Will debt management stop my interest building up?

It is possible that using a credit debt management plan could help to stop your interest from building up. By having a  debt management program your creditors may forgo interest payments as long as you keep make your payments to your creditors on time every month.

When you enter a credit debt management plan, your creditors will be asked to accept lower monthly payments towards your unsecured debts. Settling your credit debts less quickly does mean it’ll take longer to repay them and can end up costing you more (due to interest), but it also means you should be able to stay on top of your finances, since your credit debt repayments would be based on how much you can afford per month, rather than what you thought you could afford when you took on the debts in the first place.

Will debt management stop my interest building up?

Your lenders will also be asked if they’ll waive charges and either reduce or freeze the interest they’re charging on what you owe. They’re not obliged to agree to this, but maybe there’s a chance they will if they can see that it’ll help you pay off your balance at a lower rate.

And remember: debt management companies aren’t the only ones who can negotiate with lenders. In fact, you may be able to get them to accept lower payments, freeze interest andforgo charges if you call them directly and speak to them yourself. For more on this, click here.

Even so, there are various reasons people choose to go to a professional debt management company. For example:

. They’ll know what makes a realistic repayment plan. A debt management company will be able to help you work out exactly how much you receive in a month, how much of that you spend to live on, and how much you can actually afford to pay towards your debts. They’ll help you make sure you’re offering your lenders as much as you can to repay, without committing yourself to paying more than you can manage to repay per month.

· They’ll know what creditors are likely to accept. They will have experience of helping people with credit debt problems. So they’ll have dealt with lenders on several occasions – they’ll know whether lenders are likely to think an offer represents a reasonable way of helping you repay your outstanding debts.

· They’ll have the time to concentrate on your credit debt problems. Most people have so much going on in their lives that it’s hard to find the time to deal with multiple lenders – possibly on multiple occasions. Credit debt management professionals do this for a living. They’ll be able to spend the necessary time corresponding with your creditors.

In other words, a professional credit debt management company should have the skills (and the time) it takes to negotiate agreements that will help you get your finances under control – and that your creditors can agree to.

Please note that a debt management plan would only be an option if you can’t keep up with your repayments as they are at present. Plus, changing the way you’re repaying your debts will show up on your credit report for 6 years and can affect the cost and availability of credit for that time.

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