gain a sound knowledge about how they are going to affect the finances as well as the credit score. On basis of that, you have the freedom of choosing the debt relief option that you think is perfect for you. Given below is a list of the debt relief options that you can consider.
Debt consolidation with personal loans
As a single mum, if you are having numerous debts, you have the option of consolidating them with the help of the unsecured personal loans, at a low rate of interest or with the longer repayment periods. You can then use this money that has been obtained from your debt consolidation loan for paying all the withstanding debts. This is considered to be one of the best options that you can take into consideration. Also, the terms that are associated with a consolidation loan should be much better in comparison to the terms that are associated with the various other loans. Debt consolidation with personal loans is a great idea if you are capable of making payments in order to pay the complete amount of your loan.
Debt consolidation with home equity loans
There are certain single mothers who cannot obtain the unsecured personal loans for a favorable rate. They can consolidate the debts with the help of the home equity loans. However, you need to understand that this option is not something that should be the first priority of the single mothers. The reason behind this is that the house is going to serve as the collateral, and if due to any unforeseen or unfortunate circumstances, you are unable to complete the payment, you are going to lose the home. This can further lead to a number of unwanted troubles for both you as well as your kid. This is why it is suggested that a single mother should not prefer to consolidate with the home equity loans, without taking suggestions from the credit counselors or exploring the other options.
Debt settlement is responsible for lowering the credit score of a single mother as well as any other person, and you should avoid entering into it, until and unless it is absolutely necessary. But it can be of extreme relief to the single mothers who are not capable of paying the complete amount of the unsecured debts, like the credit card balance. In a debt settlement loan, you have to negotiate with the creditors and if the creditors agree to the fact that you are actually not being able to make the entire payment that you actually owe, they can accept a certain amount of the entire payment, and not ask for the rest of the amount. There are a number of creditors who do not agree to the debt settlement programs, and during these situations, you might have to opt for some other debt relief program, on basis of the ones that are appropriate for you. You can click here to know more about debt relief programs. According to www.dailyherald.com, debts can be settled for 45-50% of the withstanding balance.
Debt management programs
In order to enroll yourself in the debt management programs, it is important that you fix a meeting with the credit counselors and ensure that you are sharing proper information that is related to the financial condition that you are in currently. The credit counselor is responsible for creating a proper plan, which states that you will have to make only a single payment at the end of every month. This payment will be distributed to the various creditors to whom you owe money. The credit counselor is going to negotiate in front of the creditors for securing better and lower rates of interest as well as other favorable terms. Debt management programs are considered to be the best options for the single parents, who have a steady income stream to continue clearing the payments and for those, who are ready to agree to all the conditions of the debt management program. They also need to ensure that they are not going to open a new credit card while they still have withstanding debts.
You cannot disagree with the fact that a self-payment initiated is undoubtedly one of the best ways of getting rid of all the debts that you have. You should not choose a debt relief program as soon as you see that you have to pay withstanding debts. The first and most important thing that you have to do is, try clearing all the debts on your own. You have to make a proper plan, write down the total amount that you owe to the creditors, and discover if you have the ability to pay them. If you see that you have enough money or you are making enough money for paying all the creditors, you should do it yourself, instead of opting for the debt relief options.
If you are choosing any debt relief program as a single mother, it is best to choose the nonprofit credit counselors, who are not going to charge any fee. A debt relief program will ensure that all your debts are cleared, and you will be able to lead a happy life with your kid.