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Debt Consolidation Loans in Florida: Best Credit Card Relief Programs & Settlement Help Companies

Debt consolidation involves getting one lump sum income to pay any outstanding debts to different lenders or creditors. A consolidation loan has lower interests compared to the other loans and making your payments to one lender reduces your monthly hassle. However, it is advisable to talk to a financial expert before engaging in debt consolidation to find the right deal. Sometimes there are better alternatives to go for other than debt consolidation.

Socio-economic status in Florida

Debt Consolidation Loans in FloridaFlorida had one of the stable economies some few years ago, but it is not the case anymore. The economic situation of the state has continued to go south with approximately 15% of Floridians living below the poverty line. The number of people with increasing consumer debt has also continued to soar. Credit card bills and business debts have continually created tremendous pressure on families with the creditors looking to collect debts. The low employment rate compared to the high standard of living has contributed to the increase in debts on citizens.

Wealth and Poverty in Florida

A large gap exists between the wealthy and the poor in Florida. The income- inequality gap between the two classes has led to increased displacement of people due to significant developments by the rich folks while the poor are struggling with their household bills. The financially challenged people are moving from the state due to the high cost of living while the affluent from other states are arriving every day to make investments.

Important Facts about Debt Consolidation

Eligibility Criteria

  • Debt load– a debt of more than $10,000 qualifies for a consolidation loan. Having a single lender to pay off such amount of income is easier than paying to different creditors or banks every month.
  • Credit Score– you are at an advantage if your credit score rise above 600 since you will have lower interest rates on your debt consolidation loan. Avoid getting the loan as much as possible if you have a low credit score since you might end up digging deeper into your pockets than you expected.

Benefits of Debt Relief

  1. The interest rates and penalties for the consolidation lower are slightly lower than the one on your debts. However, be keen while choosing all advertised loans.
  2. It is easier to make payments to one lender rather than multiple ones.
  3. The lenders also give an extension of the debt settlement period. More time is equal to small monthly obligation hence the good standards of living.
  4. Debt consolidation also allows you to reduce your monthly payments to a figure that is more manageable.
  5. Avoiding bankruptcy– interest rates for people with a lower credit score can be as high as 15% or more. However, the lenders may give room for negotiations that can slash several thousand from your debt package. Debt consolidation would be a better alternative than having serious effects on your credit score after filing for bankruptcy.

Drawbacks of Debt Consolidation

A debt consolidation provider may require collateral for a secured loan, but they only require a signature for unsecured loans. The collateral must be of higher value than the amount covered by the loan. Homes are the most used collateral although the current drop in their prices has led to reduced equity on them posing a problem for the homeowners. Additionally, you should pay attention to other hidden costs in a debt consolidation loan that the provider may not inform you about. Lenders also have varied interests that may rise in a blink of an eye in case of a rise in the economy.

Debt Relief Laws and Regulations by the State

Loan borrowers may suffer in the hands of creditors and debt collectors who may file lawsuits, increase the interest rates to unmanageable figures, or become fraud victims. The Florida state has put laws that stop consumer exploitation and govern the industry. The Florida Consumer Collection Practices Act has set limits that collectors should not go over in their attempt to get borrowers pay their loans. Some of the things that debt collectors should never do include:

  1. Using or threatening their clients in a violent way.
  2. Getting information from a third party about borrower’s debt without their consent.
  3. Pretending to be a law authority like a police officer or attorney acting on behalf of the debt consolidation provider.
  4. Contacting you during un-official hours (between 9 p.m. and 8 a.m).
  5. Communicating or threatening to speak to the borrower’s employer about the debt.
  6. Harassing you or your family in any given way.

Summary

Various lenders such as banks, finance companies, peer-to-peer lending companies, debt relief companies, and credit unions are some of the institutions that provide debt consolidated loans. The loan terms vary from one lender to another, although they can only take the form of personal or a line of credit loan. Contact an attorney if you receive any harassment from your lender. Read more about the best way to get out of debt.

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