DEBT
Debt can be such a tricky topic to discuss. It elicits different emotions just at the mention of the word. In some homes debt was a four-letter-word. Other families openly talked about everything at the dinner table, including debt. Many of us have seen the devastation that too much debt can cause. Finding out how debt works the hard way can have long lasting financial and emotional consequences.
GOOD DEBT?
Debt can actually be a good thing. Yes, I said a good thing.
The reality is that there is good debt and bad debt, and it doesn’t just have to do with what you are buying. Debt can put a roof over your family’s head, it can buy a car that allows you to commute to work or it can provide the means to an education to live your dream and make a positive impact in your community.
When deciding to borrow money, it is important to consider the impact of your decision and to make the best decision you can based on your situation. Can you afford the monthly payment? Is it the right time? Does it impact your ability to save for your future? Does it provide additional value or investment in your future that will increase your lifetime earning power? You can weigh your options and make a good decision.
Some in the marketplace advocate zero debt, like Dave Ramsey, who has a nationally syndicated radio show. Zero debt may not be practical, because there are seasons of life when incurring debt can actually be beneficial.
Healthcare providers have high income earning potential, much higher than the national average. As such, you have optionality to consider borrowing money strategically. Achieving the golden mean between zero debt and too much debt will be a combination of your own temperament and financial acumen.
LIFE HAPPENS…
But what about when life happens? Your child gets sick and medical bills pile up. Covid temporarily causes a drop in your income and debts start to grow or become difficult to meet each month? You find yourself in the middle of a divorce. Or maybe you made some poor decisions about credit, and those credit card balances have become unbearable?
Life happens to everyone.
When you find yourself with debt that you can’t afford and it’s getting higher by the day with late fees and interest rate increases, all while your credit score is going down, what do you do?
Credit Repair Companies
Many consider Credit Repair Companies (CRCs). Credit Repair sounds like a great option, doesn’t it? All you want is the “freedom” that they offer. You just need a break and the idea of having someone else help figure this out with you sounds like a really good idea, right?
Well…it’s not, especially if you are in fight of flight mode. That said there may be 1 in 100 time when this is the right solution. There are things you should know before you jump in.
WHAT YOU NEED TO KNOW…
Credit Repair is not a quick fix.
It took time to get into debt, so it will take time to get out of debt – even with CRCs. These companies often require you to deposit money into an account they manage for 36 months or more. This takes both money and an added time commitment and sometimes becomes more of a burden than the debt itself. Many people drop out of these programs before completion with little to no results to show. When you drop out any of the benefits from the program like interest rate reductions or payment concessions will end with the program. Plus, any fees that you paid will be lost. Furthermore, you must consider the consequences of the significant drop in your FICO score and your ability to most effectively manage credit and borrowing into the future
It might not work.
Your creditor is under no obligation to negotiate with the credit repair company. This means that you are setting aside money for debts that won’t be settled with the CRC. Not only that, but these companies also often work on your smaller debts first so the results are small or slow. The larger debts often keep growing during this process.
It could make your credit worse.
It is a common practice for a debt repair company to advise you to stop paying your monthly payments so that the creditors are more willing to negotiate. During this time, each delinquency is reported to your credit report. Yes, eventually, the creditor may work with the CRC; however, the damage is already done. Additionally, if a settlement for less than the balance is negotiated on your behalf, that information is recorded on your credit report as well. This information can remain on your credit report for up to seven years. This will make it more difficult to obtain credit in the future, or if you can get credit, you will pay significantly higher interest rates.
It costs money.
There are often monthly fees associated with the account the credit repair company sets up for your deposits, and the company gets a percentage of the paid balances as payment for their services. There are also monthly fees to the CRC that are often $100 or more. Plus, any savings that you receive by reducing your balance owed is considered income. You have to include this on your tax return. This is extra cash you just may not have.
Some CRCs Are Scams
Upfront fees are the first sign that the company could be a scam. Beware if the company tells you not to contact creditors or credit bureaus directly. Some CRC’s that promise completely new credit use methods that are illegal. Unscrupulous CRCs fraudulently dispute ALL negative information regardless of the accuracy of the information.
THE BOTTOM LINE
The bottom line is that your creditors rightfully want to be paid. In most cases, they will work with you as long as you show the willingness and commitment to pay them. And, really, you can do what CRCs can do. You can call your creditors and ask them to work with you. Explain your situation and they will establish a payment plan that will work with your budget and give you some relief.
But that can be difficult, too. Most have so many creditors that it would be a full-time job for a season to call them all and work out new plans, not to mention the time it will take to manage the ongoing payments.
So, you may be wondering if there is any real solution at all?
The ANSWER is a definite YES!
A Debt Consolidation Loan
A Debt Consolidation loan can allow you to pay all your creditors, creating real relief for you. Here is what debt consolidation loans can do.
- One payment. Less time and stress devoted to managing several payments each month.
- Better rates. Rates much lower than credit cards and personal loans.
- Lower payments. It’s like getting a raise. One lower payment rather than multiple payments.
- More savings. Put the virtual raise to work by saving it.
- Improve your credit. Eliminate late fees, reduce credit card utilization and watch your credit score go up.
- Faster debt payoff. Know exactly when your debt will be gone.
Hippo Lending is here to serve you and help you protect your financial future. A Debt Consolidation Loan is one of the best ways to instantly give yourself a raise. It involves taking out a new lower-interest loan to pay off all of your high-interest debt. In one move, you can save yourself thousands of dollars in interest payments and eliminate the stress of multiple payments by consolidating them all into one payment each month.
This sounds great…but what does Hippo Lending’s process actually look like from start to finish?
How It Works
We know that you’re incredibly busy and don’t have time to fill out dozens of forms. This works out perfectly for us because we also don’t have the time to read through them. And we’re saving trees by cutting out the paperwork entirely. Instead, we let you apply online through a process that takes as little as 15 minutes.
Hippo Lending offers loans to healthcare professionals to consolidate their debt with payment terms of 3-12 years, as well as competitive rates.
We’ve gone above and beyond to simplify the lending process for the doctors and nurses who serve our community, especially during times like the pandemic. The entire process can be broken down into just four steps:
- Customize your loan so that the loan amount, payment terms, and length all fit your budget.
- Provide us basic information.
- Get approved in just a few days
- Access your funds in as little as one week.
Getting Started
There’s never been a better time to consolidate debt. At Hippo Lending, we’re excited to provide healthcare professional loans that help remove the roadblocks that have been holding you back. We promise to do the best that we can to help you turn your dream into reality. Always remember, you’re just a few clicks away from a completely different borrowing experience and a bright future!
Get started and Apply Today. Your dedicated loan advocate will get in touch quickly and walk you through the process all the way to approval.
What should you do after consolidating your debt?
- Never overuse debt again and when you have, to use it wisely.
- Avoid the trap of instant gratification. Debt should be used primarily to satisfy needs, not wants.
- Live within your means, rather than always keeping up with the Joneses.
