Short Term Debt Settlement Loans

What do you do if you have acquired a lot of debt, and are finding that you no longer have the capacity to repay it that you did when you originally took on the debt? Credit cards, store charge cards and other revolving credit can add up, especially if you fall behind on payments and higher interest rates and late fees begin to add up and eat into the amount of money you are paying on the principal each month. There are short term debt settlement loans available that may help you, but you need to consider carefully before agreeing to such loans, and understand what you are getting into.

What are Short term Deb Settlement Loans

Short-term debt settlement loans are often referred to as payday loans. These are often used by individuals who want to get out of one high-interest rate debt and pay it off quickly to keep the debt from being late or going to collections. However, many of these short-term debt settlement loans can carry higher interest rates than the actual credit card or original debt did if not paid off within the specified time period. In addition, it is easy to get trapped in a cycle of using one short-term loan to repay the previous short-term loan, and this is a bad financial decision which never gets you out of debt.

Better Options

Moderately short-term debt settlement loans are often offered by banks and debt settlement companies for a period of three to five years. These consolidate your debt at a lower, fixed interest rate as opposed to the high variable rates of your credit cards, and they allow you to pay it back over a shorter period than the actual credit card company, which has no specified repayment period.

These loans are a good option if there are not excessive fees or interest rates attached in the fine print, and if the monthly payment that you will receive from taking one of these loans will not be more than you can afford at your current income level. If the payment is too high, you are merely swapping one bad debt for another.

Loan Pools Online

There are also short-term debt settlement loans available through loan pools on the Internet. Several companies have sprung up where you are essentially borrowing from a pool of lenders who will be paid back by the company you contract for the loan with over a specified period of time, again, typically three to five years. The interest rates on these loans are often competitive with bank rates, and the loans may be easier to apply for and faster to be approved than a traditional bank loan.

Getting Help

If you are interested in getting a debt settlement loan or in exploring your options for debt settlement, then you should consult with an experienced debt settlement attorney. Your attorney can provide you with detailed information about your options for settling your debt and can help you negotiate with creditors to get the best deal possible.