Many of San Antonio’s more than 1.3 million residents live a comfortable life that is relatively free of money concerns. While some in San Antonio have achieved a level of financial security, the reality is that many others struggle with their finances despite working hard to earn a decent income. One of the most common financial challenges that local residents face relates to debt. You may have high account balances on high interest rate credit cards and consumer loans. These types of debt can be challenging to pay off, and it may even seem like account balances are increasing despite your best effort to keep them under control. If you can relate to this, you may be looking for an effective way to find debt relief and to regain control of your budget. One option is to consolidate your debt as a method of debt relief. Through debt consolidation, you may be able to dramatically improve your finances and even eliminate all of your debt entirely within a few years.
A Closer Look at Personal Finances in San Antonio
According to the U.S. Census Bureau, the average resident lives on a fairly tight budget even before debt payments are taken into account. The average homeowner pays approximately $1,258 per month as a mortgage payment. The typical renter pays approximately $856 per month in rent. This may seem fairly reasonable, but the per capita income in the area is only $22,960 per year. Approximately 20 percent of area residents live in poverty, and you can see that even the average resident has a tight budget. Those who have high debt balances typically are responsible for high monthly debt payments, and this can exasperate an already tight financial situation. The good news is that you may be able to improve your budget by restructuring your debts through a consolidation loan.
How Does Debt Consolidation Work?
You may be aware that debt consolidation requires you to move all of your current debts into a single loan, but you may not be certain how this would benefit you. In fact, you may even worry that this would cause you to have one very large and unmanageable payment instead of having your debt payments scattered throughout the month in smaller amounts. While it is true that you will only have one debt payment after consolidating your accounts, you may be surprised to learn that your total overall debt payment is reduced through consolidation. This means that you will have more money available in your budget each month. Through debt consolidation, you re-establish high interest debt into an account with a lower interest rate. This effectively reduces your payment considerably. In addition, you may be converting debt on a revolving term, such as credit card debt, into a fixed term loan. Fixed terms are more effective at debt reduction, and they can also result in lower monthly payments. When all factors are taken into account, your new consolidation will have lower monthly payments, but more of each payment will be applied to principal for faster debt reduction. Debt consolidation may be accomplished through an unsecured bank installment loan, a second mortgage on your home or even a refinance loan on your car or boat.
What the Law Says About Debt Relief in San Antonio
Texas has been very active about creating laws regarding debtors. For example, the state has established laws that protect individuals from receiving harassing phone calls from debt collectors in certain situations. It also has laws regarding who can file for bankruptcy and what happens if your home is foreclosed on. Because debt consolidation is simply a method of refinancing your debt, it is legally permitted under standard consumer finance laws.
You may understandably feel overwhelmed by stress if you have high account balances on credit cards and loans. These debts may be taking up all of your free money through high monthly payments, and you may be wondering what action you can take to improve the situation. Debt consolidation is one of the most common forms of debt relief available. By restructuring your debt into a great loan with attractive terms, you may be able to re-position yourself to improve your finances.