Staten Island is a wonderful place to call home, and almost 500,000 residents enjoy doing so. The area provides residents with picturesque natural landscapes, exciting community events and proximity to all that the New York City metropolitan area offers. While there is much to enjoy about life on Staten Island, some residents are stressed out daily by a tight budget. The cost of living is relatively high in this area, and many people also carry high balances on credit cards. This results in high monthly debt payments, which can stress an already tight budget. If you are looking for a way to turn your financial situation around and to repay your debt, using a debt consolidation loan is a wonderful choice to make.
Why Staten Island Residents Have Tight Budgets
The New York City metropolitan area as a whole is known for having a very high cost of living, and this unfortunately includes Staten Island as well. The U.S. Census Bureau reports that the per capita income on average is $32,041. While this is the average income, many residents earn far below this amount. In fact, the poverty rate on Staten Island is 14.2 percent. Despite the relatively low income of many residents, the cost of living remains high. Housing is one of the largest expenses in a person’s budget, and the average homeowner on Staten Island pays $2,390 per month for housing. Renters pay $1,169 per month for housing rent on average. Such stark statistics may indicate why high credit card payments may be unmanageable for many residents. Debt consolidation, however, provides you with a great way to reduce and even entirely eliminate your debt.
How Debt Consolidation Works
To qualify for debt consolidation, you typically need to have good credit scores. Some people who have a very tight budget may have late payments, collections accounts and other derogatory items showing on their credit report. These issues can cause scores to plummet. If this is the case for you, you may need to seek debt relief through debt negotiations and settlement or through bankruptcy. These two options can damage your credit rating, so consolidation should be used first if possible. If you do have good credit scores, consolidation may be a great option to consider because it offers many benefits. The process of consolidation requires you to first select and apply for a loan that you will use for consolidation. This often is a home equity loan, but it may also be an unsecured installment loan or even a car refinance loan. With the loan proceeds, you pay off your existing credit card debts, and many will also close these accounts so that no additional charges can be made. When this process has been completed, you simply have a single debt payment to make each month. A consolidation loan usually has a fixed term and a low interest rate, so your payments are often substantially lower. This can improve your budget going forward. In addition, more principal is paid down with each payment, providing you with faster debt reduction. As you can see, this is a great way to improve your financial situation.
The Legality of Debt Consolidation in New York
It is wise to learn more about the legality of debt consolidation loans before you decide to make this move. As you can see, debt consolidation is a method of refinancing debt from one account to another. New York permits its residents to do this. However, be aware that the state also permits credit card companies to sue you in court if you fail to pay off your debts as agreed. Finding a way to pay your credit card companies is critical if you want to avoid a potential lawsuit.
Credit card debt is a serious problem for many people in Staten Island, and it can seem challenging to overcome this problem on your own. With the help of a debt consolidation loan, you may be able to more comfortably make your debt payments each month. You may also see faster debt reduction and enjoy a debt elimination plan. If you have decided to move forward with debt consolidation, take the next step to compare loan options to find the loan with the best terms for consolidation purposes.