Debt negotiation & Debt consolidation

Posted by nabeelshaukat on September 7th, 2010

Debt negotiation & Debt consolidation:

Many financial institutions or finance providers are hesitating today to provide students with credit facilities due to increasing rate of frauds and bad debts, and overdue student loan debt is becoming a serious problem for students these days. Affiliates and graduates are failing to pay back loans to their creditors because of lack of resources available to them. In such conditions, the very first and better solution is to contact your lender and inform him/her with your current circumstances. This action may help to reduce or almost eliminate your student debt. If you find it difficult to negotiate directly with your money lender then you can appoint a third person who can also be an entity to contact and bargain with creditor on your behalf. But if, you have sufficient resources then there is no need to hire anyone. Simply contact your creditor and pay off your loan. If situation is contradictory, even then, you should contact your creditor on first hand and explain the circumstances you are in. A wise person may understand your status and react accordingly.

Avoiding your money lender and allowing him/her first to contact you can make your case weak, therefore, you must take the initial step. There are some helpful professional debts negotiating programs that help in planning for dealing with loans taken. They are kind of similar to debt consolidation services. Nature of their work is that they do formal discussions with your creditor and insist him/her to grant you the required amount of time or discount. But, remember that you should have a minimum amount of cash available to settle final discounted debt.

One another important thing to keep in mind is that your creditor has no objection to deal with the entity you choose. Also, you must select the organization with proper care i.e. select the one who provides proper counseling according to the situation rather than enrolling all kind of clients in a single pool.

The definition of a debt negotiation program is that it?s a process where one negotiates with the creditor to settle down the debts at lower amount. For instance, you borrowed an amount of $10,000 to sponsor your study and you now have less resources to payback then you can bargain on the amount available to you, say, you can pay only $6,000.

As per the rule defines, creditor will edit your account and amount would stay for seven years in your account. But, remember that your creditor is not bound to make discussions with you or your selected organization. He/she may simply and strictly refuse in the start of negotiation.

Normally, one appoints a debt negotiator when his/her financial situation is bad. Most of the creditors prefer to settle the debt amount with currently available cash or cash equivalent rather than extending time period for number of years. One notable thing here is that never get trapped into scams like you do not need to payback your debt because of illegal interest rates being charged by the lender. This is fake information.

If you have future plans and strongly believe that they would work in future then do explain them to your creditor and ask them to give you relief. Negotiations done by your own self would let the creditor know that you are keen to settle down the debts in a way which are in benefit of both, you and your lender. However, always show your positive attitude.


Many people confuse debt negotiation with debt consolidation.

A debt consolidation loan helps you to pay off your current outstanding debt and allows you to pay the new debt in long term with minimal interest rate. But, keep in mind that ultimately you have to pay it back as well in some future time.

Another better option to pay your student loan is to contact your relatives and dear ones to help you financially. They would charge a very low interest rate and there may not be threats like from money lenders and financial institutions.

If you feel that your rent and rates and specially the credit bills are much higher than your earning and you are left with no other option to pay off them than debt consolidation and debt negotiation can be useful tools. Don?t stress up your life. These tools may help you to stay on track. 


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Joined: August 12th, 2010
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