Are you looking for a way out of credit card or student loan debt? You’re not alone. As of the second quarter of 2023, Americans have collectively reached $1.031 trillion in credit card debt according to LendingTree.
That number may be hard to fathom, but there are options that can help people move in the right direction. Whether you choose a government program or private lenders, there’s a solution waiting for you. Let’s look at the options together so you can make an informed decision.
Your Friend, The Federal Government
Surprising, right? When we think of the government, our minds often drift to taxes, regulations and red tape. However, our government has various programs and initiatives to assist those in need.
Debt has become a concern for many Americans. It’s not just about the financial strain—it’s also about the stress and constant worry of making ends meet. Recognizing this, the federal government has stepped up, offering ways to help manage this burden.
Federal Grants
Every year, the U.S. government sets aside significant amounts of money for grants. These grants support different initiatives, from research and development to community programs. They can even provide personal financial relief in some cases. A good starting point to learn more about these grants is Grants.gov.
Federal Loans
The government offers two primary debt consolidation loans which are often used for student debt. However, some of these loans can also help with credit card debt—the Federal Family Education Loan (FFEL) is one such loan. For a deeper dive into the FFEL, take look at this comprehensive guide called What to Know About FFEL Loans.
Private Lenders: The Other Side of the Coin
Private lenders, like banks and credit unions, bring their own set of advantages to the table. They operate independently of the government, so they have the flexibility to design loan products that meet the demands of specific markets—meaning a wider variety of loan options, competitive interest rates and sometimes perks like cash back or reward points.
Banks
These are the big players in the lending world. With their vast resources, banks can offer a full menu of loan products, from personal loans to home equity lines of credit.
Credit Unions
Credit unions are member-owned, which means they often prioritize the needs of their members over profits.
Online Lenders
The digital age has given rise to a new breed of lenders that operate primarily online. These lenders use technology to offer quick loan approvals and payouts.
Regardless of the type of private lender you choose, it’s important to shop around. Compare interest rates, fees, terms and customer reviews. Taking a loan is a significant commitment and you’ll want to be sure you’re partnering with a lender that understands your needs and offers terms that align with your financial situation.
Remember, you’re not alone in this journey. Whether you lean on government programs or private lenders, there’s hope. Consult an expert, weigh your options and choose the path that works best for you.
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