Debt is a frightening thing. It’s also a huge part of most of our lives, considering that consumer loans are one of the only ways that we can get important things like a home or a car. This means that although I think that many of us would prefer to avoid getting into debt, it’s nigh unavoidable at this time.
Unfortunate, right? When you’re in large amount of debt and are having a hard time keeping all of the bills paid, it can feel like you’re in a hole that’s impossible to climb out of. In those circumstances, what are we supposed to do?
Today, I’ll be going over one of those potential options. Now, as a disclaimer up front, this is not guaranteed to work for everyone. Each person has a unique experience with their debt, and there is not one sole solution for those who are stuck. Rather, refinancing your current debts could be the lifeline that you need, if the stars align properly.
The Impacts of Debt
It’s easy to underestimate the impact that debt can have on both our physical and our mental health, as sad as that is. Anxiety and depression are some of the biggest culprits here, and these feelings can often get heightened from seeing bills or letters threatening to send you to collections. Obviously, that’s something that can incite a panic.
It’s no wonder, then, that people have a hard time reaching out for help in these circumstances. On a societal level, we ascribe a certain level of shame to having loans, even though most of us have them. Given all of these factors, a lot of people end up suffering through this in silence without trying to get assistance.
Unfortunately, this often just makes it all spiral out of control even worse. If you’re finding yourself in this sort of situation, trust me when I say it’s worth a bit of discomfort to avoid having to go to debt collection or to default on your loans. Honestly, that’s one of the worst things that can happen to a person’s finances.
What Options Do We Have?
With all of this said, you’re probably wondering what our options are if we do end up being past due on several bills. Now, one of the keys here is that you do this before you actually default or are sent collections letters. Instead, if you get the first warning, you should jump on the opportunity to do something about it.
For some further details on what refinancing is specifically in relation to debts, you can look here, inkassorefinansiering.com/, a source that I’ve found valuable as I’ve looked into what options folks have. The gist of this plan is that you are able to correct the problem as early on into the process as you can.
So, let’s assume for the sake of this article that the issue is you are unable to make your currently monthly repayments in a timely manner because they are too high. One thing that you can utilize refinancing for is to reduce those payments, at least for a period of time. Now, while that will often end up extending the overall length of your loan, it can at the least help protect you from defaulting.
The reason I say get started on this as soon as you can, though, is because there are probably tons of other people who are trying to do the same thing. While it may not seem like a big deal that this is the case, it does mean that the processing times for stuff like your application and any correspondences could end up taking longer.
Naturally, that’s not going to be a good thing if you’re in a hurry. When you initiate the process as early as you can by submitting an application, though, you should be able to work things out. The key really is in a swift response.
If you’re like me and dread opening the mailbox sometimes because you’re worried about the bills that might be in there, take this as your sign to start checking as often as you can. Sure, it’s hard to face our fears like that, but to catch this sort of thing before disaster strikes…you’ll be thanking yourself later.
Is it Worth it?
The final question to contend with today is whether or not something like refinancing is worth it in the long term. At first glance, it may just seem like a short-term solution for debt that we’re having a difficult time paying off. However, I would argue that this is not really the case.
As you can see on this website, ensuring that we do not default is going to be one of the most critical parts about managing our monthly expenses. The havoc such a thing can wreak on a credit score is really bad, and it can leave you unable to borrow money again for a long time afterwards. Some people never really recover from it, financially speaking.
So, even if refinancing seems like a “band-aid” solution, if it allows you to afford your payments, then it is worth it. Speaking candidly, I don’t really think there is such a thing as a band-aid to put on your financial responsibilities. At the end of the day, you’ll still be paying them through this method – you’re just making an adjustment to the bill each month to make it more manageable for yourself.
Sure, it might mean a few extra months of having to pay that specific bill, but if it saves you the heartache and stress of going to collections, then why not go for it? You may even be able to lower your interest rates a bit in the process, which is a gift in itself.
Hopefully, this has helped you to understand that you can ask for help sometimes, and there are places to turn if you’re struggling to make ends meet thanks to expensive debts.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin