If you’re over your head in loan debt, dodging creditors is the last thing you should do. Sure, it may seem they’re out to get you, but the majority of creditors are actually quite willing to work out a plan or program that will make it easier for you to pay off what you owe. In fact, there are multiple options, depending on your specific situation.
As discussed in our post of 3/4/13, a debt consolidation loan may well be the best solution. However, there are other alternatives that may suit you better. One option is asking creditors to lower your interest rate. This would not only provide immediate savings, but would also allow most of your payment to go toward the principle balance, rather than toward interest — thus, over time, significantly reducing the total of what you owe.
Of course, there are loans that don’t allow you to lower your interest rate without refinancing, such as a mortgage or home equity loan. If this is the case, you can request a modification, which is when the bank makes loan payments more affordable for a borrower by altering one or more parts of the loan agreement.
If you have questions or aren’t sure what your best strategy might be, please contact The First National Bank & Trust Company of Newtown. We’d appreciate the opportunity to have one of our experienced leaders meet with you and discuss the many loan options we offer to determine what’s most appropriate for your situation. And in the unlikely event we’re unable to directly service your needs, we can be a valuable resource by pointing you in the right direction.
Has anyone tried any of these debt consolidation techniques? Please share with us how you felt it worked for you?
Kevin Dolton, A.V.P / Branch Manager
First National Bank & Trust of Newtown