So you’ve got a mountain of debt and you’re looking for a way out. Sweeping it all up into a debt consolidation loan seems like the most painless way to solve the problem,but before you sign on the dotted line,you need to know whether going through with debt consolidation is going to really help you or not.
The Benefits of Debt Consolidation
1) Instead of writing checks for all your separate bills every month (and remembering to write the bills),you have one bill to pay. If you have trouble remembering due dates and getting all your bills paid on time,debt consolidation can make your life a lot simpler.
Remember,every late payment can cost up to $40 or more,and late payments also do significant damage to your credit rating. Enough damage to your credit rating,and you’ll find your interest rates soaring.
2) If your credit is still good,you can probably get a lower rate on a debt consolidation loan than what you’re currently paying (especially if you have a lot of credit card debt). With the lower interest rate,more of your hard-earned money will go to paying down principle,so you’ll be out of debt sooner.
The Drawbacks of Debt Consolidation
1) A debt consolidation loan won’t change your spending habits.Debt consolidation can fix the symptom: too much debt,but it can’t fix the underlying cause: You spend more than you earn. Unless you do debt consolidation along with a major change in how you spend (and,hopefully,earn) money,you will continue to rack up more debt.
2) If you do continue to rack up more debt,you will end up in more trouble than before you consolidated your debts.This second drawback to debt consolidation is a bit odd,but it happens to thousands of people: Debt consolidation can seem to make the debt problem disappear,but as soon as it’s “gone” they create a new debt disaster.
The recently-unburdened are suddenly paying less and are finally current on their bills. After all the debt-ridden days are over,it’s hard not to celebrate… by spending more money. So debt consolidation’s benefits can turn into major problems because they take the pressure off. For some of us,it’s the pressure of our existing debts that keeps our spending in line. Remove that pressure,and we go right back to overspending.
3) Getting a bad debt consolidation loan.Here is a short list of things to avoid in any debt consolidation loan.
– Variable rate. This means the interest rate can change any time. Which means that you could end up paying more than you do now.
– Two-cycle average daily balance. A credit card term that is not your friend.
– 20-day billing cycle (versus the standard 30-day billing cycle). Another credit card term that is not your friend.
– Finance company loans. Wolves in sheeps’ clothing.
– Any lender that offers you a large (over $5000) loan without a significant credit check,on the condition that you make a hefty fee up front.
4) Falling for a debt consolidation scam.These aren’t just “bad” loans – they’re full-fledged fraud. The tricks include:
– Pretending to be a non-profit debt counseling service. If the lender won’t send you a copy of their IRS approval of non-profit status letter,move on.
– Saying they will negotiate a debt consolidation loan for you,so you can use the money to pay off your debts. They tell you to start sending them money every month. You send it. They don’t pay your creditors. You get deeper (MUCH deeper) in debt.
– Contacting you by mail or email,offering you the best deal you’ve ever heard of. If it sounds too good to be true,it is. Respectable finance firms do not send unsolicited email,or even direct mail. They get word of mouth referrals.
5) Getting a fair debt consolidation loan,but not changing your spending/saving/earning habits.This is the double-whammy of con #2. For example,say you take out 80% of the equity in your home to pay off your scorchingly high-interest credit cards. But then,instead of rigorously keeping to the budget you made up,you continue to buy things and you give in to all the new low interest credit card offers that come in the mail. You swear to yourself that the big raise will come any day and your income will double.
Instead,you get fired. Within two months (remember,you never saved any money) you can just barely pay your mortgage,much less your home equity loan,much less your new credit card bills. After a few late payments,the new credit card interest rates vault up to 30% or more,and you stop paying them altogether,along with the home equity loan. The bank can now take your house.
Compared to this scenario,it would have been better to have stayed under the old “mountain” of debt (which now,comparatively,looks like a small hill) and learned the slow,hard lessons of frugal living and finding happiness in life in ways that don’t require spending.Read More
By John Sage Melbourne
Unlike the Misdirected Combatant that doesn’t invest due to false information,the Closed Minded Combatant doesn’t invest due to a shut attitude. The Closed Minded Combatant has a set psychological as well as psychological setting regarding wealth associated subjects as well as will not listen to anything in contrast to what they already believe.
The most convenient way to acknowledge a Closed Minded Combatant is by the top quality of discussion that you can have (or otherwise have) with them regarding cash,spending as well as wealth. They will usually be fairly opinionated in their views on economic subjects as well as might even be judgmental at times (particularly of those that are already wealthy or doing monetarily far better than themselves). Any kind of view you introduce that contrasts theirs will be rejected,negated,or sometimes violently opposed. At other times,they might not even hear your comments in any way! A discussion with a Closed Minded Combatant will be at finest like speaking with a block wall,as well as at worst like taking part in a heated dispute regarding which of has a much better take care of on ‘truth’.
Adhere To John Sage Melbourne for a lot more experienced property investment guidance.
However there is a 2nd kind of Closed Minded Combatant that is far more amiable,as well as for that reason a little bit harder to acknowledge. This kind of Closed Minded Combatant will not argue with you in itself,however they will stay shut in their attitude as well as perspective however. They will permit you to have your ideas regarding cash,spending as well as wealth,however they will stay strongly encouraged in their very own limiting ideas. They are not near the idea of wealth as a basic principle,neither are they near wealth being created in your life or the lives of others. They are just enclosed their attitude as well as ideas regarding developing wealth in their life.
Sometimes,it can likewise be tricky to compare a Close Minded Combatant as well as a Misdirected Combatant. They can usually appear similar in numerous methods. This is due to the fact that the Close Minded Combatant is likewise driven by erroneous presumptions,false information,as well as limiting ideas. The primary distinction is that the Misdirected Combatant doesn’t know any kind of far better,whereas the Close Minded Combatant doesn’t even wish to know any kind of far better.
The very best strategy to take with a Closed Minded Combatant is to leave them alone. You will get no place if you demand speaking with them regarding anything economic. If they take place to be a pal or enjoyed one,then speak with them regarding anything else aside from wealth as well as cash associated subjects.
For more details regarding developing your wealth state of mind,browse through John Sage Melbourne here.Read More
What are Unsecured Debt Consolidation Loans?
An unsecured debt consolidation loan is the unsecured way to combat with your unmanageable debts with proper monetary support at the right time. Consolidating a debt means reducing various bills and monthly payments into one affordable monthly payment so that you can pay off your loans,credit cards,store cards or other debts. Unsecured consolidation loans are intended to please creditors by paying all your previous pending loan repayments off and to empower you to gain some financial independence back into your life. Anyone taking on an unsecured debt consolidation loan should be very comfortable in their lives in regards to any health issues,loss of job or any other unfortunate financial surprises that would remain able to make the payments for some time on a new debt consolidation loan.
Several benefits to Unsecured Debt Consolidation Loans?
Unsecured debt consolidation loans are granted by banks and other financial institutions. Unsecured debt consolidation loans are available to borrowers at competitive interest rates which may be slightly higher in comparison to secured loans,but their faster approvals makes them a perfect solution to possibly end your debt consolidation needs. This is definitely useful information for the good credit candidates but unfortunately many of people who need to consolidate their debt do not have the credit score and/or income to qualify for a loan although the debt can be paid back in full through credit counseling if that is the option you chose to take. There are many debt management techniques for several solutions available to help you to recover from debt such as; budgeting,debt consolidation or debt negotiation to name a few to consider.
Debt Management Programs that deal with unsecured debt consolidation loans may be able to dissolve your debt in 3 to 5 years,whereas you might be paying a secured loan off for 15 years or more. Make sure to keep in mind if you are taking a debt consolidation loan and clearing off all your debts your problems will not disappear overnight this is just a means to helping you. Unsecured debt consolidation loans merge all your debts into a single monthly payment of reduced amount. The alternative to paying your bills with high interest rates is that you could find yourself spending a fortune on making interest payments each month,with each of the creditors taking a chunk of your repayment by way of interest,but you could also find that trying to juggle a variety of repayments could become very confusing which could affect your credit rating.
Unsecured debt consolidation loans do not put forth to any assets,and these are ideal for those that do not own their own home,or do not wish to put their home at risk. Unsecured debt consolidation loans are perfect for tenants or renters who do not have any property to keep as a security against the loan. Ultimately your decision to choose debt consolidation loans or a consumer credit counseling program to consolidate credit card debt or any debt should be based on your own personal financial situation and what you can handle.
Unsecured debt consolidation loans that have low interest rates give you the consumer an advantage with saving your hard earned money,which you can be used for other potential purposes. Depending on whether you take out a secured or unsecured debt consolidation loan,some of your unsecured debts may become secured debts so keep that in mind when evaluating your debt situation. Also people with bad credit who are in need of debt consolidation have three basic options to consider: a secured debt consolidation loan,an unsecured debt consolidation loan,or enrollment with a debt consolidation company. Choose the best option to fit your financial needs by starting to rebuild your credit history and hopefully reviving your life to avoid anymore stressful credit or debt downfalls.Read More
It is unlikely that while growing up you would not have heard that there is strength in unity. Well since this age old saying has braved the test of time,there must be truth in it. It is interesting that the validity of this statement is applicable to repayment of loans also. Secured debt consolidation is a type of debt repayment plan which give you an open invitation of becoming debt free at your terms.Reduce Your Debt by 50%
Secured debt consolidation is a way to consolidate debt when you have security to pay for the loan you are borrowing. When it comes to secured debt consolidation loans there is no single scenario which can work for everyone. Since the debts you owe might not be the one that someone else owes. Secured debt consolidation loans are possible for every borrower who has multiple debts like credit card debts,medical bills,unsecured loans etc.
Secured debt consolidation loans would require a security in the form of real estate (like home or any other property),car,stocks and bonds,and any other acceptable collateral. Loan amounts above Â£5,000 usually require consolidation of funds. With secured debt consolidation loans you will find many lenders eager to offer you a programme for they have the advantage of having their money secured. In return you get lower interest rates and flexibility with repayment terms. However,nothing comes without a disadvantage. With secured debt consolidation loans – you stand with losing the asset you have placed as collateral in face of non repayment.
In reality debt consolidation loans are very beneficial. Your secured debt consolidation loan will have lower interest rate than what you are currently paying on all your loans. The monthly payments with secured debt consolidation loans are also low. However,this may or may not be the case. Monthly payments are dependent on your loan term. So in case you want to lower monthly payments,you can extend the loan term. And in case you want to get over the debt burden faster you can shorten the loan term. The monthly payments here will be more. This means that don’t always go by lower monthly payments for secured debt consolidation loans. Always look for lower interest rates when opting for secured debt consolidation loans.
Its tempting to have all your previous debts packed into single loan but do you really know what it takes to consolidate debts. The worst thing while getting secured debt consolidation loans is to apply for them and forget about it. The loan lender who says that “we will take care of the rest” or who “promises to reduce your debt by 50%” is seriously not going to work for you. The fundamental things with secured debt consolidation loans or any consolidation is that it would “not” reduce your debts. Secured Debt consolidation is a way to payback your debts before you find bankruptcy as the last resort.
For secured debt consolidation loans,you make single monthly payment every month. This one monthly payment pays for the loans that you owe. Also your debt consolidation loans lender will be addressing your lenders henceforth. However,in case lenders would like to contact you regarding anything – be open and talk openly to them.
Making secured debt consolidation loans work is making your personal expenses fact file in regular check. Refrain from taking loans until you have cleared all the previous debts. Make sure you are learning how to manage your money and keep a close watch on when and where your money is going. Pay your monthly payment on secured debt consolidation loans on time. Otherwise your credit situation will suffer. No debt is good or bad debt in itself. It is how you use it that makes it good or bad. So if you are stuck in bad debt situation,it is probably you. Your habits with debt and debt management have obviously not been promising. With secured debt consolidation loans you can learn debt management while repayment debts.Read More
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