Tag Archives: Debt consolidation
“If you really need a loan, it’s probably because you’ve already missed a few payments and your credit history has gone for toss. “The Hard-Money Loan” However the important thing about debt-consolidation loans is that they are easy to get, provided you have not messed with your credit score. This advice is given by many financial advisory.
At times you would find that your monthly payment is lower then other loans but you would end up paying more then the regular loan. The debt-consolidator may give an offer of easy-does-it loan but if you analyze this very carefully then you would see that the consolidator is charging you high interest rates than you are paying now as high as 22% or even 23%.
Debt Consolidators Who Promise to Take Care of Everything:
This is one dream that we would like to dream about especially when you miss your payments to make to the lenders. This Nice Big Debt Consolidation Company comes along and swears they’ll make your life so much easier. They’ll negotiate lower interest rates, reduce your monthly payments.
You must be wondering how the debt consolidators companies charge you. These companies build in a fee as part of the monthly payment you make to them. However the fact is totally different what they do is only about 10% of the payment is made to the creditor, some debit directly from your checking account and get the benefit of the remaining amount lets say about 12% to 14% share is taken by the debt-consolidator.
Is it worth paying someone else to do what you can do on your own? That is funny, because when I plugged my debt into the MSN Money Debt Consolidator — a less biased source, since they are not getting no fee from me, they said I could pay off my debt in 41 months, providing I make slightly higher minimum payments to each card: a total of just $60 extra per card.
I was just thinking to myself, is it worth paying someone else to do what you can do on your own? Simply what you have to do is negotiate lower interest rates and stretch out your repayment schedule and pay off the highest interest debt first.
The Balance Transfer Trap:
If you think you can swing from the balance-transfer vines for a few months, just make sure you formally close all your accounts yourself, and then notify the credit-card company to mark the account “closed at customer’s request.” “Otherwise, on your credit report, it will look like the creditor closed your account,” says one of the biggest credit reporting agencies. Thus making you look like an even worse risk, even when you’re doing your best not to be.
Finding a cheap debt consolidation loan can quite tough at times, especially in the present market. It seems like there are lots of debt consolidation companies offering loans to the borrowers and finding a right company may be quite difficult. You may do an internet search on different debt consolidation loan companies that can help you in reducing your financial obligations. You will be able to review the options, company’s guidelines, terms and conditions right from the comforts of your home, without wasting your valuable time and gas while driving from location to location.
Once you are looking for a Debt consolidation loan company, the first thing that you need to do is to find out the available options the company has to offer in order to help you come out of debts. For example, there are secured loan options that will offer lower interest rates. The secured loan will combine the balances from various creditors and rolled into the cost of your mortgage, since these plans are only available for homeowners. There are a variety of secured loan programs available to the borrowers. Be sure to read the terms and conditions to ensure that you don’t fall deeper into debts after signing up with the debt consolidation company.
When you are looking for different debt consolidation loans companies, you may find a lot of places that are willing to work with those individuals and families who own homes. It may be tough for you to get approved for a secured loan if you don’t own a home. There are different debt settlement firms that will be willing to work with non home owners and offer different options by combining all their debts into one affordable monthly payment plan. They will be able to negotiate for a lower interest rate and sometimes a lower overall payout.
Be careful when you are signing up with a debt consolidation loan company since there are many shady companies who are out there to scam people and run away with their money. These types of companies will thrive on charging high costs to your newly monthly payments for their services. Make sure that you have done your full research before signing up with any company to help you reduce your debts.
If you are being overwhelmed by your existing debts, you may consider the option of combining all your existing debts under one payment plan in the credit card debt consolidation. You should consider taking this step before your existing financial problems continues to leave a negative mark on your credit ratings.
Credit card has its own set of advantages and disadvantages. While it has made the purchase of goods and services much easier and you don’t have to carry too much cash in your wallet, it also creates an unhealthy and tempting spending habit. When you make a purchase on your credit card, you are well aware that you will pay back the amount in your next billing cycle. Often most people don’t do a proper budgeting of their finance and continue to purchase things that are not very urgent. They end up doing purchases more than their income and increase their debt to income ratio. So the credit card debt simply piles on and on. Most of the people are not able to pay the full outstanding balance within the due dates. As a result, the credit card company charges interests and fees each month and the outstanding balance keeps moving up. If you are just paying a little more than the minimum, a lot of money is eaten up in interests and fees alone. A situation may come that a substantial amount of your monthly income is going towards the credit card debts. It is time to be proactive and opt for a credit card debt consolidation program.
Credit card debt consolidation will combine multiple credit card accounts under one payment plan. You don’t have to worry about remember the different payment dates of your credit card bills. Your debt consolidation company will negotiate with your creditors to reduce the interest rates and waive off the fees added on the outstanding balance. They will explain that you are no more able to afford the existing interest rates and fees and it may happen that your accounts will turn delinquent, if it’s not happened till now. Your credit card company will offer you reduced interest rates after some serious negotiations done with your debt consolidation company. The monthly payment plan will be set to something that you can afford and you won’t have to face the irritating reminder calls, collection agencies etc. just stick to the monthly payment plan set with your debt consolidation company and they will disburse the payments to your creditors. They will send you monthly statements of how your money is applied towards different creditors in the program.
As the market shows falling mortgage rates, statistics show that the possibilities for real savings has increased more by using a home equity mortgage as a debt consolidation tool.
Homeowners who have paid down a certain portion of their existing mortgage will have built up some equity against which they can easily get a debt consolidation loan. Be aware of the fact that your house will be kept as collateral against the loan. You should not miss your monthly payments to the debt consolidation company otherwise your house will come under risk.
Most of the people go for debt consolidation because they want to lower their monthly payments by getting a lower interest rate from the existing ones. The repayment plan can be simplified by putting all the multiple payments under one. Many people find it easy to stretch the payments over a longer period of time to ease the pressure on the monthly budget.
When you are getting lower interest rates by consolidating your debts under one payment plan, the mortgage industry has been going down and that’s why the rates are so interesting. Mortgage rates have fallen from 6.74% to 6.45% in the last year. The longer this trend continues, there will be more opportunities for savings by consolidating debts into a home equity mortgage. This can just be the cure for many Americans overwhelmed by their existing debt problems.
If your life is gone out of control because of credit card debts and you jump to debt consolidation as a solution, the first thing that you need to do is to live your life without the plastic. Being in debts can be like a serious wound that will take long time to heal. If you are putting a bandage on it by going for a debt consolidation, make sure that you handle the underlying cause of the puncture, otherwise the bleeding will start again. Take steps to stay away from debts and make sure that you don’t have such wounds again.
Overspending and unemployment may be one of the basic reasons of falling in debts. If you don’t manage your finance properly and overspend what you have left, and are hit by unexpected reasons like unemployment, it is time to fix up this situation now before it gets way out of control. Debt consolidation will be a good step to combine all your debts under one monthly payment and pay off all your creditors one by one.
A nicely planned debt consolidation method will reduce your monthly payment burden and set a fixed payoff schedule to your creditors. You will be able to sleep well at nights and stop the phone call from ringing continuously.
Change your spending habits when you are considering debt consolidation as an option. You can’t spend too much at one end and consolidate your debts under a payment plan. Your main intention should be to reduce your existing debts, not to create new ones. Debt consolidation will fail if you are not controlling your spending habits. Any debt reduction strategy requires a serious lifestyle change. You should have the perfect control on your finance and staying out of debts.