Don't Use Retirement Loans for Debt Relief

Credit counseling may claim you can use debt consolidation with little worry or risk if you borrow against your retirement savings. However, our service prevents the need to borrow against retirement savings and even reduces your total credit card debt balance.

You really can borrow a debt consolidation loan against your pension plan, such as a 401(k) or 403(b) plan. In this case, there is no income qualification and the debt consolidation services do not require a credit check.

A debt consolidation loan from one of these pension plans is not the same as a withdrawal, which would often result in a substantial penalty or tax. Instead, the consumer is using this account as security to borrow from the debt consolidation company.

Some credit counselors will recommend this method to repay any type of debt, including credit card debt, car loans or student loans. The unfortunate downside to using this method to repay your high-interest debt is that you are putting your retirement savings at risk. You may forfeit your savings and be forced to pay the penalty and tax if you default on your loan or if you lose your job.

Instead of acquiring a new loan to pay off your old debts, consider using a Credit Solutions plan. You save as much money as you can every month into a settlement account. Then, after saving a percentage of your debt, we work with your creditors to repay only a portion of your debt. It is best to use Credit Solutions to speak with creditors on your behalf. The Credit Solutions representative work for you rather than the creditors and ensure the best deal for you. Instead of paying back the entire balance, you decide on an amount you can reasonably afford and then pay the settled amount.

In the end, our service lets you cancel part of your debt and pay off the rest in a short amount of time. This is extremely helpful as you can deal with your debt without jeopardizing your retirement savings.

You can settle your debts today. Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. He has written about various debt relief topics. Credit Solutions provides an alternative to consolidating your debt.

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