We are all surrounded with various types of debts and the market s designed in such a way that you will be bound to apply for a loan or a credit card in some way or the other. It can be on the basis of need and in some situations it will be on the basis of mere luxury. Talking about luxury, we take credit cards as a tool to show off as luxury and never miss any opportunity to get it out and flaunt it in front of our friends.
You happen to own a credit card from a reputed brand and you take your credit card to make all the payments when you are with your family and friends. Slowly and gradually you realize that the limit is shrinking day by day and at last you have maxed out your credit card. It is really hard for you make the card payment and are finding options to get it closed. You apply for a small loan to pay off your credit card debt and realize that the bank has rejected your loan. You get your free cibil report and learn that due to default payments, your cibil score has took a hit and you cannot apply for a loan.
Harassment calls starts pouring in and you tend to receive two to three calls on a daily basis asking you make the payment or they will take any legal action. Suddenly you get a call from another agency and this time they sound different. They give you an option to settle you debt and now you are in the fix if you should take this option because this is the first time you are listening to such a call and if this will help you in the long run.
What is a debt settlement anyways?
When you have completely utilized your credit limit and have not made any payment from a good amount of time. The car lender offers you an option to settle your card debt for less money. It is a loss for the lender, but they settle with a less amount. This is a great option for the borrower if they are completely bankrupt and do not have adequate funds to make the payment.
The main question here lies, if debt settlement is a great offer for you or is it some kind of a trap?
We are here to answer your questions in regards to debt settlement and how it works,
Is this a good option though?
This option has two sides just like any other coin or situation. On one side, you can be debt free and start fresh with paying less than what you owed the lender. It can be a big relief for you knowing that you won’t be having any collection calls made to you in regards to payment. On the other hand, you will be taking a hit for a long time in your cibil report. If you opt to settle an account, you will have the account reflected as settled on your credit report. A settle status towards any account on the credit report is like a night mare to your future lenders if you are planning to get a loan or credit cards. A settled status remains on your report for a very long time and in some cases it can remain on the report permanently.
Temporary benefits can dig huge problem holes in long run.
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