You are swimming in debt. You have 4 credit cards maxed out, a car loan, a consumer loan, and a house payment. Simply making the minimum payments is causing your distress and certainly not getting you out of debt. What should you do?
Some people feel that debt consolidation loans are the best option. A debt consolidation loans is one loan which pays off many other loans or lines of credit.
I’m sure you’ve seen the advertisements of smiling people who have chosen to take a consolidation loan. They seem to have had the weight of the world lifted off their shoulders. But are debt consolidation loans a good deal? Let’s explore the pros and cons of this type of debt solution.
Pros
1. One payment versus many payments: The average citizen of the USA pays 11 different creditors every month. Making one single payment is much easier than figuring out who should get paid how much and when. This makes managing your finances much easier.
2. Reduced interest rates: Since the most common type of debt consolidation loan is the home equity loan, also called a second mortgage, the interest rates will be lower than most consumer debt interest rates. Your mortgage is a secured debt. This means that they have something they can take from you if you do not make your payment. Credit cards are unsecured loans. They have nothing except your word and your history. Since this is the case, unsecured loans typically have higher interest rates.
3. Lower monthly payments: Since the interest rate is lower and because you have one payment vs many, the amount you have to pay per month is typically decreased significantly.
4. Only one creditor: With a consolidated loan, you only have one creditor to deal with. If there are any problems or issues, you will only have to make one call instead of several. Once again, this simply makes controlling your finances much easier.
5. Tax Breaks: Interest paid to a credit card is money down the drain. Interest paid to a mortgage can be used as a tax write-off.
Sounds great, doesn’t it? Before you run out and get a loan, let’s look at the other side of the picture – the cons.
Cons
1. Easy to get into further debt: With an easier load to bear and more money left over at the end of the month, it might be easy to start using your credit cards again or continuing spending habits that got you into such credit card debt in the first place.
2. Longer time to pay off: Most mortgages are the 10 to 30 year variety. This means that rather than spend a couple of years getting out of credit card debt, you will be spending the length of your mortgage getting out of debt.
3. Spend more over the long haul: Even though the interest rate is less, if you take the loan out over a 30 year period, you may end up spending more than you would have if you had kept each individual loan.
4. You can lose everything: Consolidation loans are secured loans. If you didn’t pay an unsecured credit card loan, it would give you a bad rating but your home would still be secure. If you do not pay a secured loan, they will take away whatever secured the loan. In most cases, this is your home.
As you can see, consolidated loans are not for everyone. Before you make a decision, you must realistically look at the pros and cons to determine if this is the right decision for you.
By Wesley Atkins
Monday, January 8, 2007
Bad Credit Debt Consolidation Loan
Nowadays, many people can get into a bad credit situation if they do not keep track of their income and expenditure. Many young executives suddenly find that they are being offered credit cards by various companies. Those who are sensible will find a credit card that suits their needs, sign up, keep track of their purchases, pay off their credit card bills in full each month, and ignore offers from other companies.
There are others who may be dazzled by all the credit on offer and will end up with credit cards from several companies. They may easily end up making lots of purchases on credit while making the minimum payments on their cards. Then, one day they realize just how much debt they are in when they need a debt consolidation loan to get out of a bad credit situation.
At the Debt Consolidation and Debt Reduction Service, we do not give you debt consolidation loans. We help you reduce your debts by 40 percent to 60 percent and your payments by 40 percent. We see to it that you pay no interest, late fees, or penalties. We get you out of debt, and out of a bad credit situation, within three years. We ensure that you receive no more harassing phone calls from creditors by negotiating with them.
We can help you create a debt reduction plan. You begin by listing all your debts, estimating your income, and creating a workable monthly budget. You then have to find the money to pay off all your debts. We also offer credit counseling to our clients. We begin by advising our clients to stop using their credit cards—this automatically stops their debt situation from worsening. By helping you estimate your income and create a monthly budget, we ensure that you know how much you earn each month and how you spend what you earn.
You can consult us if you have debts that are over and above $5,000. You cannot hope to get out of a bad credit situation if you only pay the minimum amounts due every month—you cannot hope to get out of debt for a lifetime. If you decide to go in for debt consolidation—where the numerous payments you have to make each month are consolidated into one small sum—you can hope to get out of debt faster. If you are in a bad credit situation and need help with debt consolidation, fill out the form on our Web site. We will help you get out and stay out of debt for the rest of your life.
By Jonathan Pike
There are others who may be dazzled by all the credit on offer and will end up with credit cards from several companies. They may easily end up making lots of purchases on credit while making the minimum payments on their cards. Then, one day they realize just how much debt they are in when they need a debt consolidation loan to get out of a bad credit situation.
At the Debt Consolidation and Debt Reduction Service, we do not give you debt consolidation loans. We help you reduce your debts by 40 percent to 60 percent and your payments by 40 percent. We see to it that you pay no interest, late fees, or penalties. We get you out of debt, and out of a bad credit situation, within three years. We ensure that you receive no more harassing phone calls from creditors by negotiating with them.
We can help you create a debt reduction plan. You begin by listing all your debts, estimating your income, and creating a workable monthly budget. You then have to find the money to pay off all your debts. We also offer credit counseling to our clients. We begin by advising our clients to stop using their credit cards—this automatically stops their debt situation from worsening. By helping you estimate your income and create a monthly budget, we ensure that you know how much you earn each month and how you spend what you earn.
You can consult us if you have debts that are over and above $5,000. You cannot hope to get out of a bad credit situation if you only pay the minimum amounts due every month—you cannot hope to get out of debt for a lifetime. If you decide to go in for debt consolidation—where the numerous payments you have to make each month are consolidated into one small sum—you can hope to get out of debt faster. If you are in a bad credit situation and need help with debt consolidation, fill out the form on our Web site. We will help you get out and stay out of debt for the rest of your life.
By Jonathan Pike
Bad Credit Debt Consolidation Loans
Are you looking to consolidate credit card or other debt? Do you have bad credit history? There are many options available online nowadays to help you consolidate your debt. Whether you are wanting to consolidate credit card debt or other kinds of debt, it can be overwhelming searching online to find the best ones for your situation. Here is a short overview of what kind of debt services are available online.
If you are looking for a loan to consolidate your debt, you will need to qualify for the loan, just like any other loan. If you have a home, you may be able to get an equity loan using your equity or even go over the appraised value of your home in order to get the financing you need.
You may be able to qualify for an unsecured loan, which can consolidate your debt with one low monthly payment with no ties to any of your assets.
There are other companies that will help you manage your debt without having to use another loan. These companies usually charge you a fee and then help negotiate lower interest rates with your creditors and manage your monthly payments. There are various ways to do this and every company is different. Usually these techniques will save you money to start paying down the principle on your credit balances.
Some of these companies are definitely worth the small monthly fee, and can save you much more than they charge. But, some of these companies are not legitimate and can take your monthly payments and keep them for a month or more before they make your payments (collecting interest on the money all the while), causing you to accrue late fees and possibly collections. These companies can actually cost you money and make your situation worse.
Be careful when searching for debt consolidation companies to work with. Make sure they are legitimate, long standing companies before you sign on the dotted line. To see our list of recommended debt consolidation lenders click on the link below.
Consolidating your debt can provide great relief and breathing room when it comes time to pay your bills. Sometimes, when you are up to the hilt in debt, it can be so overwhelming just keeping up with your bills that it can be difficult to think about ways to start paying the debt down.
By Carrie Reeder
If you are looking for a loan to consolidate your debt, you will need to qualify for the loan, just like any other loan. If you have a home, you may be able to get an equity loan using your equity or even go over the appraised value of your home in order to get the financing you need.
You may be able to qualify for an unsecured loan, which can consolidate your debt with one low monthly payment with no ties to any of your assets.
There are other companies that will help you manage your debt without having to use another loan. These companies usually charge you a fee and then help negotiate lower interest rates with your creditors and manage your monthly payments. There are various ways to do this and every company is different. Usually these techniques will save you money to start paying down the principle on your credit balances.
Some of these companies are definitely worth the small monthly fee, and can save you much more than they charge. But, some of these companies are not legitimate and can take your monthly payments and keep them for a month or more before they make your payments (collecting interest on the money all the while), causing you to accrue late fees and possibly collections. These companies can actually cost you money and make your situation worse.
Be careful when searching for debt consolidation companies to work with. Make sure they are legitimate, long standing companies before you sign on the dotted line. To see our list of recommended debt consolidation lenders click on the link below.
Consolidating your debt can provide great relief and breathing room when it comes time to pay your bills. Sometimes, when you are up to the hilt in debt, it can be so overwhelming just keeping up with your bills that it can be difficult to think about ways to start paying the debt down.
By Carrie Reeder
Federal Loan Consolidation Departments
Federal loan consolidation departments provide consolidation services to students who seek loans for educational purposes. Consolidation is a refinancing program providing an opportunity for the individual to convert outstanding education loans held by various lenders into a single new loan with a single monthly payment. This method of clearing up credit is a wonderful way to pay off the debt in full right now, while providing you with the crucial opportunity to pay off your loan to a new department with whom you have a fresh slate.
There are many federal loan consolidation departments in the United States. The US Department of Education offers a federal consolidation loan program called the William D. Ford Direct Consolidation loan program. In this program, the borrowers are allowed to apply for a loan consolidation provided an agreement is made to follow to the Income Contingency Repayment Plan (ICR).
The department of education offers loan consolidation services both online and on the telephone. The federal departments offer many loans such as the one under the Federal Family Education Loan (FFEL) program. For loan consolidation, you have to approach either the consolidation department of the lender or a federal education department.
If the borrower defaults on payments, then the consolidation department (Department of Education) reports this to the national credit bureaus. That causes damages to the borrower's credit rating, eventually inviting difficulties for the borrower to purchase a car or house. So the borrowers must keep in touch with the loan-servicing center so that billing statements do not go astray.
By Jimmy Sturo
There are many federal loan consolidation departments in the United States. The US Department of Education offers a federal consolidation loan program called the William D. Ford Direct Consolidation loan program. In this program, the borrowers are allowed to apply for a loan consolidation provided an agreement is made to follow to the Income Contingency Repayment Plan (ICR).
The department of education offers loan consolidation services both online and on the telephone. The federal departments offer many loans such as the one under the Federal Family Education Loan (FFEL) program. For loan consolidation, you have to approach either the consolidation department of the lender or a federal education department.
If the borrower defaults on payments, then the consolidation department (Department of Education) reports this to the national credit bureaus. That causes damages to the borrower's credit rating, eventually inviting difficulties for the borrower to purchase a car or house. So the borrowers must keep in touch with the loan-servicing center so that billing statements do not go astray.
By Jimmy Sturo
Federal Loan Consolidation Processing
Debt consolidation is a way of reducing your monthly payments by combining various loans to form a single loan. Lower interest rates and longer repayment periods are the main factors that contribute to reduced monthly payments. Borrowers prefer debt consolidation, as it is convenient to repay one loan within a stipulated period instead of several loans with varying repayment terms. The financial market is highly competitive and there are innumerable debt consolidation companies offering a variety of debt consolidation services. It can be an overwhelming experience to choose an appropriate company. Ideally, most borrowers prefer to consolidate their federal loans through a company that offers flexible repayment and affordable monthly payments.
Federal government strives continuously to improve the living standards of the citizens of the United States. They offer a variety of loans to people at affordable rates along with easy repayment options. The most commonly acquired form of federal loans includes student loans and FHA mortgage loans. The most popular types of student loans are the Stafford loans, Plus loans, and Perkins loans. Federal loans can be consolidated through federal consolidation programs namely, Federal Family Education Loan Program (FFEL) and the Federal Direct Loan Program. They can also be consolidated through private commercial consolidators. Typically, the borrowers have the option of applying online for consolidating their loans through these programs. Loan consolidation is not a very complicated process, though the borrowers are required to fulfill certain criteria to qualify for these programs.
There are no deadlines specified by the government for consolidating as long as borrowers apply within the grace period or during the repayment period. However, the borrowers can consult a financial expert to decide the best time for applying for the consolidation programs depending upon individual cases.
The entire process of application, loan processing and receiving a loan may require up to 90 days. After receiving a loan application, the consolidating company verifies the eligibility of the applicant and then contacts the respective lenders for confirming the outstanding amounts of the loans to be consolidated. After confirmation and verification, the interest rates to be applied are calculated and the ‘Disclosure Statement’ is drawn. The consolidating company issues the settlement checks to the lenders to close previous loan accounts. The disclosure statement is then offered to borrowers after the consolidation loan is approved. Borrowers are allowed to include new or existing loans in the debt consolidation plan for up to 6 months from the date of issue. However, the rates prevailing at the time of addition of new loans will apply and the consolidating company will re-evaluate the average interest rate applicable on the loan.
Debtors also have the option of consolidating their federal loans with an online consolidating company. Besides, the borrowers have the option of exploring consolidation options of several financial companies before actually deciding on any one of them. A good research goes a long way in eliminating any future financial complications. It is also very easy to apply for loan consolidation through the websites of these companies. Borrowers are required to fill up their personal details such as name, marital status, contact number, and details pertaining to loan amounts and income.
By Gibran Selman
Federal government strives continuously to improve the living standards of the citizens of the United States. They offer a variety of loans to people at affordable rates along with easy repayment options. The most commonly acquired form of federal loans includes student loans and FHA mortgage loans. The most popular types of student loans are the Stafford loans, Plus loans, and Perkins loans. Federal loans can be consolidated through federal consolidation programs namely, Federal Family Education Loan Program (FFEL) and the Federal Direct Loan Program. They can also be consolidated through private commercial consolidators. Typically, the borrowers have the option of applying online for consolidating their loans through these programs. Loan consolidation is not a very complicated process, though the borrowers are required to fulfill certain criteria to qualify for these programs.
There are no deadlines specified by the government for consolidating as long as borrowers apply within the grace period or during the repayment period. However, the borrowers can consult a financial expert to decide the best time for applying for the consolidation programs depending upon individual cases.
The entire process of application, loan processing and receiving a loan may require up to 90 days. After receiving a loan application, the consolidating company verifies the eligibility of the applicant and then contacts the respective lenders for confirming the outstanding amounts of the loans to be consolidated. After confirmation and verification, the interest rates to be applied are calculated and the ‘Disclosure Statement’ is drawn. The consolidating company issues the settlement checks to the lenders to close previous loan accounts. The disclosure statement is then offered to borrowers after the consolidation loan is approved. Borrowers are allowed to include new or existing loans in the debt consolidation plan for up to 6 months from the date of issue. However, the rates prevailing at the time of addition of new loans will apply and the consolidating company will re-evaluate the average interest rate applicable on the loan.
Debtors also have the option of consolidating their federal loans with an online consolidating company. Besides, the borrowers have the option of exploring consolidation options of several financial companies before actually deciding on any one of them. A good research goes a long way in eliminating any future financial complications. It is also very easy to apply for loan consolidation through the websites of these companies. Borrowers are required to fill up their personal details such as name, marital status, contact number, and details pertaining to loan amounts and income.
By Gibran Selman
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