Dealing With Government Debt Relief Programs
July 23, 2010
Free Government Debt Consolidation – Debt Relief Assistance From the Government
Before the economic crisis hit hard, most lending institutions were very lenient in terms of giving out credit cards and other loans without doing deep background checks. As a result, this has had serious consequences as millions of individuals suddenly found themselves unable to pay these loans back. The high monthly payments in addition to interest rates have left many to resort to government programs for debt consolidation.
If you are faced with the burden of having to pay loans back including credit cards, student loans or medical bills then there are debt relief programs offered by the government. These will help to relieve the financial burden that having several payments can have. In fact, it makes a lot more sense to just have one low monthly payment with an ideal interest rate that you can afford.
Perhaps the biggest advantage with a free government debt consolidation is that you have the opportunity to pay all your debt at once with no collateral. The reason these programs are readily available for struggling individuals is to prevent an economic crisis from occurring again. However, most individuals do not realize that the government allocates billions of dollars a year for such services.
Start by searching online as there are plenty of free websites available to tell you which of these debt relief programs you can be eligible for. Obviously, getting started soon will be more beneficial as you can be on the right path towards paying off all your debt. Simply schedule a free consultation with a local representative in your area so they can have a better overview of your finances and what you need to do pay down your debt.
Bankruptcy should only be used as a last resort so using these government debt relief programs to your advantage is a smart choice. Learning new skills to manage your finances will be hugely beneficial for obvious reasons so that you can learn to save for the future. No matter how bad you think your situation is, it is never too late to take action so you can finally be debt free.
By: Scott Schiller
April 23, 2010
Government Debt Consolidation Loans
Government debt consolidation loans are loans offered through various government programs to pay off multiple loans. This enables an individual to take care of one single monthly payment compared to 3 or 4 payments to different creditors. This is the principle of debt consolidation. Debt consolidation also helps by lowering the interest rate by switching from unsecured debt to secured debt.
The federal government has various programs that help particularly students in debt to consolidate their loans to quickly reduce and eliminate their debt. Students typically have student loans, credit card debt, and medical bills that keep them in a state of high debt. The Department of Education pays off the original federal education loans and issues a new loan for the consolidated amount of the old loans. This is done as part of the Direct Consolidation Loan Program.
The Federal Family Education Loan (FFEL) Programs and the Direct Loan Program are programs that fall under the Higher Education Act (HEA) and allow loan consolidation. This works by issuing a new consolidation loan to the borrower that pays off the borrower’s existing loans. The borrower might have contracted the existing loans from various lending agencies, which have different terms, repayment dates and arrangements. Paying off these multiple loans with one loan and making a single monthly payment helps individuals effect timely payments at a lower interest rate. With a consolidated loan, the monthly payment amount is generally lower. Moreover, there is increased clarity as to the total term of payback, the exact interest rate charged, and the payment due date. In most cases the payback term can be increased to ease the payoff process and reduce the monthly commitments.
The government debt consolidation loan program has four plans for the borrower – standard plan, extended payment plan, graduated payment plan, and income contingent repayment (ICR) plan. Each of these plans has features that suit the situation of a borrower, thus providing the flexibility required of a debt consolidation and elimination program.
By: Jennifer Bailey
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