Hawaii may be blessed with beautiful beaches and unbeatable ocean views, but even paradise comes with some daily challenges – like debt. If you’re overwhelmed by the mountain of monthly payments, you’re not alone. Hawaiians carry some of the highest home loan and credit card debt in america, although they have some of the lowest student and car loan rates.
Debt collection in hawaii
If you have unpaid debt in hawaii, creditors may refer your account to a debt collection agency. Hawaii’s collection agencies act requires agencies that collect debt from anyone in hawaii to register with the state’s department of commerce and consumer affairs.
When you sell your debt to a debt collection debt settlement hawaii agency, there are many rules about how creditors can contact you and what they can discuss. They can call or send letters, emails or text messages, but they can’t do it at an ‘inappropriate time or place’.
If you receive messages early in the morning or late in the evening, it is illegal – debt collection agencies must contact you between 8am and at 9 p.m. They should also stop contacting you at work unless you ask them to.
Hawaii loan relief programs
If you are struggling with bad debt, your debt has gone into collection, or if you are worried that a large debt may soon be sent to a collection agency, all hope is not lost. Several programs are available to help you get out of debt.
Debt relief programs provide an alternative to bankruptcy. These programs may be able to pay off your loan for less than what you owe – but keep in mind how much your loan will still cost. When you sign up with a debt relief program, it improves your relationship with your creditors.
Often, these programs require you to stop paying on old accounts in an effort to convince the creditor to negotiate before selling your debt to a collection agency. No matter what other firms may promise, however, it will not be a quick fix. Expect to wait up to four years before your debt is fully discharged.
Other options are:
National debt relief requires you to have at least $7,500 in debt and it usually takes 24 to 48 months to clear the debt. Expect to pay 18 to 25% of your monthly payments in fees.
Approved debt relief, which connects you with debt relief companies in its network. Fees vary, but expect to pay at least 5 to 7% of your loan amount per year.
Curadebt, which offers a free initial counseling session and charges up to 20% of your total debt. It only takes a minimum of 5,000 in credit to qualify.
Tips for debt settlement in hawaii
You don’t have to take out a payday loan or use a loan relief program to get a loan. Nothing is invincible: there are a number of consumer strategies that can reduce your monthly payments and debt burden – before your debts are sent to collection agencies.
Consolidate your credit
If you have several debts that weigh on your monthly budget, debt consolidation may be a good option.
Loan credit approval. The most popular way to improve credit is a personal loan. With a debt consolidation honolulu loan, you take the interest you pay and use it to pay off other debts. From now on, instead of making multiple payments, you will receive one monthly installment.
If you have a strong credit history, you can get financing at a lower rate than your current loan, with a lower interest rate.
It is the right situation, however. Some people may choose to consolidate a personal loan in order to extend the time they have to pay off the loan and lower their monthly payments, even if the interest rate is not the best.
You can’t save on interest in that case, but you give yourself room to breathe and you can move forward knowing that you have a solid loan with a rate that doesn’t change over time.
Debt consolidation is not a miracle cure – especially if you can’t stop reaching for a credit card. This approach requires a commitment to a debt-free lifestyle.
- Cash-out refinance. There are other ways to consolidate debt besides your personal loan. If you are a homeowner, you may consider a cash-out refinance, which allows you to take out a larger home loan and use the difference to pay off the debt. Just watch out for closing costs, which can eat into your savings.
- Home loan. Another option is a home loan consolidation loan. Because the loan is secured by your home, it can come at a lower cost than your current loan. However, the risk is that your home could become a victim if you default, so proceed with caution.
Mortgage refinance. If you’re feeling burdened by your home loan, you may want to consider refinancing with a lower rate – assuming that today’s rates are lower than the rate you saved on your original loan. If you’re refinancing, expect to pay the same closing costs and fees as a traditional home, which can be prohibitive if you’re financially strapped.
Auto loan refinance. A similar approach can be taken with auto loan refinance, especially if your credit has improved since you first financed the purchase. You may qualify for a car loan at a lower rate.
Also, some people may decide to refinance into a new loan or car loan with a longer repayment term to lower their monthly payments, even though they may end up paying more over the long term. If you are serious about investing and want to lower your monthly payments, this may make sense, but choose wisely.
The main thing is debt can be managed in hawaii if you are active. Now that you understand debt collection laws and debt relief options, you can take the next step towards financial freedom—whatever works for you.