Just a short 98-mile jaunt south from Washington D.C. brings one to Richmond — Virginia’s capital city of 233,170 has maintained a steady economy dating all the way back to Colonial times.
In fact, Patrick Henry famously declared, “Give me Liberty or Give me Death” at St. John’s Church in 1775, 13 years after Richmond was first incorporated. The city officially became independent in 1871.
By the start of the 20th century, the city operated one of the world’s first successful electric streetcar systems. And its prime positioning on the James River, only triple railroad crossing in North America, and intersection of two major interstates—I-64 and I-95—helped solidify it as a vital hub of commerce.
Today, the city has a modest 94.8 cost of living compared to the U.S. average of 100. However, the city’s median household income of $42,373 is considerably lower than the $68,114 state median, and its median gross rent of $942 is steep.
With these stats in mind, it’s clear that many Richmonders might be struggling to get by—particularly if they’re also dealing with high-interest debt.
Trying to make ends meet with high-interest debt only yields frustration. Learn about actual debt relief options below.
Which Debt Solution Is Right for You?
Debt not only creeps into our every financial thought, it also infiltrates our overall psyche — contributing to anxiety, confusion, fear and a host of other unwanted emotions. Simply taking action can mean all the difference for your overall emotional state.
Debt management plans (DMPs), offered by credit counseling agencies, manage a debtor’s repayments. Instead of paying various lenders, one monthly payment is made to the debt management program, which as part of their service, distributes it among your creditors in the most principal-friendly way. DMPs won’t save any money, (in fact, many DMPs charge a nominal monthly fee). However they do provide emotional relief by handling the repayment process for debtors. They also offer financial education courses to improve future behavior.
If you’re having difficulty making headway on the collective principal of your high-interest balances, Richmond debt consolidation strategies can work in your favor—but you’ll probably need decent credit to take advantage of them.
Balance transfers allow debtors to move their various credit balances onto one card with one interest rate. Balance transfers offer low- or zero-interest introductory periods, usually ranging from six-to-18 months. This allows a debtor to pay back their principal faster. Though, these cards do charge a three-to-five percent fee of your overall transfer balance, so be sure the math makes sense for your situation.
Another way of consolidating your debt in Richmond is to take out a personal loan for the amount of your high-interest balances. In one swoop, you can net yourself a lower overall interest rate and reduce your monthly payments to one. Interest rates on personal loans can range from four to 36 percent. Like balance transfers, make sure a personal loan helps you do more than move the same debt elsewhere.
Home Equity/Cash-Out Refi
Though Richmond’s median home value was $211,400 in 2016, lower than the state median of $264,000, Richmonders who’ve made progress on their mortgage can eliminate their high-interest debts.
A home equity loan adds a second mortgage with a new fixed interest rate and loan length. A cash-out refinance replaces your existing mortgage with entirely new terms. These deals come with closing costs and fees, but can make sense depending on your new terms.
All of these strategies can free up immediate cash so you can pay off your high-interest debts. But they’ll only be as effective as what’s left of your credit score. Which brings us to our next option.
When the Richmond debt consolidation options above aren’t available to you because of credit score, lapsed payments or too high of balances, your main choice becomes bankruptcy or debt settlement. Bankruptcy carries attorney fees, court costs and mandatory financial education courses (that cost money) while debt settlement costs money.
The debt settlement process involves a debtor halting payments to their lender and instead saving them in a separate account. Meanwhile, the debt settlement company negotiates with the creditor for the debt to be resolved at a lower amount. The debtor pays a percentage fee based on the amount of debt the company is able to resolve.
Request a free debt evaluation to find out how we could help you:
- Resolve your debt faster
- Significantly reduce what you owe
- Make one low monthly program payment
Resolving Richmond Debt
With four of the largest law firms in the U.S. operating in Richmond, eight Fortune 500 companies and a strong federal, state and local government base, Richmond, Virginia has a solid base to invite more economic activity in the future. A low cost of living — especially in contrast to eastern U.S. cities — and assortment of companies offering long-term job security gives Richmond all the makings of a city to call home.
But no place feels like home when debt holds a permanent position in our thought patterns. If your debt is beyond your control, you need to take action.