Debt Consolidation: Memphis Residents Have Options Available

Mention ‘Home of the Blues’ or the ‘Birthplace of Rock ‘n Roll’ and many people would know you’re talking about Memphis, Tennessee. Home to famous musicians B.B. King, Aretha Franklin, Al Green, and more recently, Justin Timberlake, Memphis has soulful rhythms, tasty riffs and goosebump-inducing choruses rooted in its DNA.

In fact, the first commercially successful blues song — “St. Louis Blues” — was written in 1912 by W.C. Handy on Memphis’ still-current epicenter, Beale St. If all that wasn’t enough, Elvis lived in Memphis for over 20 years at his Graceland estate, where he rests to this day. But if you wanted something less common to remember Memphis by, the city was initially named after Memphis, Egypt.

The city in western Tennessee along the Mississippi River and Arkansas border is the second-most populous city in Tennessee with over 652,000 people. But with a median household income of $38,826 (nearly $10,000 lower than the TN state average), $857 median gross rent and population loss over the last decade — the 25th biggest city in the U.S. is at the intersection of boom or bust.

Debt Solutions for Every Situation

Nothing positive comes with debt, except for the feeling you’ll have when you get out of it. One of these solutions could be your way out.

Managing Debt

Debt management plans (DMPs), sometimes referred to as credit counseling agencies, help debtors manage their repayments. Instead of making your various payments, you’ll pay the agency, who’ll then distribute your money among your creditors. This saves the stress of deciding how much to pay on each balance. In addition to having the peace of mind that you’re on track to eventually pay back your debt, these companies will provide personal financial education as part of their program. Many DMPs and credit counseling agencies charge a nominal fee for their service, but you may be able to find a non-profit program with research.

Consolidating Debt

When your varying debt balances surpass the point of minor, but your credit score is still OK, it’s essential to consolidate debt. This is because Memphis debt consolidation strategies require securing new lines of credit. Whether you opt for an unsecured personal loan, a balance transfer or leverage equity in your home, the terms will be more favorable the higher your credit score. Here’s a breakdown of each of these options.

  • Balance Transfer

A quick way to relieve the stress caused by juggling various balances is to move them all to one credit card with an introductory zero- or low-interest period. This allows to attack the principal balance aggressively and make faster progress However, keep in mind that balance transfers carry a three-to-five percent fee, so do the math to ensure the interest-friendly period will outweigh the transfer cost.

  • Personal Loan

Another way to consolidate various high-interest balances is to get a personal loan with a different institution. You can use this loan to immediately pay off all your credit card balances and focus on making one monthly payment. Be sure to shop around, though. Unsecured personal loan interest rates range from four to 36%!

  • Home Equity Loan/ Cash-Out Refinance

Having a solid chunk of equity in your home is a beautiful thing, especially if high-interest debt has you on the ropes. A home equity loan involves taking out a second mortgage on your home, often at a fixed rate, for up to 30 years.

In turn, you can use your cash equity to cover your balances. A cash-out refinance differs in that it pays off your first mortgage, opening a new, larger mortgage with entirely new terms. Cash-out refinances usually come with closing costs and fees. If you can negotiate favorable new terms (interest rates and repayment schedule) and have enough equity to wipe out your credit loans, paying the fees might make financial sense.

Settling Debt

Even if your credit score is shot, you still have debt-assistance options. Commonly referred to as debt relief or debt settlement, this strategy entails foregoing monthly payments to creditors to have enough to make a lump-sum offer eventually. The effort is helped by a debt settlement company, who negotiates with creditors on a debtor’s behalf.

debt relief program

Debt settlement companies charge a fee if you agree to pay a sum they’ve reduced, and the process can take anywhere from two-to-four years. However, letting a company shoulder the emotional burden you’ve been dealing with is arguably worth the fee in itself. Debt settlement isn’t kind to credit scores, but the effect is mostly muted because most debtors already have damaged credit scores for debt settlement to be a viable option.

Resolving Debt in Memphis

Despite population loss and high crime over the last decade, there is a lot that Memphians have to be optimistic about. While Memphis’ median rent ($857) is steep compared to its median household income ($38,826), there’s value in buying a home, with median home prices at $96,800. However, when high-interest credit debt hangs in the balance, it’s difficult making regular payments let alone saving enough for a down payment.

But Memphis isn’t going anywhere. Memphis International Airport serves as the global air hub to FedEx, and unsurprisingly, is the city’s largest employer. Its prime location along the banks of the Mississippi make it an essential cargo port. Throw in the five major freight railroads and two interstates (with a third in progress) that directly intersect town, and Memphis’ position as a prime transport area is only growing.

But how will you build your life here if you never get out of debt? Learn more about the solutions that Freedom Debt Relief provides. Or give us a call at 800-910-0065 so we can learn more about your situation and the best path forward.