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Debt is often stressful. After all, life comes with plenty of expenses. And when you use credit to address those expenses, they typically become larger as a result of interest and finance charges. If left unchecked, growing debt can lead to financial hardship. That’s especially true in today’s economic environment, in which high interest rates have become the norm.
But, you don’t have to deal with mounting debt forever. Debt relief services may be able to help by negotiating better interest rates or even lower principal balances with your lenders on your behalf. Not only could these services reduce the time it takes you to pay off your debt and save you money in the long run, they may be able to reduce your minimum payment obligations.
And now is a great time to get started. With prices rising and elevated interest rates making debts more expensive, a debt relief service may be able to help you find financial stability in today’s inflationary environment.
Find out how much relief a debt relief service can provide now.
Why now is a great time to consider debt relief
Some major reasons why now is a great time to consider debt relief are as follows.
Inflation is still elevated
Inflation reports came in hot for the first three months of 2024. And that means prices are rising fast. Whether you’re buying food or gas, or even paying rent, chances are that the amount of money you need to cover your expenses today is quite a bit higher than the amount of money you needed to cover them a few years ago.
That can make debt more difficult to deal with.
After all, higher prices for housing and consumer goods and services leave less money in your budget for addressing your debts. But, a debt relief service may be able to help cut the cost of your debts – making it easier for you to absorb higher costs elsewhere.
Get in touch with a debt relief expert to make your debts more affordable now.
Interest rate hikes have caused borrowing to become more expensive
Following the height of the pandemic, the Federal Reserve increased its federal funds rate target several times, pushing it to a 23-year high. And that high benchmark rate still stands today. That’s important as the federal funds rate target is often used as a benchmark for consumer interest rates.
As a result, the interest rates on your debts may be higher today than they were just a couple of years ago. That also means you may bedealing with higher minimum payments.
The good news is that a debt relief service may be able to negotiate better interest rates and payment terms on your behalf, bringing the cost of your debt down.
The future of inflation and interest rate cuts is unknown
Late last year, many signs were pointing to rate cuts in 2024. But, with recent inflation reports coming in hotter than expected, the prospect of a rate cut in 2024 is becoming unclear. In fact, if inflation continues on an upward trajectory, rates could increase – driving the cost of debt even higher.
“During higher inflationary times, interest rates usually adjust and that likely means your interest rate is going to go up,” explains Dawn-Marie Joseph, founder of the financial planning firm, Estate Planning & Preservation. “In some cases, this may cause your debt to cost more.” That’s especially true in the case of unsecured debts with variable interest rates like credit cards.
But debt relief may be able to help. “When you get a debt relief program, your interest rate is usually set at the time you start the program,” says Joseph. “This could end up saving you quite a bit of money in the long run, especially if interest rates go up.”
You may have back taxes to deal with, too
The April 15 tax deadline recently passed, and with its passing comes a new financial concern for many. That concern is tax debt. If you have tax debt to deal with on top of your personal debt, juggling the two can be challenging. So, it may be wise to reach out to a debt relief service to ease the financial burden your debts cause as soon as possible.
It’s worth noting that tax relief providers can help you with tax debt while traditional debt relief services can help you with credit card and other personal debts. So, it may be worthwhile to seek relief from both.
The bottom line
As inflation continues to send prices for everything from gas to food to rent higher, personal debts are becoming more difficult to deal with for many. And, with no clear signs of rate reductions in the near future, today’s economic environment can be concerning for borrowers. That’s especially true if you recently found out you have tax debt to deal with on top of your personal debts. The good news is that debt relief services can help. Reach out to one now to find out how much relief they can provide.
Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he’s not working, he enjoys time with his wife, two kids and two dogs.
