One would think with so many government programs for low-income households, low interest debt consolidation loans would be among them.
Unfortunately, this is not the case. However, there are some government sponsored alternatives and plenty of other options to pursue regarding your debt problems.
If someone is overwhelmed with debt and they find they have no alternative but to charge off the debt, they can apply for a DRO, or a debt relief order.
This petition is filed with the government and protects the debtor from being contacted by any of their creditors. This lasts for a period of one year, at which time a decision is made as to whether the debt is charged off or not.
In essence, it is a bankruptcy without the legal fees.
When the debt can still be overcome, the debtor may be able to obtain a debt consolidation loan through outlets such as credit unions and non-traditional lenders.
Today, there are companies set up specifically for this type of lending. Interest rates may be higher through these outlets, but they are more likely to actually approve the loan and will be much lower than high interest credit cards.
Another alternative would be to get a cosigner for a loan. Some friends and family members are more than happy to help out a close relative in need, but this is a route only recommended if you are sure you can pay back the debt in full when each payment is due.
Remember, cosigners are just as responsible as the main signer for the debt. Any negative marks will appear on both credit reports.
The government may not have low interest debt consolidation loans, but there are programs set up to help individuals who are in debt.
If using a DRO is not an option, there are still loan possibilities that will enable you to consolidate your debt and get out from under that black cloud.
Investigate all options available, and then choose the one that suits your particular situation the best.
