If you live in beautiful El Paso, you may be one of the city’s almost 700,000 residents who enjoy the culture and eclectic vibe of the city. While there is much to love about living in El Paso, the unfortunate reality is that some residents are not so carefree. Financial concerns are common among area residents, and one of the primary reasons for financial stress relates to high credit card balances. High credit card balances often have significant monthly debt payments, and this is because of the revolving term and the high interest rate. Such high monthly payments can strain an already tight budget. Finding a way to pay down or eliminate your credit card debt can drastically improve your financial situation, and debt consolidation may be a great option for you.
The Financial Situation For El Paso Residents
There are many wealthy residents in El Paso, and many of these residents have minimal or no credit card to worry about. The average resident, however, is not so fortunate. The U.S. Census Bureau reports that the average per capita income in El Paso is approximately $20,200 per year. Approximately 21 percent of El Paso’s residents live below the poverty line, and many other residents live only slightly above this level. Even those with a decent income, however, still struggle because of high expenses. Consider that the average homeowner in El Paso has a monthly mortgage payment of $1,148, and the average renter pays $752 each month in rent. This signifies the cost of living in the area in comparison to the low average income. This type of living situation can often lead to a reliance on credit cards to pay for basic living expenses. Credit card debt can also accumulate because of unexpected expenses, such as car repairs, home repairs, medical expenses and more.
What Debt Consolidation Accomplishes
When you consolidate credit card debt to a single new loan, your debt is not vanishing. It is simply moving to a new account. Because of this, you may wonder what consolidation accomplishes. Your new loan will have dramatically better loan terms than your credit cards have. The typical consolidation loan has a very low interest rate paired with a fixed term rather than a revolving term. These are powerful features that can result in significantly lower payments as well as faster debt reduction. Your payments may be lower, but more debt is being paid off with each payment. Many people also benefit from having only one loan account to keep track of each month. As beneficial as consolidation is, keep in mind that it is not ideal for everyone. It essentially requires you to apply for a new account. You may consider using a home equity loan, a refinance loan for a car or boat or even an unsecured personal installment loan for debt consolidation purposes. In most cases, you will need to have a good credit score to qualify for a new loan. If you cannot qualify for a debt consolidation loan because of low credit scores, debt relief may also be found through bankruptcy or settlement.
The Legal Aspects of Debt Consolidation
If you believe that you may qualify for a debt consolidation loan, you may be interested to learn about the legal aspects of this type of financing. It will take a lot of hard work to eliminate your debt even after you have transferred debt to a consolidation loan. This is because consolidating debt does not erase any debt, and instead, it refinances the debt so that you can take advantage of better loan terms. There are not any laws in El Paso that prevent you from refinancing debt. There are laws that enable creditors to take you to court for unpaid balances you owe to them. With this in mind, debt consolidation may be an option to consider as soon as possible.
Debt consolidation can provide you with immediate relief in your budget because of lower debt payments, and it can position you to potentially be debt-free within a few years. If you are ready to explore debt consolidation as an option to improve your financial situation, the first step to take is to determine which financing options you can use for consolidation purposes.