Find the Best Debt Consolidation in Missoula, MT

The need for debt relief in Missoula

According to the Federal Reserve, the household debt-to-income ratio in Missoula in 2018 was 1.619, meaning the average consumer in Missoula owes significantly more each month than he or she earns. Across the country, the total household debt is close to $14 trillion and has been rising for five consecutive years as of mid-2019.

If you are a Missoula resident who’s receiving letters from creditors, having trouble making monthly payments or getting accounts turned over to debt collectors, there are steps you can take to improve your financial situation. These debt relief measures include debt consolidation, debt settlement and alternatives such as credit counseling.

Debt consolidation in Missoula

A debt consolidation loan rolls multiple unsecured debts, such as credit card balances or personal loans, into a single loan. With a debt consolidation loan, you make a manageable monthly payment to a debt consolidation company and don’t have to worry about remembering various creditors, amounts and due dates. These loans frequently also have better interest rates and longer repayment terms.

Not all debtors qualify for a debt consolidation loan in Missoula. You’ll need to have a good enough credit score (generally 630 or higher), be current on your payments and have unsecured debt not in excess of $50,000. You also need consistent cash flow to cover your monthly payments.

Recognize that, if you do get a debt consolidation loan in Missoula, you still owe the full amount of your original debt, and you will be paying off your loan over an extended term. Though your credit score may take a short-term hit, it won’t be negatively affected over the long term — as long as you make your debt consolidation loan payments on time and don’t default.

Debt settlement in Missoula

Debt settlement is the process of negotiating with creditors to lower the total amount of debt you owe. It is most helpful if you have a large amount of unsecured debt, are behind on your balance and can’t make more than minimum payments.

When you hire a debt settlement company in Missoula, the company’s staff contact your creditors and negotiate with them to decrease your debt and pay off the reduced amount with a lump sum. These negotiations usually take two to four years, but, during this time, you make monthly payments to an escrow account. Eventually, this account becomes the lump sum you use to pay off your debt.

Debt settlement in Missoula can help lower many types of unsecured debt, including:

• Credit cards
• Personal loans
• Medical bills
• Utility bills
• Apartment leases

The downside is that debt settlement companies charge 15% - 25% of the negotiated settlement. Keep in mind that debt settlement can also negatively affect your credit for up to seven years, making it difficult for you to get a loan over that period. Although it’s significant, this hit to your credit is not as severe as bankruptcy.

Debt relief alternatives in Missoula

In addition to debt consolidation loans and debt settlement, Missoula residents can use credit counseling to get personalized advice on managing money and debt and putting together a budget. Credit counseling organizations offer free educational resources and workshops from trained professionals.

Credit counseling companies may recommend you join a debt management plan where you deposit money to the company, which then pays creditors according to an agreed-upon payment plan. Creditors may waive fees or lower your interest rates as part of a debt management plan, which can take up to 48 months to complete.

The Montana Department of Justice recommends anyone struggling with debt meet with a credit counselor, and the Federal Trade Commission has tips for choosing a credit counselor.