Debt is a burden that can feel like it will never end. But you are not alone. There are options available for debt consolidation in Pennsylvania. Seeking help is the first step to becoming financially independent. With determination and effort, you can break free from the cycle of debt and regain your financial stability.
While debt problems are not unique to Pennsylvania, residents of the state face some challenges that are specific to them. This is evident in their credit utilization percentage of 30.67%, which is higher than the national average and can actually damage your credit score. Also, although the average credit card debt per borrower in Pennsylvania is lower than the national average of $4,965, Pennsylvanians carry some of the highest student loan debt balances in the nation. When it comes to housing, roughly fifteen out of every one hundred homes are valued at less than the remaining balance on their mortgage.
Pennsylvania Credit Card Debt Stats
Here is what the current financial environment looks like in Pennsylvania.
- Average credit card debt per household: $6,065
- Average available credit limit: $15,329
- Credit utilization ratio (debt vs available limit): 30.67%
- The average number of cards: 3.07
- % of accounts that are delinquent (at least 90 days past due): 6.36%
- Average credit score: 687
- Most popular type of credit card: Cash back rewards
Options For Debt Relief In Pennsylvania
There are a few things you can do if you need help paying off your debt. You can consolidate your debt, refinance, use a balance transfer card, or take out a personal loan. These steps may help you get your debt under better control.
Consolidate Your Debt
Doing debt relief in Pennsylvania can be a great way to get your finances in order. By rolling multiple unsecured debts into one loan, you can focus on paying down a single debt each month. This can help you get out of debt faster and improve your financial situation. However, it is important to consider whether refinancing is the best option for you. Depending on the type of debt you have, consolidating your debt may not be the best choice.
An unsecured personal loan is often a good option. You won’t have to put up any collateral with this type of loan, which makes it less risky. However, if you have a low credit score, it may be difficult to qualify for an unsecured loan. This is because lenders view you as a higher risk for repayment.
In Pennsylvania, 28.6 percent of people with personal loans use them for debt consolidation purposes. If you’re considering this option, keep in mind that you may end up paying a higher interest rate on an unsecured loan than you would with a secured loan.
A home equity loan is a type of loan in which you use your home as collateral. This can be a great way to consolidate debt, as it may be easier to qualify for than an unsecured personal loan. However, it is important to remember that if you default on this type of loan, the lender could foreclose on your home. As with any consolidation loan, there are both pros and cons that should be considered before making a decision.
If you have an installment loan, like a personal loan or HEL, it can be easier to budget for monthly payments since the interest rate and term are fixed. This means that your payment will be the exact same amount each month. Additionally, you may be able to save money on late fees, missed-payment penalties, and other consequences that result from struggling with debt management. Furthermore, paying off debts with the financing can potentially add an immediate boost to your credit score.
Debt consolidation is not a magic bullet for solving all your financial problems. It can help you get a lower interest rate and simplify your monthly payments, but it won’t erase poor money habits or make it easier to pay off your debt. If you have a small balance, it may not be worth consolidating your debt.
Home equity loans carry closing costs and personal loans come with origination fees, so if you’re able to pay off your balance in less than a year, by making extra payments, that is a simpler way of tackling smaller debts. If you have a poor credit score, that may keep you from getting approval for a consolidation loan, or another form of credit. And even if you are approved, you may qualify at higher interest rates, which may not save you much money in the long run.
Debt management doesn’t have to be stressful. You have options, like refinancing, that can help you get ahead.
There are a couple of different times when it might make sense for you to refinance your mortgage. One reason you might refinance is if you’re struggling to make your current mortgage payments. Refinancing into a loan with a longer repayment term could help by spreading out your payments and making them smaller.
This would free up more cash flow each month and reduce your monthly mortgage bill, but it’s important to understand that you’d also likely pay more interest over the life of the loan by extending your mortgage.
Another potential reason to refinance is if your credit has improved since you originally got your mortgage, or if mortgage rates have fallen below your current rate. Refinancing at a lower rate could save you money over the life of your mortgage.
So, there are a couple of different scenarios in which refinancing might make sense for you.
If you have a decent credit score, you may be able to refinance your car loan from a high-interest rate to a lower one. You may also be able to lower your monthly payments by extending your loan timeline; however, this will cause you to pay more interest charges over time.
Balance Transfer Cards
Balance transfers can be a great way to reduce the amount of interest you’re paying on credit card debt. By transferring your balance to a card with a lower interest rate, or even a 0% introductory APR, you can save money and get your debt under control.
However, it’s important to remember that balance transfer deals are often only available to people with good to excellent credit scores. So if you’re not sure about your credit score, it’s worth checking before you apply for a balance transfer.
See If You Qualify for Credit Card Relief
See how much you can save every month — plus get an estimate of time savings and total savings — with your very own personalized plan.
Another thing to keep in mind is that introductory rates will eventually expire, so you’ll need to be prepared to pay off any remaining debt before that happens. But if you use balance transfers wisely, they can be an effective tool for getting your finances back on track.
Bankruptcy In Pennsylvania
If you are considering filing for bankruptcy, it is important that you understand all of your options before making a decision. Bankruptcy is a serious matter and should not be taken lightly.
Your assets are sold off to pay your creditors. This can help you get rid of most of your debt and start over with a clean slate. Keep in mind, though, that not all debts can be discharged in bankruptcy.
You will work with a bankruptcy attorney to set up a plan to pay creditors in installments over a period of time (three to five years). During the agreed-upon payment period, creditors are not allowed to pursue collection. Generally speaking, Chapter 13 bankruptcy is viewed more favorably than Chapter 7.
There are several things to think about before filing for bankruptcy, such as negotiating with your lenders, getting a debt consolidation loan, or talking to a nonprofit credit counselor. You might also be able to borrow money from family or friends if that’s an option. If most of your debt is from student loans, you could look into an income-driven repayment plan. That way, you would pay off your federal student loan debt at a rate that matches your income.
Statute Of Limitations
The statute of limitations is four years for auto loans, credit cards, mortgages, and medical debt in Pennsylvania. However, state tax debt has no statute of limitations. It is important to check if the statute of limitations has expired on an old debt before making any payments, even if the amount owed is small.