Debt Relief Grants

The Truth About Debt Relief Grants

You see the advertisements all the time. TV ads, banner ads and unsolicited spam mailings, all promising to get you out from under with the help of debt relief grants. Sounds good, doesn’t it? Problem is, such a simple solution does not exist.

There are grants that can help you ease the burden of specific debts but there aren’t any that will erase your debt. Only you can do that. Any agency that promises that they can help you get debt relief grants is more than likely than not a scam or else they are falsely marketing themselves to get you to sign up for one of the two main methods of debt assistance: debt counseling and debt settlement programs.

Mainstream Debt Relief Programs

Reliable debt relief agencies will not promise miracles but they can help you get out from under your debt with two proven methods, debt counseling and debt settlement. Remember, the agency is not there to hold your hand and wave a magic wand; they are there to help you take back control of your finances and your life and all it requires on your part, other than a customary fee, is a dedication to getting your finances back on the right path.

Debt Counseling

In debt counseling, you will receive a serious education on credit management. You will learn how to properly make a budget that you can stick to and teach you how to reduce interest rates through proper credit management.

The first step in doing this is to take an honest look at your debt and figure out how to pay off those with a lower balance first and then apply those payments to paying down the higher balances. Most credit card and loan companies will consider lowering your interest rate only through consistent payments and not just the minimum amount due. You save money through lowering your balance, leaving less of an amount for the creditor to charge interest on. Over time, your actual interest rate will be lowered because of this practice, more often than any miracle negotiation.

Debt Settlement Programs

This brings us to debt settlement programs. A lot of them will promise to lower your interest rate through negotiation and this is patently a falsehood. Negotiation will not get you a lower interest rate; however, paying consistently on your accounts will help you get that accomplished.

What true negotiation with your creditors can help you accomplish is to settle your debt for less than you owe. This negotiation can only take place if your debt is past due for at least four to eight months at the time you secure a debt settlement agency. Depending on the amount of your debt, you may wish to consider credit counseling first but if your debt is $10,000 or more, debt settlement would be your best option.

If the settlement on your debt comes through and the creditors are willing to take a lesser amount than you actually owe, you must follow through with whatever agreement comes about. If you are serious about taking control of your credit, you must make a commitment to do what it takes to meet that agreement, no matter what. To do otherwise will mean defaulting and the creditors will have every right to demand the original full amount due. This will mean litigation and potentially seizure of bank accounts and pay checks, something no one wants to happen.

Debt Relief Grants

As we said earlier, there is no such thing as debt relief grants, that is, grants designed to completely eradicate your total debt as it stands. What does exist, however, are grants available to the general public at both federal and state level that will help you manage your debt, under some very specific categories. You will have to find the grants that best suit your needs, apply for them and then wait for approval. Keep in mind that applying for grants can be a tedious affair and there are agencies that can help you draft the proper application and cut through some of the confusion. It will take time for approval, so this is not a method meant to be done at zero hour, seconds before the car gets repossessed or the bank forecloses on your home.

The types of these debt relief grants that are available and the requirements for applying for them will vary from one area to another and even the time of year that you apply will have an effect. Some are available all year round, while others will only be available for a limited time.

With the right agency at your side, grants can be researched that go well beyond those offered by federal, state and local governments. There are debt categories that can be set off by grants from charitable organizations, private lenders and private benefactors. Not all of these are publicly advertised. Still, it does not hurt to apply, if there is a chance that it will help get you out of debt.

Debt Reduction Loans

A popular program offered through government assistance agencies that is sometimes easier to obtain than any debt relief grants is a debt reduction loan. With a debt reduction loan, you can borrow money to pay off your debt completely, with an interest rate that is much lower than that on most credit cards or mortgages. You will have to pay this loan back but it will take the burden of your existing debt off of you and drop your monthly bills from several to one.

If a considerable amount of your debt is in student loans, another kind of loan is possible through government agencies that offer debt relief grants. Called an Income Based Repayment Plan, it takes into consideration your total yearly income and uses that information to get all of your loan debt consolidated into one affordable payment per month.

There are several options out there. All it takes is some research, patience and knowing how to utilize the help of reputed debt relief agencies that are experienced in helping others get their finances back on track.