Debt Consolidation Help for San Diego Residents

Key takeaways:

• Because San Diego has some of the highest housing costs in the nation, rising prices and interest rates might make it particularly difficult to make ends meet.

• Debt consolidation is an approach that might make your debt payments easier to manage and afford.

• Local banks and credit unions, along with national lenders and credit card companies, give you plenty of options for finding a debt consolidation loan that can help.

San Diego is known for its sunny and moderate climate, but living in such a beautiful part of the country comes at a price. Southern California is an expensive place to live, and that can make rising costs pinch especially hard.

Debt consolidation might be the right way for some San Diegans to get some breathing room in their budgets. It can make tough household finance choices a little easier.

Today’s consumers are faced with a financial dilemma. Inflation has driven consumer debt to an all-time high. Yet while rising prices are forcing more borrowing, higher interest rates are making borrowing more expensive. So what’s a person to do?

Debt consolidation may solve part of the problem. By reducing borrowing costs, it can leave a little more room in your budget to buy the things you need. In particular, if you’re carrying high-cost debt like a credit card balance, debt consolidation is worth checking out.

Inflation and higher interest rates are national issues, but the need to deal with them is especially urgent in San Diego. According to Census Bureau data, both rental and home ownership costs in San Diego are among the ten highest in the United States. 

High housing costs leave San Diego residents with less wiggle room in their budgets. Debt consolidation might be the way to find that extra room.

What is debt consolidation?

Debt consolidation is a way of replacing multiple smaller debts with a single loan. 

You can do this by borrowing from a new source to pay off existing debts. Debt consolidation works especially well as a way of dealing with high-interest credit card debt, but it can also be used to replace other loans.

How can you borrow money to pay off your existing debts? There are a variety of possible sources for debt consolidation funds:

• Secured personal loans

• Unsecured personal loans

• Home equity loans

• Balance-transfer credit cards

How you borrow for debt consolidation, as well as the kinds of debt you replace, depends on what goals you’re trying to accomplish. 

How can debt consolidation help?

Debt consolidation can make your debt more manageable in a variety of ways. It should do more than simply trade one type of debt for another. Debt consolidation should also improve your payment terms.

Here are some of the ways debt consolidation might make your payments easier to handle:

• By combining multiple debts into one, debt consolidation can reduce the number of monthly payments you need to keep track of

• If you can exchange high-interest debt for lower-interest debt, debt consolidation can reduce the interest cost of your debt

• Taking out a new loan with a longer repayment period can reduce the size of your monthly payments

Debt consolidation works especially well when you can use it to lower the interest rates you are currently paying. A good opportunity to do this is by paying off credit card debt, since that is generally more expensive than loan debt. 

Sometimes, you have to pick one goal over another. For example, taking out a loan that gives you more time to repay than your current debt can lower your monthly payment. However, it  may cost you more interest over the life of the loan.

If you’re struggling to meet your current monthly payments, that extra long-term cost may be necessary. This kind of trade-off means that the first step in debt consolidation should be to decide what your goals are. That'll help you choose the best approach for your needs. 

In many cases, you may find you can accomplish more than one goal with debt consolidation. At the very least, combining multiple debts into one should make your debt easier to manage. Lowering your interest rates or stretching payments out over a longer time may also make your payments more affordable. 

Debt consolidation loans in San Diego

Choosing the right loan to meet your debt consolidation goals is critical. Fortunately, San Diego residents have plenty of options. 

Locally, you’ll find more than 40 FDIC-insured banks doing business in the San Diego area. There are also about 10 credit unions nearby. 

In addition to lenders with a local presence, there are several national banks, credit card companies, and non-bank lenders available to you online. 

Make the most of the choices you have. Shop around to find out which lender has the best terms for the type of debt consolidation loan you need.

Alternatives to debt consolidation

Debt consolidation can be a powerful tool, but it’s not the right solution for every situation. 

If you’re struggling with debt and it doesn’t seem like debt consolidation will solve your problems, there are other possibilities to consider.

Credit counseling

Credit counseling involves getting personalized help from someone with specialized training. The process involves examining the details of your financial situation to come up with a plan. This is likely to include looking at the details of all your debts, along with your income and assets.

Though credit counseling organizations are generally run on a not-for-profit basis, they often charge a fee to offset their costs.

It’s wise to research the background of any credit counselor you’re thinking of working with. Start by looking for an NFCC-accredited agency in your area.

Debt relief

Debt relief in this context refers to negotiating with your creditors to get more favorable payment terms.

Debt relief may involve convincing a lender to lower your interest rate, give you more time to repay, or even reduce the amount you owe. This last approach is likely to be reflected on your credit report. 

You can try negotiating with your creditors directly, or use a professional debt relief firm such as Freedom Debt Relief to deal with them for you. 

Bankruptcy

Bankruptcy gives you legal protection from your creditors. This entails letting a court decide how to use your assets and income to settle your debts. 

If you have disposable income after necessary expenses, you’ll be put on a 3 to 5 year payment plan to get out of debt. If you don’t, you might qualify to have your debts wiped clean.

Bankruptcy has a negative effect on your credit, like many other debt reduction strategies.  

Getting help with your debt in San Diego

As a major city, San Diego offers a variety of options for finding a debt consolidation loan. You’ll find dozens of banks and credit unions with local offices. In addition to those, there are several national lenders and credit card issuers you can access online. Having lots of choices means you can shop around to find the best terms.

If you look into debt consolidation and it doesn’t seem like it will help you, there are other options to consider. Credit counseling, debt relief, and bankruptcy are other solutions you can explore.

For help figuring all this out, you can talk to a debt consultant at Freedom Debt Relief. Discussing your situation with an expert might help point you in the right direction. You can get a preliminary evaluation at no cost and with no obligation.

How people in California are handling debt stress

American consumers recently reached an all-time high in credit card debt, and people in California have more than their fair share. According to the Federal Reserve Bank of New York, credit card debt in the United States recently reached a record $986 billion. 

This burden is felt heavily in California, where the average credit card balance is higher than the national average. Sometimes, keeping up with all your debt gets to be too much. You fall behind on one payment, then another. Pretty soon, you find yourself racking up late fees and watching your credit score drop. Fortunately, there are steps you can take to get on the path toward owing less and feeling better. 

If you’re struggling with debt, you’re not alone. Plenty of California residents just like you know what it’s like to be overwhelmed by debts and overdue bills. People who started a Freedom Debt Relief program in California last month have 14 open credit accounts on average. That makes for a lot of payments and due dates to keep track of. California has more delinquent debt per person than the national average. 

Running into credit trouble can feel like hitting a wall. You start to reach the limit of your ability to borrow. Nearly a third of people in California who joined Freedom Debt Relief last month have already reached 90% or more of their credit card limits. As your existing credit limits become maxed out, it may become harder to get approved for new sources of credit. 

The best way out of a debt trap is to take positive steps. In fact, the sooner you act, the sooner you can be on the road to a solution. 

Freedom Debt Relief can help you get on track toward solving your debt problems. There's no one-size-fits-all solution to financial difficulties, so Freedom Debt Relief will craft a plan based specifically on your situation.

Freedom Debt Relief can help you understand and implement tactics such as making a workable payment plan, getting a debt consolidation loan, or negotiating to have creditors accept less than the full amount you owe. Figuring out the right mix of tactics can be the first step toward solving those nagging debt problems.