Memphis Associates personal finance and debt consolidation offers are bait and switch. Memphis Associates has begun flooding the market with debt consolidation and credit card relief offers in the mail with the website mymemphisassociates.com. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect.
The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2020 Reviews, the personal finance review site, has been following Memphis Associates, Tate Advisors, Plymouth Associates, Credit 9, Americor Funding, Safe Path Advisors, Silvertail Associates, etc.).
Best 2020 Reviews closely monitors personal loan offers, debt reduction, and credit card consolidation offers sent through direct mail to consumers.
Many Americans are using debt consolidation to make their high level debts easier to handle. This practice usually involves taking out a consolidation loan through a lender and using it to pay off multiple debts, thereby consolidating them into one that is more manageable. This strategy leaves you with only one debt payment to make each month.
Debtors who are interested in debt consolidation can choose between taking out either a secured or an unsecured consolidation loan.
Secured loans are offered at relatively low interest rates, but they require you to put up some form of collateral, such as a home or a car to qualify. If you fail to pay back the loan in time, you may end up forfeiting your collateral.
You can apply for an unsecured loan without having to put up any collateral, but they are generally offered at higher interest rates than secured loans.
If the aforementioned strategies do not appeal to you, you can try one of these other debt consolidation methods:
- Paying off your debts yourself
- Applying for a debt consolidation loan
- Using a balance transfer card
- Using debt settlement
Paying off Your Debts Yourself
Eliminating your debts by paying them down one by one can feel challenging, but it can be done by following the right strategy.
Debt Stacking
In the debt stacking method, debtors try to get credit card relief by paying off the highest interest rate first, while also keeping up with the minimum payments for their other credit cards.
Paying off your highest-interest card may not be easy, especially if it has a large balance that will take time to pay off. However, this strategy could help you save money in the long run.
Debt Snowball
The debt snowball method is useful for people who want to reduce the number of debts they owe as quickly as possible. In this method, debtors pay off the credit card with the smallest balance, before moving onto the card with the second-lowest balance, and so forth.
This method can be preferable to debt consolidation as it enables you to pay off your debt without taking out an additional loan.
Applying for a Debt Consolidation Loan
If you are unable to pay off your debts using the aforementioned strategies, you should consider debt consolidation using a loan.
There are many different loans that could be suitable for this purpose. Homeowners with equity can apply for a home equity loan, or they could apply for a homeowner equity line of credit (HELOC). Once you have received your loan, you can use it to pay off your existing debts.
This strategy is useful for paying off multiple credit card debts with interest rates, and replacing it with a single low-interest debt. Debt consolidation reduces your interest rate and debt burden by making you responsible for only one payment per month.
If you are not eligible for a home equity loan or HELOC, you can apply for a personal loan or an unsecured loan.
Debt Consolidation Loans and Credit Scores
Your credit score may impact your eligibility for certain consolidation loans. If you apply for a $35,000 loan, and have a very good credit score ranging between 740 and 799, you may be offered the loan at an interest rate as low as 10.99%.
If you apply for a $25,000 loan with a lower credit score, say within the 670 to 739 range, you may be offered it at a 13.99% interest rate.
However, if your credit score is below 660, you may have difficulty securing a loan. Any loans you are eligible for may come with an origination fee between 1% and 5%. You can also expect to pay interest rates as high as 35.99% on these loans.
Using a Balance Transfer Card
If you are struggling with debts from multiple high-interest credit cards, you may be able to relieve your burden by transferring your balances to a card with a better interest rate. You can also do this with the help of a 0% interest balance transfer card.
The 0% interest rate on these cards is applicable for a limited period of time, usually 6 to 18 months. If you can pay off your interest before the promotional period ends, you will end up saving on interest charges.
However, if you can’t pay off the debt within that time period, you will be charged interest on your remaining balance. The interest rates on these cards can be very high once the promotional period ends, so this debt consolidation option should only be considered if you are able to pay off your balance in time.
Using Debt Settlement
If you are unable to pay off your debts using debt consolidation, you should consider debt settlement. This strategy can reduce the debt amount you end up paying, but it should be used only as a last resort.
It involves contacting your creditors and offering to pay a lump sum amount that is lower than your current debt amount. You can also do this with the help of a debt settlement agency.
If you choose this route, you will need to stop making debt payments to your creditor for several months, and then wait for the debt settlement company to begin negotiating on your behalf.
If both parties reach an agreement, your debt will be forgiven after paying less than the full debt amount. However, this method has some disadvantages compared to debt consolidation. Once you stop making payments to your creditor, they may take legal action against you. This could leave you in a worse financial position than before.
In addition to this, using debt settlement counts as a modification to your original contract. As a result, this route will end up damaging your credit score. However, your credit score may also be harmed if you are unable to pay back your debt. So you should weigh up the pros and cons of this method before choosing it.
Which Debt Consolidation Method Is Right for Me?
Each of the aforementioned methods offers unique advantages and drawbacks. The right method for you will depend on factors such as your credit score, available income, and the number of debts you owe.
