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Debt Consolidation Loans in Mississippi

Debt Consolidation in Mississippi is most common due to the high level of unemployment and poverty rates. Most residents seek out the various consolidation programs with the aim of reducing their interest rates, getting help in the management of debts, and lowering their late fee charge. It is also easier making monthly payments to one lender rather than several of them. Additionally, enrollment into a debt consolidation plan helps one settle their debt faster than paying out the loans on their own.

Income Inequality Gap

Debt Consolidation Loans in MississippiThe income inequality gap between the rich and the poor is highest in Mississippi than in other states with over 3 million residents facing economic struggles. A study done in 2012 showed that approximately 14.9% of the state’s residents live below the poverty threshold with an income of $28,051 per person. The rate of poverty has resulted in the inability to pay their bills especially the medical, educational, and household bills. Most of the Mississippians have not gone beyond high school hence their failure to secure a job that would earn them a higher income.

Socio-Economic Conditions

Excellent education skills would help any resident navigate in the corporate world. However, most of the Mississippi residents do not have the career skills that would get them a good job to pay their bills and insurances. The wages have stagnated in the state for a very long time while the manufacturing industries that would employ the workers without higher education have also been on the decrease. That means most Mississippians languish in poverty and their best alternative would be getting into a debt-consolidated program.

Mississippi Debt Consolidation Program

The average credit score of any Mississippi resident is 680, while $4594 is the average credit for any resident in the state. It is not everyone in the state who keeps such figures on their credit cards, and the numbers will most likely be higher than expected. The Mississippi debt consolidation comes in handy in helping the residents compare multiple bills into one low monthly payment option. The two ways used to merge the bills include:

1 Consolidated Program

The consolidation company engages the creditors and other lenders into negotiations with the aim of reducing the borrowers’ interests on their credit cards. They also help replace the multiple bills with one monthly payment. Some of the bills paid through the program include personal loans, medical bills, collection account, credit card bills, and other unsecured bills. The debt consolidation company only requires you to sign an agreement form for you to sign up.

2 Consolidation Loan

The debt consolidation loan, available from a bank or a private lender comes with low-interest rates. It involves merging all of your debts into manageable monthly payment paid in installments until it clears. However, it is important to calculate how much you will save through debt consolidation before signing up.

Importance of Debt Consolidation

A debt consolidation company in Mississippi analyses the financial conditions of their clients and then advises them on the best cause of action. The companies also work hand in hand with the lenders and creditors to help in reducing the interest rates on the credit cards. Some of them provide counseling services to the Mississippians to help them stay out of debts after clearance. The debt consolidation companies also assist in distributing the monthly loan payment to your different creditors.

Eligibility Criteria

Most of the Mississippi residents are in dire need of the debt consolidation services. However, most of the people that get it are the people facing severe financial hardships and are not in a position to make a monthly payment to their creditors. The debt consolidation company helps relieve the burden of massive debts and high interests. Additionally, the program is ideal for anyone who is a few months behind on paying the credits.

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act and the Mississippi Debt Management Services Act regulates the debtors and creditors relationship to prevent the harassment of the borrower by the lender. Some of the things recognized by the act include:

  • The law acknowledges that the debtor should pay off their debts but should not be subject to any form of harassment.
  • Lenders have the right to call the borrower to ask for their payment or file a lawsuit in court.
  • The act also regulates the maximum amount that any collection agent can charge the residents, and it currently stands at 8%.
  • The credit companies should recover their debt in a specified period after which it is no longer recoverable.
  • Delinquency applies only after the day that the debtor has gone overdue and not from the date of their last payment.

Accreditation

There are many cases of debt consolidation frauds in Mississippi. Avoid rushing to a given provider without running a background check on them. You can verify the company accreditation with the Better Business Bureau. Any Mississippian having challenges should consider contacting various debt consolidation companies in the state who will help share the burden.