Debt Consolidation

Springtime Warnings for Those Thinking of Debt Consolidation

Spring is a great time to cleanse your whole house, but why should you leave your finances untouched? It’s better to make sure that you can actually get things done than to waste another season worrying about all of the things that you don’t have. If you’re in debt, running away from the problem does absolutely nothing. You’re going to have to figure out how to fight back as soon as you can. This often means doing things that you might not have considered before. So while you’re looking at the first flowers of spring, why not check out debt consolidation?

Debt consolidation is exactly what it sounds like — it’s about taking all of your debts, combining them together (usually without interest), and paying one payment every single month to take care of them. Debt consolidation definitely works, but you have to make sure that you’re committed.

Committed? Absolutely. When you work with a debt consolidation company, they work their fees into your monthly payment. This means that you have to make all of your payments on time, or the agreement becomes null and void. If you’re trying to escape high credit card debt, guess what that means? You guessed it — it means that you’re going to be stuck paying all of your credit cards separately. Did you know that every time you miss a credit card payment, the company reserves the right to raise your interest rates? This means that sky high interest rates eat away at your monthly payments. This is why people spend so many years taking care of a minimum payment, only to find that they really haven’t eaten away at the debt at all. They’re just treading water instead of moving towards a debt free life. The rise of bankruptcy and despair from having to declare bankruptcy should be a lesson to everyone else — avoid it at all costs!

Now then, we warn about debt consolidation because it’s not automatic. You have to make sure all of your creditors actually agree to it. This is done primarily through negotiations between them and the debt consolidation company. If you’re not a natural negotiator, this is a blessing in disguise. You aren’t going to be shooting your own foot off trying to get things done. You can go about your everyday, normal life making your payments.

But it cannot be stressed enough — you have to make those payments. Failure to do so undoes everything that you’ve worked hard to build. This means that until those debts are paid, you’re going to have to make some big changes. This isn’t a bad thing, when you really think about it. You should cut your spending. You’ll find as time goes by that all of the things that you felt you had to have just aren’t as important as you thought they were. This is something that can put a smile on your face.

Getting creative about how you have a good time isn’t too difficult. Indeed, the Internet is filled with free stuff to do. This means that you might even be able to cut your cable subscription. Use that money to fund your savings account a little bit at a time. It’s been shown that when people actually have extra money in a savings account, the number of emergencies is actually reduced. That’s something worth celebrating, right?

You will find that building your life back is difficult, but not impossible. The last thing that you want to do is keep spending money when you’re trying to improve your life. There are undoubtedly things that you will have to spend money on, but there are also things that you can avoid. As long as you think about it in those terms, you just can’t go wrong.

Why not start your journey today? There are plenty of debt consolidation companies to choose from. If you have any questions, please don’t hesitate to reach out to those companies and ask. That’s their job to make you feel as comfortable as possible in order to move forward.

Ask yourself right now: am I tired of the way things are? Am I really making as much progress as I think I am on my finances? If the answers are both “yes” to the first one and “no” to the second one, then you owe it to yourself and your family to take steps to end the cycle of debt. Even though this isn’t going to be an overnight process, it is a process that’s worth checking out for yourself. Good luck!

Does Debt Really Take Time to Clear?

Any quick search on Google will lead you to a lot of frustration sometimes, especially when it comes to the world of credit. You’ll see a lot of advertisements for clearing your debt s fast as 30 days from now, while others will tell you that your credit card problem will be erased in less than 72 hours.

Those offers sound pretty good, but unfortunately that’s all they really say. If you’re not careful you’ll find yourself facing even further trouble as most of these fly by night operations charge a pretty penny to get you to sign up with them. It’s a lot of wasted time, a lot of wasted money, and there are better options out there.

Let’s go back to the original question: does debt really take time to clear? That depends on the method that you choose. You can take roads that shorten the overall time it takes to pay back your debts, but you’re not going to see a massive change overnight. In fact, you will want to take the time to really heal not only your credit score, but the way you see credit in the first place. Personal finance skills are the key to a rewarding life, and if you’re not careful with your budget you’ll end up making your life a lot more difficult than it really needs to be.

The best thing that you can do for yourself is to see whether or not debt consolidation is an option for you. For starters, debt consolidation does exactly what the name implies it does. It rolls all of your eligible debts into one low monthly payment with a much lower interest rate.

In fact dependent upon your age, you may even be eligible for an interest rate that is fixed for the rest of your life. Anyone consolidating debts over the age of 55 have access to payment free mortgages which can be used to clear their liabilities. In such scenarios equity release is used for debt consolidation purposes & removes the necessity for future monthly payments, thus alleviating the family budget.

Real debt consolidation companies have a lot of experience when it comes to working with the credit card companies. While credit card corporations hate taking a hit when they could be getting the entire debt from you, they also realize that it’s a lot better to get at least part of the money than to have to forfeit all of it. If you declare bankruptcy, they can’t technically go after you if you have no assets that can be seized. Since they want to avoid forcing you into bankruptcy, many credit card companies are actually more than happy to negotiate.

So why don’t they negotiate with you? Well, first and foremost they know that you are more afraid of them than the other way around. They know that you’re going to be afraid and stressed out, so they go ahead and try to get as much as they can from you — including the late fees, accrued interest, and any other fees they can legally stick you with. Is that right? No, and that’s exactly why you need a strong financial advocate on your side!

When you’re ready to move forward, the choice is easy — debt consolidation can really help you pay down debt faster and move closer to the debt free life that you deserve!

What is Debt Consolidation?

Debt consolidation means taking a loan to close off the majority of the other debts. This is usually done to avail a lower rate of interest, reducing the monthly payments and also to secure a fixed interest rate. This is generally a risk free program which involves a third party to negotiate on your behalf with your creditors. In many cases, one single debt consolidation makes monthly payments to all your money lenders and makes you completely debt free.

There is an agreement that is worked out with all your creditors based on what you can afford to pay. There have been instances when interest rates and payment amounts are reduced allowing you to come out of the financial obligation much faster and with less amount of money. Though this loan type is pretty lucrative and generally risk free, it is better to take some cautions.

To start with, be careful of the type of loan that you are choosing. Think and decide properly before consolidating unsecured debt to a loan secured by your house; remember, if you make any wrong calculations, you can end up losing your home. Moreover, thoroughly scrutinize the terms and conditions of any consolidating loan that has a variable rate of interest.

Finally, studies have revealed that rolling all your debts into another loan can backfire on the customer. There is a possibility that within one year the consumer will again increase his debt by utilizing the same credit cards which were paid off in the consolidation loan – thus making him pay not only on the credit cards once again but also on the consolidation loan.


Loan consolidation for students

Federal student loans are consolidated in a little different manner in the United States as the federal student loans are granted by the government. In a federal student loan consolidation, all the open loans are closed off by the Department of Education or a loan consolidation company. The interest rates (for the consolidation) are dependent on the on that particular year’s student loan rate that in turn is based on the 91-day Treasury bill rate at the last auction which is held in the month of May of each calendar year.

Often federal student loan consolidation is mistakenly referred to as refinancing; for it must be remembered that these rates are not changed but just locked in. In contrast to debt consolidation in private sectors, student loans do not incur any fees for the borrower.

The apprehensions about consolidation

In the recent years, a lot of questions have been raised about the use of such consolidation loans. As discussed earlier, many consumers try and consolidate all unsecured debts into a secured debt, where the house is used as a guarantor. Though, there is a considerable reduction in the total monthly payment, you can see that the total amount repaid is often much higher due to the long tenure of the loan. So, in some situations, snowballing debt is a better solution.

There can be other alternatives to a debt consolidation loan where the unsecured debts are not shifted to the secured debt but removed either through settlements or through a payment plan. Debt consolidation can create confusion amongst users, so it is advisable to seek professional help and clarify all doubts.

Some FAQs about debt consolidation

How will I qualify?

You be qualified to avail this loan if you have unsecured loans like credit cards, personal loans, utility bills and medical bills and wish to correct your finances by closing them.

How much will I actually save if I take this loan?

Most of the credit counseling agencies can assist you to bring down your monthly payments significantly. A consumer who has a debt of $15,000 on his credit cards and is paying an interest of almost 21% will see the following changes from a debt consolidation program:

The existing finance charge – $15,375
Program finance charge – $6000
The present rate of interest – 21%
The new rate of interest – approximately 9%
Time to pay off debt from the current plan – 81 months
Time to pay off debt from the new plan – 56 months
Total savings – $9,375
Time savings – 25 months

Why Resort to Debt Consolidation?

The process of merging together multiple debts into just a single loan is known as debt consolidation.  The idea of debt consolidation is to help individuals pay off their debts through at a significantly lower interest rate.  This process gives borrowers chance to manage their finances a lot better because they will only just keep track of one credit account.

What usually causes multiple debts is over borrowing.  If you are one of the countless people who are locked up with mountainous debts, debt consolidation should be one of your options.  If you avail of this opportunity to regain your financial stability, you are doing yourself a really big favor. Here are the things that you can benefit from debt consolidation:

1.    You will pay lower monthly repayments. In debt consolidation, the interest rate that is usually applied is significantly lower if you compare it the rate that you are currently paying.  However, not all borrowers get the same interest rate as this depends on the credit rating and, of course, on the terms of payment.

2.    It allows you to manage your debts better. Since you will only be paying only one credit account after you avail of debt consolidation, you obviously will have a better control over your finances.  You will get to avoid mismanagement of debt because you will already be able to keep track of your monthly obligation more efficiently.  Moreover, it is much easier to budget your monthly income if you choose to get a debt consolidation loan.

3.    You can consistently pay a low amount monthly until your loan repayment period ends. Since the rates of interest have been at their lowest for the past several years, you can actually take advantage of this by availing a debt consolidation loan and opt for a fixed rate mortgage.  Even if the interest rates will soar up high when the economy picks up its momentum, you will still be paying the same amount, nothing more and nothing less.

4.    It offers flexibility in terms of interest rates. When you plan to pre-terminate your loan, which means that you will pay off your loan several years prior to the agreed settlement date, you will only be required to pay for the principal amount excluding the interest that supposedly has to occur within the remaining years.  This is the exact opposite of other loans wherein you need to pay a penalty for paying your loan earlier than expected.

Debt Consolidation: What You Need to Know About It

It is undeniable that many people are having money problems nowadays, and this problem is really hard to deal with.  Quite a number of people started incurring problems on money when the global economic downfall or recession took place.  Before the economic downfall, everything was right on place where people were financially stable and they were confident enough to obtain loans.  Never did crisis enter their minds.  As a result, after the economy has fallen, most of them realized that they can’t settle their multiple debts anymore, and this triggered the popularity of debt consolidation.

Unable to settle debts on time can greatly affect your credit rating and it will be lot harder for you to obtain any other loans if you plan to use them to pay off your existing loans.  If this is the case, you need debt consolidation.  There is a chance that you will be granted a debt consolidation loan even if you have an unpleasant credit rating.

Since there was a rise in the demand for debt consolidation loans, there was also a sudden increase in the number of companies providing such loan.  However, this makes the selection process difficult.  This is why, before applying for a debt consolidation loan, you have to know every detail so you will avoid paying hidden charges or fees.  If you are not aware of the things that you should be looking for in a good company, then you might want to consult a debt consolidation expert.

Actually, it is easy to look and choose a debt consolidation loan as many companies are offering them online.  But if you prefer scouting for a loan provider online, you still have to exercise extra caution as there are some bogus providers and scammers.  All they want is to fool people and so you have to be very vigilant.

Before applying for a debt consolidation loan, you have to gather all your debts and know how much you exactly owe so you know how much you are supposed to borrow.  Know the interest rate and the loan terms of several debt consolidation providers and make a thorough comparison.  This way, you will be able to pinpoint which of these providers have the most ideal offer.

Debt consolidation is also for people who are about to face bankruptcy.  Before you give up everything, including your credibility, you should try to consider this option first.

Debt Consolidation for a Debt-Free Life

It is so tempting to obtain loans with low rates of interest without even looking deeply at what the loan providers are offering.  Many people have failed to check whether or not the loan has hidden charges or fees.  Some just focus on the interest rate and as a result, they end up imprisoned in a suffocating cage of debts.

It is not difficult to obtain a loan, but it not that easy to pay them off promptly.  These days, due to the bad economic condition, businesses have become unstable and this includes their profitability.  Because of this sad situation, businesses have to shut down or lay off  employees.  This really had a bad impact on the financial conditions of people who were affected by the crisis.

Credit providers as well as banking institutions are also tremendously affected and so they also have to do their part in collecting payments from their debtors.  If you have been receiving demeaning calls and letters from your creditors, these are their ways of getting payments from you.

Debt is a product of various loans like housing loans, car loans and credit card loans.  Failure to pay these loans can mean penalties, bad credit standing, and foreclosure.

All these circumstances, however, can be resolved through debt consolidation.  Debt consolidation is a kind of loan that is granted to people with large and multiple debts.  During the process, all debts are combined together forming only one account.  This is a complete loan that offers low rates of interests.  You have the option to choose between a fixed interest rate and a variable interest rate.  Debt consolidation usually covers unsecured loans, which are then converted to a secured loan.

There are already many debt consolidation providers offering this option and you may find them within your locality or over the internet.  Before you sign a loan application, make sure that you are dealing with a legitimate company, and you can figure this out through research.

There are several benefits of debt consolidation, such as:

1.    You will pay fixed monthly payments, unless you choose a variable interest rate.

2.    Lower monthly payments.  In a debt consolidation, the interest rate is usually much lower, which means that your monthly will obviously be lower.

3.    You will only get to monitor one account.  Since all your debts will be merged into a single account, you have no reason to forget your obligation.

Attaining Financial Freedom through Debt Consolidation

Many people obtain loans from banking institutions or credit providers to sustain their needs.  At first, it seems easy to pay off loans according to the payment terms agreed upon by debtors and creditors, but there comes a time when unfortunate events happen in life, and this greatly affect one’s financial status.  Loans start to fall delinquent and credit scores begin to suffer.  This looks like a hopeless situation, but with debt consolidation, this can possibly be surmounted.

One of the most vital things needed to survive in life is money.  Not all of us are living a comfortable life where we can afford to purchase anything we want in cash.  This is the reason why many individuals resort to obtaining loans from banks and credit institutions to get what they need.  When a loan is granted, the debtor agrees to pay the principal amount with an interest rate on an installment or monthly basis.  The payment terms usually vary and they depend upon an agreement.  In case of failure of payments, certain rules apply, but unfortunately, not everybody can keep up with the requirements of creditors and so they get stuck in an unending debt.  Good thing, there is a debt consolidation option.

Debt consolidation is basically a kind of loan extended to people who are suffering debt problems.  This aims to assist people in paying off their existing loans and stop them from incurring interests.  Some banking institutions offer this option to their clients who have previously availed a loan from them at a much lower rate of interest.  There are also those that prefer other banks, especially if the interest rates are a bit lower.

If you choose to take out a debt consolidation loan, you must see to it that the company is reputable. Know all the necessary requirements before applying for a debt consolidation for faster processing.  It is also crucial to know all the details before signing on the dotted line like the interest rates, loan term, fees, etc.  Read all the terms of agreement because this is the best way to prevent major problems in the future.

It would also be nice to look for a debt consolidation company that offers low rate of interest.  Try to visit several companies and compare their terms to know which of them has the best deal.  Being able to get hold of the right debt consolidation loan will result to financial freedom, and this is practically what everybody wants.

Give Debt Consolidation a Fair Chance!

It’s never a really good time to be in debt, but there are a lot of perks to being in debt in a modern society compared to centuries before. In the distant past, when you were in serious debt you got thrown into debtor’s prison. Nowadays, you just have to deal with irritated debt collectors and the possibility of lawsuits. So what you have to do with your credit now really does matter. Cleaning up your credit can take some time, but it’s well worth it: once you’re out of debt, you can focus on the next chapter of your life — which should be not only saving money so that you don’t fall on hard times again, but also building credit so that you don’t have to deal with a bad credit score your whole life.

The best that we can advise you when it comes to this situation is that you have to make sure that you face your options with not only an open mind, but also an open heart. You don’t want to feel like it’s absolutely impossible to get things done, because there is always a way. Even when it seems impossible. You might have to take on extra jobs, start a business on the side for extra money, or even just cut all of your expenses in order to pay more towards your bills. Trust us — we’ve been there, and we have used different types of debt relief in order to get things back on track.

Having an open heart means that you have to believe in your heart that better times are ahead. You have to believe in your heart that you will have a debt free life. Yes, your family will have to go through some challenges in order to get things done. Yes, your family will not be happy about this. However, when you’re able to give them the best life possible because the debts aren’t in the way, then you’re really going to be happy.

One option for removing debt has to be debt consolidation. It’s very easy to actually take care of just about all of the debts that you have with ease. The way debt consolidation works is pretty straightforward — you go and basically get your debts organized into a much neater package. It can sound tough at first, but it actually allows you to get out of debt so much faster. This is because the interest rates are reduced, leading to a lower monthly payment. It’s a given fact that the highest your interest rate is, the harder it’s going to be to actually get out of debt. That’s because most of your payments are going to be going towards that high interest rate and not the actual principal of what you owe. In addition, if you pay the minimum amount, it compounds the problem because virtually all of the minimum goes towards interest. This is why you can keep paying on a debt for years and never really see it go down. That’s the real trouble with the way most people try to get out of debt. The way the numbers are set up, getting out of debt is something that usually takes many, many years.

The downside is that under the traditional system, all of those years paying on debt that could have been erased faster means that there is less time to do the things that you really need, such as going back to school, or buying materials to start a business, or even something as basic as saving for a home. You can’t do those things when you’re worried day to day about your bills.

That’s where debt consolidation actually steps in. You can roll all of your payments into one. This means that you don’t have a bunch of different due dates that could result in late fees if you don’t pay on time. This makes it easier to build your credit score back as well, because you’ll be paying on time again. Anytime you can reach for positive credit activity, you definitely should.

There are plenty of great debt consolidation companies out there, you just need to go out there and look for them. If you really focus on the steps of debt consolidation, there’s no limit to what you can achieve.

Imagine — a debt free life, just ripe for the taking. Remember what we said in the beginning about having both an open heart and an open mind? That can be easier said than done. You’re going to have to get the family together and talk about all of these points. There might be some criticism, but look at it this way — any action that you can take is a lot better than not taking any action at all.

So, if you’re ready to take back your life from the clutches of debt, it’s time to give debt consolidation a fair chance!

The Positive Side of Debt Consolidation

Debt consolidation has become a big deal for people who incur vast amounts of debt that they now owe to their lenders. Now they only make one affordable payment, and their total costs are less in regards to interest every month. Debt consolidation is a wise choice for people who are afraid they may be forced to file bankruptcy or who see their finances rolling out of control.

Debt Consolidation With Low Interest – There are a lot of benefits to be had through debt consolidation. Many people who consolidate are asked to pledge collateral, usually meaning a lien on their homes or some other valuable asset. Pledging collateral takes the risk out of the loan for the lender, so they are able to offer you much lower interest rates than with other loans.

Debt Consolidation Dealing With One Lone Creditor – Debt consolidation also gives you better control over your finances because you only deal with one creditor with one payment and one due date. Many borrowers carry an average of ten creditors they have to deal with every month. This leads to mass confusion and a lot of time spent on check writing and paying online. Through debt consolidation one payment is made once a month and you are finished.

Debt Consolidation With Low Monthly Payments – Debt consolidation enables you to have lower payments every month. Because of the smaller rate of interest used to pay for the funds that are used for paying off your lenders, the amount of money that you pay each month is significantly lower than the combined payments had been before your debt consolidation.

Debt Consolidation Tax Breaks – You also have the potential to save more with a debt consolidation due to tax breaks. Whenever you utilize debt consolidation, you are in essence taking out another mortgage on your house. The interest paid on your mortgage is something you can write off on your taxes. Interest that is paid on those credit cards you have is just money flushed down the drain. Your tax savings are quite significant when you consolidate your debt.

Debt Consolidation Lenders – If you already decided to consolidate and take advantage of the benefits, then finding the right lender is your next move. You can apply online practically effortless. It’s a hassle free way of obtaining your debt consolidation loan. It’s nearly paperless which makes it quite appealing to many, and they are ready to do business 24/7.

What You Should Look For In Debt Consolidation

If you are looking for debt consolidation, have you asked yourself whether or not you’re a good candidate for it? Maybe you should. It’s not for everybody and knowing when it’s right and when it’s not can save you some real headaches.

It’s true there are many people who are great candidates and can benefit from getting some debt consolidation. If you’re bogged down with debt and it’s spread out everywhere with different interest rates on everything, then you might benefit. If you are able to secure a loan for yourself at a lower interest rate, then you still could benefit. If you happen to be in emergency mode and need to pay something off really quick, again, you might be right to look for one. In that case home equity loans work well too.

But if you still want to go ahead with debt consolidation, then you have to know you are capable of carrying it through, and if it will help you stay out of debt down the road. You should figure out if you are willing enough to properly research this loan and do what it takes to get the best deal for yourself. This is a time when you really have to be totally honest with yourself. If not, it’s probably a real waste of time.

You never want to get into debt consolidation deals when you are undisciplined. It doesn’t do you any good to consolidate all your debts only to find extra money and rack up more debt going on a spending binge. People do funny things once they get the credit card debt off their backs, and then end up in a hole that’s even deeper.

If you really make enough each month to pay your bills off but don’t, you probably are a bad candidate and should think twice. You’d be better off locating someone who can help you with budgeting. You can even let someone do the bill paying for you while giving you a steady allowance.

And if you aren’t making enough each month, then what makes you think debt consolidation is going to help? This is good time to seek out somebody for help like in the ‘Consumer Credit Counseling’.  They are good help but they make you cut up your credit cards. That’s a big step for a lot of people.

So you see that a lot of thought needs to be put in before taking the step of debt consolidation