Due to a shaky economy over the last decade entwined with a lapse of truthful financial education to the public, more and more consumers are finding themselves in debt. The availability to obtain debt is widely shared to the public as simple and convenient. However, the information about how to actually get out of large amounts of debt comes at a pricey fee for many.
With an estimated population of 10,146,788 residents, according to this 2016 study, North Carolina has greatly increased its poverty level to 16.4% of that population. More specifically in Charlotte, the population is 827,097 people with a higher poverty rate of 16.8%. Without sufficient funds to cover the cost of basic needs and extra necessities consumers are turning to debt as a way of funding their life.
What Is Debt Consolidation?
Debt consolidation is a popular option for these residents looking to get out of debt and eventually obtain financial freedom. This is a process of debt refinancing where an individual takes out one loan to pay off many others. This essentially combines all your debt into a single monthly payment.
What Are The Benefits?
- One Monthly Payment Amount and Date Instead of Multiple
- One Set Interest Rate For The Loan
- Less Likelihood of Missed or Late Payments
- Better Psychological Approach To Paying Off Debt
When you consolidate your debt it creates a reign of simplicity. No longer do you have to worry about making payments on different days. It comes down to one payment on the same day each month. This allows for a clearer approach to paying off debt as if you now have realized there is indeed a way out.
Debt consolidation can be beneficial for a number of people. However, there are some requirements you will have to meet in order to qualify with specific lenders. It’s important to realize that different financial lenders may require various qualifications on their own basis. If you are not approved at one lender you may be approved at another. Some basic requirements are:
- Proof of Income – You have to be making money to take out the loan.
- Credit History – Lenders will look at your payment history.
- Equity – Many lenders will require some sort of collateral, such as home equity.
North Carolina Debt Relief Laws
Every state has their own requirements for how debt consolidation is to be practiced within their borders. North Carolina is no different. They have two main regulations about debt settlement services and debt management plans.
- No debt settle services are permitted to collect upfront fees.
- Credit counselors are restricted to a maximum of a $40.00 fee to establish a debt management plan for their clients. In addition, they may only charge 10% of a monthly payment in the amount of up to $40.00 for their administrative fees each month.
Debt can be a stressful burden on anyone. At times it may feel like there is no end in sight. However, taking the time to properly sit down with a debt management expert and work on consolidating your outstanding debt can significantly lighten that burden.