It may be difficult for borrowers to convince lenders to help them out with lower interest rates. After all, as a lender, how do you tell if someone is a liability or not? Just because you need a little help from time to time with your debt doesn’t mean that you don’t intend to honor your loan agreement.
If you make a mistake with your payments or have a difficult month just once or twice, you might find yourself with high interest rates and fees. Most lenders use computerized risk assessment systems, which naturally may not take your best intentions into account. While the fact that you are serious about paying off your loans might in actuality affect your overall risk and creditworthiness, many lenders’ systems can’t really take this into account.
From the bank’s perspective, high-risk borrowers need to pay high interest rates to cover the potential cost of default. From your perspective as a borrower, it can feel like the bank is kicking you while you’re struggling to fulfill your obligations.
Debt Consolidation and Sending a Message
The solution to your debt troubles involves sending a message to the bank that it won’t ignore. Signing up for a debt consolidation program is one such message. As the practice becomes more and more main-stream, many lenders see that people who sign up for debt consolidation programs like CreditGuard’s to help get out of debt are lower-risk customers, even if they made a few mistakes in the past. Additionally, consolidation providers negotiate on behalf of their clients to get them lower rates.
In business, actions speak louder than words. While calling a bank and explaining that you’re serious about ensuring that you repay your obligation may have some effect, you may be much more successful by showing how serious you are by getting actual help with debt through a debt consolidation program. It not only sends a message that you intend to pay off your debts in full, but it also shows that you are taking your money situation seriously.
Many people fall into this category, but unfortunately the banks have no way of knowing if you’re one of them. By signing up for a debt consolidation service and making the commitment to pay off your debts, you’re showing your lenders that you are serious about paying off your debts.read more