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It’s best to only get loans for mortgages, cars, and education but sometimes people get into bad situations. Dealing with debt is tough but it’s even tougher when you don’t have a budget. A budget is a 1st step to developing your plan to get out of debt! You want to create a budget that is possible to maintain. It has to be attainable and it has to be serious enough to make a difference. After the budget is created, you will need the discipline to carry out your budget. The following is a list of the different types of debt available to consumers and our best advice on how to handle each of them…


  • A Mortgage is one of the 3 types of debt that you should have if you need it.
  • Bi-weekly Payment Plans – Most only play one extra payment per year but could potentially make you miss a payment if you have a bad couple of weeks. Our advice is to save money and pay more when you have it. The more you pay the less you will owe on your principal and the quicker you will pay off your mortgage.

Auto Payments

  • It’s expensive to have a car these days but an auto payment is one of 3 types of debt you should have if you need it.
  • Our advice is to round it up to the nearest $100. Example: If your payment is $249, then pay $300. This will speed up the payoff.

Credit Card Payments

  • Credit cards are for temporary expenses and not meant to be part of your lifestyle. If you carry $5,000 then paying the minimum amount will usually take you 13 years.  If it’s over $10,000 then it’s more like 23 years!
  • Our advice is to pay an extra $50 toward principal each payment.
  • Whatever your first budget as your payment to credit card, then roll over that full amount to pay off the next card. The quicker your out of credit card debt, the sooner you’ll get your life back!
  • Don’t charge want you can’t pay off in a month or two.

Installment Loans

  • Our advice is to make a payment and a half each month until it’s paid off
  • Don’t take any more installment loans after you pay them off.

Finance Companies

  • Finance adversely affect your credit score because they report the principal with the interest added. The balance on your credit report shows the precomputed, extended out interest and principal of what you borrow from finance companies. So a loan of $2000 from a finance company could show up as $4,000.  It’s nothing to see interest rates of 20-38% on finance company loans.
  • Our advice is to make a payment and a half each month to pay them off sooner.
  • Don’t use Finance Companies again after you pay them off.


  • Debt collectors are paid for the amount of money they collect, so they want the balance in full, not payments.
  • Our Advice is to ignore them and just start sending partial payments.  Eventually, they will work out an arrangement for you in most cases..

Check Cashing

  • Our advice is to not borrow to pay off a payment. We suggest you stop payment on the check you gave them and change checking accounts. We want you to pay them back but on your terms and in installments.  We suggest you divide an amount into 6 for $600 or less and divide by 12 for $600-$1,200. Call a professional for help with unruly check cashing owners or larger amounts.

Online Lenders

  • Most online lenders are on Native American Reservations
  • Our advice is to never get loans from online lenders. It’s illegal in America, outside the reservations, and legal suites probably won’t hold water. It’s the Christian thing to pay it back but only at the amount loaned.

Medical Debt

Our advice is to treat medical debt like collections.  Sent partial payments and it will eventually be paid. Don’t ignore it.

Example Case: Credit Card Debt 

The Situation

  • Owed $655 a month to credit card companies
  • Average Interest Rate of 28%
  • Payoff in 53 Months.

The New Plan Created by A Debt Coach

  • Payments down $375
  • Average Interest Rate of 12.00% (down 16.00%)
  • Paid off in 28 months
  • The only charge to the client from a Debt Coach for its services was $65 one time and a monthly service fee of $20/month.

A Debt Coach offers credit counseling services to people who are experiencing credit and debt problems! We create customized plans with your budget in mind and deal directly with your creditors. No gimmicks, no funny business! Both the Government and your creditors are happy that we are here to help you solve your financial problems. 

Contact us (888-767-9155) today to get started!

About A Debt Coach

logoA Debt Coach is a Non-Profit Credit Counseling Agency that helps consumers find options available for the financial problems they face. We offer credit counseling services to clients across the country who are experiencing credit and debt problems. A Debt Coach offers one of the most beneficial debt consolidation programs in the nation and we have provided counseling and advice to more than 200,000 consumers since 1992.
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Did you know that A Debt Coach provides free financial education and advice? We provide advice so that people can get their lives back in order! The free education starts by downloading our free “Own Your Life” ebook.

Everyone who downloads the book will be approached to start the “Budget Bootcamp” with Randy after you read the book! Randy will help you create the best budget for your situation and put you on a glide path towards being totally debt-free!