Also in this playlist...
This transcript is automatically generated
Welcome back everyone for the millions of American.
-- the student loan debt many may be tempted to look for some sort of a quick financial fix.
The shocking new report finds that some debt relief firms are tricking borrowers into paying up to 16100 dollars for access to programs that are supposed to be free.
And -- the keeper of the free part a personal finance expert Dave Ramsey joins us now from Nashville with more on how to avoid these debt consolidation dangers.
-- it sounds great they're gonna help us out through cost us a little -- them but it shouldn't because it's a free program.
Well absolutely we column -- calm solid nation loans and debt -- celebration programs because it's a -- it really -- The student loan program is very simple it's federally insured student loans translation you and I we the people have guaranteed that.
Bank that if these loans go bad we're gonna pay them for the bank.
So there's not a lot of programs because they're not gonna discount these low income and that there are some basic federal guidelines on things that if you get behind in -- in a hardship you can defer student loans but you don't have to pay anybody do that you pick up the phone and you call Sallie Mae and who.
-- with debt consolidation.
There are some dangers for instance you say it treats the symptom not the problem.
Dead is never really the problem it's the symptom.
And it is the problem is -- overspending my lack of getting on a budget my lack of taking an extra job.
You know you've got to do things and do the hard work get out of debt there's not a magic -- debt deal which you can today.
The government doesn't have one and nobody sells one for 16100 dollars -- they'd be selling a lot of -- you know kids I went up high fees stayed because I do you say that that keeps you in debt longer obviously.
Well yeah when you pay so -- 16100 bucks you should've been paying on your dad.
Then you got a problem we've got the same thing over in the credit card were aware of these.
These basically Federal Trade Commission says this is the number one area of complaint.
In all of finance and it's these companies as I take what -- payments pay us for 500 dollars a month for months only and and then we'll negotiate.
A lower balance on your credit card -- -- settled amount under credit cards if you're behind on your credit card you can negotiate your own settlement.
It's -- same thing it's a huge fee it's all up front it's all a bad idea take control your own life don't try to hire somebody picture life.
Yeah I make the effort a lot of people think that that would be a better way to do would have somebody else go to bat we have because you're embarrassed about the -- -- and meanwhile some things we should do use the debt snowball the pay off debts in what respect.
Well that's snowball is if you can get current and get on a series of payments.
-- you list your debts smallest to largest pay minimum payments on everything you got going except the smallest when you attack.
The little one with a vengeance.
And you work that through.
And then a modified version of that of course is if you behind so you got six very credit cards and student loan debt and you're behind on all of them.
Then just start start saying hey I'm gonna take the little one and I'm gonna try to work out a deal with them first and -- -- work out a deal with the next one but develop a plan yourself.
This idea that somebody is gonna come in on a white horse and picture deal it is just childish and it does not work.
-- -- his name is Dave Ramsey he fixes everything.
He would ballots and -- so adorable yes I'm sure in -- he's going to be on a white horse a white bra color yes doing this interview all right I have a couple I don't have my ultimate I don't -- my own the show Gretchen congratulations.
All of thank you so much state it's been a pleasure speaking to you every week and we'll continue to do so throughout the summer thanks -- -- a great week.
Thank you to.
Filter by section