debt consolidation

The Facts about Confronting Debt Collectors

January 3, 2015 by editor

If you are being harassed by a debt collector, it is important that you know that you do not have to deal with being threatened for money you aren’t even sure you owe. Everyone has rights according to the Fair Debt Collection Practices Act, or FDCPA, and you should be prepared to make good use of them.

When it comes to confronting debt collectors here is some useful information that you should be sure to take note of.

Best Ways to Confront Debt Collectors

When people think of collection agencies, nobody thinks of nice people. There’s plenty of information you should be aware of to prepare yourself for confronting debt collectors.

Don’t feel like you are required to respond to their calls. If you refuse to interact with them, it will be very difficult for them to bother you.
Written correspondence is the ideal method to contact them. If you do need to confront a debt collector, you will have written proof of any unlawful threats. Send them a letter via certified mail with return receipt, so they cannot claim that they have not received it.
If you want a specific person to stop contacting you, get their information and confront the collector directly, asking them to cease all contact. You can also direct them to your lawyer if you have one. They can still contact you to let you know that they will stop contacting you, but after that you should not receive any communications from them.

Your Rights When It Comes to Debt Collection

Though things may get intense when it comes to confronting debt collectors, there are many rights that most people are not aware of.

Collectors may not contact you early in the morning or late at night. You are also within your rights to forbid them from contacting you at your job.
It is your right to request a written document explaining exactly what you owe, to whom and what the options for paying it off are.
If the debt collector is stating that you have multiple debts to repay, first make sure that the claims are real before you decide to pay them off. If they are, it is your right to choose how much money to apply to each debt. A debt collector cannot choose how your money is distributed between the debts, and if you have confronted the collection agency and are in the midst of disputing the debt, they cannot apply any payment to it.
If a debt collector is persistent and ignores your demands to cease contact after you have confronted them, you are able to file a suit against them.

Your Obligations Concerning Debt Collectors

Although debt collectors can take advantage of people, it is important that you do not ignore any claims, as the ramifications can be very serious if they end up being legitimate. Consider these ways of keeping yourself protected and be aware of your own responsibility when it comes to debt.

Be sure that should a collection lawsuit be filed against you, you respond as soon as possible, even if you are not sure if you legitimately owe the debt. Even if you have had bad experiences with confronting debt collectors in the past, it is imperative that you take immediate action. If you fail to take action, you may find yourself facing jail time. When served, you should receive a packet that will contain your court summons and the details of the complaint. It is advisable that you contact the court right away and verify that you have indeed been summoned. There will be a deadline to respond.
You will have to agree or disagree to each individual item that is listed in the complaint. Should you disagree, you will need to state why.
Ignoring the complaint will cause you to automatically lose the suit, and your debt collector will win. This could be incredible risky, as debt collectors are able to take extreme action to acquire the money from you. A levy might be placed on your bank account, or your wages may have to be garnished to repay the sum. There will be no escaping payment of the debt, as your employer may have to provide part of your paycheck directly to the debt collector, or your bank may provide part of your account without your express permission.
Should you fail to appear in court, a judge may issue a warrant and have you arrested. Not paying fines will also be risking arrest.

Conclusion

Be sure to remain aware of all your responsibilities and rights when it comes to dealing with and confronting debt collectors. Failing to do so may cost you considerably and you may end up dealing with harassment that you could have otherwise avoided.

Should You Consolidate Your Student Loan Debt?

August 18, 2014 by editor

If you are one of the millions of people that have several student loans that you are currently paying on you might have considered consolidation. This option can certainly make your life simpler every month when it comes to remembering to pay everything that you have due, but it’s important to know some of the facts before you make the decision to consolidate your student loans. The usual consolidation loan for this type of debt is made through the Department of Education and, as with everything, there are good points and bad points to going through with them.

The Benefits of Trying To Consolidate Your Student Loans

Of course, the main advantage of going through with a loan consolidation for your school debts is that one monthly payment. This makes it much easier to get your loan paid on time. In addition, you might that they offer you payment plans that are more suited to your personal finances. One of these is even based on the income that you bring in every month, which is helpful when you might be having trouble making ends meet.

When you consolidate your student loans you might also find that you total payment is reduced. This is because they have longer repayment in general, so it gets spread out a little more. In addition, you may also fins that you have a lower interest rate to go along with it. Because they will switch you to a fixed annual percentage rate, you can find yourself in a much better position to get your loans paid off easier. This is also a good thing for you because it sets you up for the future well. It means that no matter what, you will always remain paying that interest rate, even if they go up later.

The last benefit of deciding to consolidate your student loans is simply that doing so will not affect your credit. This can actually work in your favor, as well because if you are paying several loans and keep paying them late or missing payments then you are already negatively affecting your rating.

Some of the Bad Sides of Trying To Consolidate Your Student Loans

Now that you understand all of the advantages of this process, it’s time to look at some of the ugly parts. After all, if it were good things, then no one would ever question consolidation. The biggest disadvantage of consolidating your student loan is that it can lead to you paying a higher amount in the end. Because consolidation can spread out your loans terms, your monthly payment might be lower, but it can add more interest to the overall amount.

In addition, while those fixed interest rates can be a good thing most of the time, if you enter your loan consolidation during one of the fluke periods right before national interest rates fall, then you are still going to be stuck paying that higher amount.

There is also one more thing to think about when you are trying to decide if you should take the step to consolidate your student loans. Check on your current loan holders and make sure that you that you aren’t getting any special bonuses for leaving the loan in their hands.

What Is The Right Choice For You?

Because of a new law passed by Congress, you are guaranteed to have an interest rate that is fixed for the life of all of your new student loans. The rate will be determined by the market and they will be set every June. This is good news, because even though interest rates can still be varied, you will know exactly what to look forward to when you sign on a new loan from now on. This does mean that the advantage of loan consolidation making your interest a fixed amount is now null and void though, as long as it’s a new loan that you are considering.

One of the more important things for you to consider is what you are willing to give up for the ability to be on top of your finances at this very moment. If you are having trouble making ends meet, then it can be helpful to consolidate your student loans. This is true as long as you remember that it will mean that you are going to be paying more in the long run in exchange for that lower payment. On the other hand, if you are comfortable with your payments as they are then you are better off keeping them as they are and just paying them off faster and with less interest.

There is a lot to keep in mind when you are trying to figure out the best route for your financial decisions, however hopefully this guide has made the decision a little bit easier for you to decide.

Nine Tips for a Debt Consolidating Loan

March 22, 2014 by editor

The majority of people will be familiar with ads for debt consolidation, which say they can “help you get out of debt quickly” and those that say they can “cut your payments by 50%”. A single loan with a lower interest rate and better payments is usually the end result of consolidating your high interest loans into one. However, things don’t always go as smooth, which is why you need to be familiar with some tips for a debt consolidating loan. These will not only give you extra info on choosing wisely, but can also save you from making the wrong decision! Read the following tips for a debt consolidating loan and get one step closer to making the right decision.

Order Your FICA Score and Credit Reports

The loans you get are based on your credit score, so it is important you know what it is. This is the first of tips for a debt consolidating loan, as if you find you have a reasonable credit rating and fairly good score, then you can consolidate your loans at an improved rate.

Check Out Other Options

Another one of the tips for a debt consolidating loan is to check out other options.

If you are after saving money, you may just want to consider paying off your debts as quickly as you can by arranging them.
You can go through your loans to check which has the highest interest rate.
Pay that off first and still make small monthly payments on other debts.
Contact credit card companies and discuss lower interest rates.
Consider consumer credit counseling. This has helped many with low-cost or even free counseling on how to prepare a budget and manage debt.

The Differences between Consolidation Loans, Debt management Plans and Debt Negotiation

You will find there are several companies online who claim they can decrease your payments as well as get you out of debt a lot quicker using consolidation loans. For this, they could be using several strategies, such as bankruptcy, debt management and debt settlement. Another one of the important tips for a debt consolidating loan is understanding the difference between the three.

Debt Consolidation Loan

This is where you borrow money and pay off other loans.

Debt management Program

This is when a debt management company or a credit counseling agency serves as the trader between your leaders and you.
It tries to negotiate decreases on your loan fees or interest rates.
A debt management program allows you to reduce your payments.
You then pay the debt management company or credit counseling agency each month.
The money is then distributed from here to your creditors.

Pay Off Your Debt Quickly

A debt consolidation loan can get you a lower monthly payment because you are spreading the payment over a lengthened time span. Paying off your debts as soon as you can is the best of tips for a debt consolidating loan.

Getting the Right Loan

A secured loan is one that is supported by a security benefit. Getting a loan that is secured is possible. A secured loan is usually secured lines of credit, second mortgages or home equity loans. These have a lower interest rate than unsecured loans, as they are less risky for lenders.

Comparison Shop

Never sign up for the first debt consolidation loan you are offered. Some tips for a debt consolidating loan cannot be avoided and this is definitely one! You need to get several quotes from numerous different companies and compare the terms and interest rates. Getting all quotes in writing is recommended, as this allows you to easily compare them.

Carefully Read Your Contract

Before signing anything, you need to read every word thoroughly until you understand it all. If you have any questions, make sure you ask them until you properly understand the answers, even if that means asking several times. Hiring a lawyer can also help with things that you need answers to.

Don’t Pay For Credit Insurance

Many lenders will try and pressure you into buying credit insurance. They may even force you so much that they say things like your application will be rejected or they could even hide the cost from you. If you experience yourself in this situation, you need to get out fast and file a complaint with fitting authorities in your state. Credit insurance can add a large cost to your loan, and usually offers very little security.

Finalize the Loan Process

Now it’s time for the completion of the application process, which should be straightforward, but can take some work and time. If at the end of the procedure, you find the loan rate is not as expected or based on what you were quoted, then you must ask why. After this, you can check with your next best options and during the whole process, make sure you are not taken in with the “bait-and-switch.”

What Are Your Debt Relief Options?

March 10, 2014 by editor

How does being in debt affect you? Are you one of the less financially responsible people to shrug it off and worry about it later? Are does it worry you, stress you out and make you feel anxious about the next month’s payment that is coming due in the next few weeks. The problem is, once people fall into debt they often cannot lift themselves out again, they become tied down and only continue to fall into more and more debt as the interest rates increase and the bills slowly start to rise month by month it starts to feel hopeless. However, there are some great debt relief options that are sure to keep you a float in your time of financial burden.

Transfer your Balances

If you struggling with credit card debt and have multiple cards, a great debt relief option would be to transfer the debt from the card with the highest interest onto the card with the lowest amount of interest. This will drop your monthly payment by whatever the APR percentage rate is on each card. If you do not own another card you could apply for what’s called a “0% interest balance transfer card” which would keep your debt with no interest for 6-18 months. Once your debt has become interest free, every payment you make towards your card will reduce the amount of money you owe, rather than partially pay for monthly fees. If your debts are low enough and meet your financial ability, you could even get yourself out of debt by the end of your promotional period with interest free payments.

Home Refinancing

Check your home equity, if your balance is high enough, you could possibly refinance your house and use the money to repay your debts. If you are new to equity and do not know what it is, let me try to explain, your equity is the cost difference between how much money you owe on your house, and how much money your house is actually worth. Let me demonstrate, if you owe $150,000 on your mortgage, yet your house is actually worth $225,000, you possess $75,000 in equity. If you take a new mortgage out on your house for, let’s say, 90% you would then get $60,000 in return. You could then turn that money around and pay off whatever debts you have. Remember to be careful here, this will set back how soon your house will be paid off and will alter your future budget, so make sure to put in the proper consideration before choosing this debt relief option.

A Second Mortgage, or “The Homeowner’s Line of Credit”

If you decide not to refinance your home, another debt relief option you might consider is taking out a second mortgage on your house. This is also known as “Homeowners Line of Credit”. However, this also has to do with home equity. If you have not lived in your house for over 10 years you may have little to no equity at all. This is due to the high interest rates, in the first 10 years you are not really paying the balance down on the house. But, you’re paying interest and mortgage fees instead. If you have been in your home for over 10 years, or made a rather large down payment, you might have enough equity in the home to take out a second mortgage. This is definitely a good debt relief option as it will give you a boost in cash to pay off your debts.

Lower Your Monthly Spending

Many people find themselves in financial situations and often do not realize that it simply comes from their monthly spending habits, even if it’s the occasional bag of chips at the corner store throughout the week it could be adding up to over $100 a month. It is important to make a budget and keep track of how much money you spend on food, clothing and any other bills throughout the month. Once you have made a note to pay attention to wear your money is going every month, you can try to make some cut backs in certain categories in your budget. Although this is not quite a debt relief option, it is still a great way to help yourself out in financial times as it will take any extra money from your budget and put it back in your pocket.

Debt Settlement

Debt settlement, also known as debt negotiation, debt arbitration or credit settlement, is said to be the best debt relief option. If you are seriously in debt, say 5 or 6 months behind on payments, that’s when you should approach your creditors and offer to settle all your debt for something less than what you actually owe. Please note that there have been cases where 50 to 60 percent of debt has been settled this way.

Whatever debt relief option go with, make sure you understand every pro and con of it. It’s better to wait for another month than jump to a decision that would lead you to even more in debt.

Tips To Avoid the Risks of Debt Consolidation Loans

October 16, 2013 by editor

Taking out a loan is a tempting choice for solving financial woes but there are risks of debt consolidation loans. This is a single loan for the total of all bills that you would like to pay off. Using this loan you eliminate all individual bills and instead pay one loan monthly.

Usually the debt being paid off is credit card related with high interest rates so when paying minimum balances you are paying only the interest. The principle remains and you are not really paying down the debt. With lower interest you are able to actually chip away at your core debt. Debt consolidation loans generally allow you to pay over a longer period as well thus making your monthly contribution smaller.

The Risks of Debt Consolidation Loans

Knowing the risks of debt consolidation loans will help you avoid creating more debt while you’re working to pay off the original.

Hazard 1: Feeling free of debt.

Paying off the credit cards that have been hanging over you is a great feeling but that zero balance can give the false sense of being bill free. You still have to pay just as a single loan instead of many smaller bills.

Hazard 2: Repeating Old Habits

If your reason for getting a consolidation loan is overuse of credit this warning is for you. Now that the cards have so much equity available, you may be enticed to begin using them again. If you can’t control your spending you may end up running up the same card you are still paying off with your loan. The best way to avoid this is to close off your accounts save for one. The single open account can be used sparingly and paid off in a timely manner to fix your credit score or if your score is still intact this card should be kept somewhere you cannot use it for impulse purchases.

Hazard 3: Check that interest rate

If your credit is good or you are able to provide collateral you can benefit from the lower interest discussed earlier. If, on the other hand you have no collateral to put up and your credit score is already low you run the risks of debt consolidation loans interest being higher than that of the original debt and ending up owing more than you did originally. Be certain to investigate more than one lender and various solutions before committing to something that will not significantly lower your current payments.

Hazard 4. Collateral can be the highest price to pay

The greatest equity most people have at their disposal is that of their home. Risking your home for a loan means if you are unable to pay back the loan for any reason you will lose your house. This is true no matter what you use to secure your loan however it is one thing to lose an automobile, piece of jewelry or other valuable, it is a devastating loss to say goodbye to the sanctuary of a roof over the head of your family.

Take some time to seriously consider whether you can avoid these risks before taking the plunge. There are other ways and it is best to investigate each fully and making an educated decision.

Debt Consolidation Loans CAN Work For You

Now that you have considered the risks associated with this type of loan we can discuss the ways you can make it work for you. One useful point is that consolidation loans can be used in a much more flexible way than debt management or settlement which are far more limiting as to the types of debt you can pay with them. Secure loans cannot be included in other debt payment types but loan consolidation can take them under their umbrella as well as loans that not even bankruptcy can forgive such as Federal Student Aid.

Having looked at both the possibilities and risks of debt consolidation loans if you believe this is the right choice for you here are some tips for making the most of the program:

If the interest is not lower than your current interest keep looking. There are many options such as payday loans, peer loans, secure and personal loans. Do not jump into the first one you check, make sure you’re getting the best possible rate.
Be sure you’re eligible for the right loan. Good credit and a steady paying job are essential.
Be prepared. Unlike other programs there is no one there to guide you along the way. Go in with a payment plan and stick to it.

The most important to do is to learn from the situation and avoid repeating mistakes. If you are aware of and avoid the risks of debt consolidation loans you can get yourself out of debt.

Consolidate Your Debt: Different Ideas

September 23, 2013 by editor

It is important that you know how to consolidate debt if you are going to find the right solution for you. There are some great reasons why it is important that you should look into the possibilities of debt consolidation.

You will only have one bill to pay each month
The payment will stay the same
Interest rates should be lower
The overall cost of the debt should be reduced

There are a number of different ways to consolidate any debts and it is vital that you choose the right option for you. It is not going to be easy and it might take a bit of hard work but if the end result means that you are better off each month then it will have had a positive impact.

Reason Why to Consolidate Your Debt

It is important that if you are considering consolidation that you understand the reasons for consolidations and the final product that you are offered suits your needs and reflects in a positive manner on your credit file. You should not be paying more each month for your consolidation loan and you do not want the term to be longer than five years to be completely debt free.

There are many different options that are open to you if you are looking at how to consolidate then you might consider what options that you have available to you.

Approaching a Credit Card Company

You might be able to get a balance transfer to your current credit card, ask them for the best interest rate if you were to transfer and ask if they will not charge a fee. If they don’t offer you any savings tell them you will go elsewhere they might help you.

Do not apply to loads of different credit card companies because this will be recorded on your credit file and will have a negative impact. Always make any repayments on time because you might end up increasing the debt rather than reducing the debt.

How to Consolidate Debt with A Home Equity Loan

This consolidation loan means that you are borrowing money on any equity that you have in your home. This is the value of your home less any mortgage that you have outstanding, if you have equity then it is possible to turn this into a loan, but if you fail to keep up the repayments you can lose your home.

Refinance

It is possible to refinance your home and take out extra money with which you can pay off your bills and this will save you money each month. But you will be paying for the bills over the entire length of your mortgage.

Debt consolidation loans

It is possible to consolidate by using a consolidation loan, these can be more expensive and if you have a lot of debt they might not be the best option for you. The repayment might be higher and the interest rate might be higher too. Or the term that they are looking to hold you for could increase to 10 years and this is a long time. It is important that you know the true cost of the loan including the interest payment.

Credit counselling

It is possible to learn how to consolidate debt by going to a counselling service and they will help you to budget and work out a payment plan that will pay off your creditors. Some counselling services pays your debts and you just pay them once per month, check if you company is going to do this that they are reliable, if a late payment happens you will get the mark on your credit file and not the counselling company.

Settlement companies

It is possible to get a company that will act on your behalf to reduce the total amount of money that you owe. You pay the company the money that you would have normally paid your creditor and they work out a settlement figure and this is sometimes a lot less than the original debt, but this will have a negative impact on your credit rating.

Borrow against retirement

If you have saved up for your retirement it is possible to borrow money against the money that you have saved. It will mean that you have not touched your retirement money but have still had a relatively low interest loan.

Rapid payment

There are many different names for similar practices of how to consolidate debt without going to other companies but doing it on your own.

You need to list the debt that you have and with the highest interest debt pay that one more each month until it is paid and you move onto the next debt and focus any extra money there. You just need to stop using any form of credit until you have taken back control.

Therefore it is possible to take control of your finances and get the best product that suits your needs.

Debt Consolidation Traps to Avoid

September 14, 2013 by editor

When an unexpected event, such as a temporary drop in family income or an unexpected medical emergency leaves a family with a pile of high interest short-term debt, a debt consolidation loan can be a real advantage. A low interest consolidation loan can improve the family’s monthly cash flow position, and can actually help protect the family’s credit score by heading off the potential accumulation “negative events” on the family’s credit report. Debt consolidation loans can often be paid off ahead of schedule when the emergency that made the loan necessary has receded into the past and financial stability has been reestablished.

That’s the bright side of the debt consolidation story. Unfortunately, statistics indicate that debt consolidation loans seldom work out that well.

Debt Consolidation Loans Are Profitable and Easy To Sell

An underlying cause of most of the debt consolidation traps that cause the majority of debt consolidation loans to do more harm than good is that the people who really need a debt consolidation loan usually have already damaged your credit scores. As a consequence, they can’t get debt consolidation loans from low-cost lender such as banks. A large and highly profitable industry has grown up around making loans to borrowers that must have a loan right now without regard to the interest rate or terms. Specialized debt consolidation lenders know that a portion of the loans they make will be end in default. To ensure their own profitability, they spread the cost of those defaults across all the clients who use their services.

Debt Consolidation Loans Usually Increase the Borrower’s Total Debt Obligation

The higher interest rates and extended loan terms that are parts of most debt consolidation loans made by specialized debt consolidation lenders, may help solve the borrower’s immediate financial crisis, but they are the direct cause of one of the most serious of the debt consolidation traps. Debt consolidation loans almost always end up producing a significant increase in the borrower’s debt repayment cost. If the borrower’s income does not increase fast enough to absorb those costs, they will inevitably end up further in debt.

If The Problem Is Lack of Financial Discipline, a Debt Consolidation Loan Won’t Help

While short-term emergencies often play a role in creating the need for debt consolidation loans, the underlying reason loan is needed is often lack of discipline in making financial decisions. This lack of discipline shows itself in the form of bad spending decisions and the failure to allocate enough (or any) money to savings. The debt consolidation loan may resolve the short-term emergency, but it usually has no effect whatsoever on the borrower’s financial discipline, leading to another of the debt consolidation traps to avoid. The same pattern of bad spending decisions and failure to save will sooner or later result in the borrower once again maxing out available credit and having to take on additional debt.

Using the Family Home to Secure a Debt Consolidation Loan

Of all the debt consolidation traps to avoid, using the family home to secure a debt consolidation loan may be the most dangerous. While securing a debt consolidation loan with the family home may provide the borrower with a better interest rate on the loan needed to manage the current financial crisis, the threat of losing family’s principal financial and psychological asset, will make the borrower all the more vulnerable to predatory lenders when the next financial crisis arrives.

Avoiding Debt Consolidation Traps

When used correctly, debt consolidation loans can be very useful in managing the family’s finances. As discussed above however there are many debt consolidation traps that can make a family’s financial situation worse than it was before they consolidated debts. Here are some guidelines for avoiding those traps:

If you find yourself caught in an upward spiral of debt, find a reputable nonprofit debt counseling service in your community and take full advantage of their services.
Take advantage of the experience of a qualified debt counselor to help you bring the realities of your family’s financial situation into focus.
Make sure you understand the relationship between your family’s regular living expenses and total income. This understanding forms the basis for developing a livable family budget, and determining how much money is available for debt service and debt reduction.
Take advantage of a debt counselor to examine all possible debt management approaches.
Get a copy of your current credit report, and review it to make sure there are no errors. If there are errors, all credit rating agencies have procedures for disputing in resolving them.
Make sure you understand the factors that damage the credit score, and the long-term steps your family can take to improve its credit score.
Before signing any contract for loan consolidation services, make sure the service provider is fully accredited, and check with the local Better Business Bureau to determine how the service provider compares to others in the community.

Consolidate Private Student Loans: Is It Right for You?

September 6, 2013 by editor

If you are one of the many Americans who have accumulated multiple student loans from both federal and private sources, you may be wondering if it would be wise to consolidate private student loans, especially if your current situation requires making monthly payments to multiple lending agencies with different due dates.

Reasons for Consolidating Private Student Loans

There are many valid reasons to consolidate private student loans. Some of these include:

You may be able to eliminate high interest loans.
You may be able to reduce the number of monthly payments.
You may be able to extend the length of the combined loan, thereby reducing the monthly payment.
You may improve your credit report and score by reducing your risk of inadvertently missing payments.

The best time to consolidate private student loans is before you have missed any payments or been declared delinquent on one or more of your loans. These events will seriously hurt your credit score, and make the decision to consolidate private student loans more expensive or even out of reach entirely.

Downsides of the Decision to Consolidate Private Student Loans

While the decision to consolidate private student loans carries many potential benefits, there are a few potential downsides to consider, including:

Consolidating your private student loans and extending the loan term in order to achieve a more affordable monthly payment amount can substantially increase the total amount of principal plus interest you will end up paying.
Multiple attempts to consolidate private student loans, especially when subsequent consolidation efforts include other types of debt may actually damage your credit score, particularly if one or more applications are denied by lenders.

Consolidating Your Federal and Private Student Loans

In most cases, federal student loans have lower interest rates and much more flexible terms and private student loans. If you have more than one federal student loan to payoff, it may be possible to consolidate the federal loans without sacrificing their low interest rates and flexibility. It is almost certainly unwise, however, to pay off a federal student loan with the same loan you use to consolidate private student loans. The necessity of making two separate payments is almost always worth the extra effort.

How to Get Started When You Decide To Consolidate Student Loans

Your advanced degree in Archaeology or Medieval English Literature are no doubt worthy accomplishments of which you are justifiably proud. The courses required to attain those degrees, however, probably did little or nothing to advance your personal financial management skills. If managing your student loans and other debts has become difficult given your current salary, it would almost certainly be an advantage to seek advice from a nonprofit debt counseling service. Here are couple of ways a debt counseling service can help:

The debt counselor can take an objective look at both your income and debt payment burden, and help you develop a realistic monthly budget that contains an allocation for debt repayment.
If the amount available for debt repayment is too small to service all outstanding debts, the debt counselor can advise you as to all of your alternatives, including consolidating your private student loans.
If the decision to consolidate private student loans is really right for you, the debt counselor can help you obtain a copy of your credit report, and advise you as to the interest rate and terms you should look for when seeking your consolidation loan.

Here Are A Few Things Look For When Selecting A Debt Counseling Service:

Beware of service providers that guarantee they can solve your debt problems before they have reviewed your finances
Make sure that both the debt counseling service and the individual debt counselor you work with are accredited by a national trade association.
Claims that seem to be too good to be true probably are. Unfortunately the credit counseling business has attracted more than its share of unscrupulous operators. It takes time for regulators and trade associations to weed out the bad actors. You are probably safer using a debt counseling service that has been in business for at least 5 to 10 years.

When you are ready to begin selecting a lender to consolidate private student loans, be sure to interview each loan officer you might work with carefully before filling out an application. Bring a current copy of your current credit report with you, and tell the loan officer what interest rate and loan terms you want. Ask if there are credit score thresholds required for the kind of loan you are looking for, and if your current credit report and score would satisfy those thresholds.

Finally, in all likelihood the loan officers you interview will be dressed in appropriate business attire. No matter what your current employer requires for work clothes, try to arrive at each interview dressed in a manner that will instill confidence in the loan officer you are meeting.

There Are Ways to Consolidate Debt without Breaking Your Bank

August 7, 2013 by editor

If you have many credit cards with debt on them life can be complicated. Outstanding debt can take over your life- depriving you of things that you would have otherwise liked to do with your money. It often takes a long time to pay these debts off. Some people moreover have debt on a large number of cards, for instance seven different cards. But, despite seeming like a daunting task, debt consolidation is possible. It will take some time to consolidate and pay off your debt, but there are a few ways to consolidate debt that you should explore in order to get out from under debt.

Use Debt Consolidation

Debt consolidation is a one of the most efficient ways to consolidate debt. This involves procuring a loan to repay all your outstanding debt so that instead of several high interest debts you have just one loan to pay off. High interest credit card debt, education loans and outstanding utility debt can be included in this loan, while mortgages cannot. Debt consolidation can be done by:

Major Banks
Non-profit debt consolidation companies
Credit Union

Ways to Consolidate Debt It is a good idea to compare several debt consolidation loans before you decide on one as sometimes debt consolidation companies charge high fees in order to consolidate debt and this may add to your existing debt. However, banks or credit unions have lower interest rates on loans and lower fees. While you do need to demonstrate an ability to pay back your debt consolidation loan and steady income, getting a debt consolidation loan is fairly uncomplicated. Your debt consolidation agency will pay off all your debt on your behalf and you, then, will only have to pay one loan off at a lower interest rate than your credit cards.

Bank on Your Home

If your own your own home, use the equity you have on your home to pay off your outstanding debt. You can borrow, with a home equity or a line of credit, borrow up to 30% of your home’s value. Home equity loan and a home line of credit is a way to unlock the value in your home to solve debt issues. A home equity loan is a close-ended account that has to be repaid over a certain period of time while a home line of credit is an open-ended account like a credit card against which you can repay and borrow against. Home equity loans tend to have higher borrowing limits and low interest rates. This is beneficial as interest rates on home equity or a line of credit is way less than APRs on credit card balances. However, using the value of your home to pay loans does have its risks. If you forestall on payments you could put your house at risk. You may end up with home foreclosure, putting you in a worse position than before.

Borrowing from a Life Insurance Policy

Although this should not be your first choice, borrowing against a life insurance is a viable and preferable option than being bankrupt. You can borrow the cash value of your life insurance and use it to repay your high interest debt. You have to consider, though, that there is an interest on this loan (like any other loan) that needs to be paid at regular intervals. Remember if the loan is not repaid then you will no longer have life insurance for your loved ones after death.

Balance Transfer to other Credit Cards

If you have a card with a big credit limit or are being offered one, consider transferring any outstanding debt to the one with a higher limit. Most companies that you consider moving to will offer you a low balance transfer interest rate, therefore by moving debt you will be saving money. By saving on interest, you may be able to pay debt back sooner.

Borrowing from Retirement

Remember that over all your working years, you paid into your retirement? You can get an advance on this retirement money. But, this really should be a last resort option because the amount has to be paid back over five years. Any money that is not paid back is considered early withdrawal and the amount is subject to income tax and penalty. If you retire the loan must be paid in 60 days or early withdrawal penalties will apply.

What’s Negative about Consolidating Debt

Debt consolidation can provide you with peace of mind and better credit ratings, but each has its benefits and harms. Know the benefits and harms of the debt consolidation method you choose and be sure to pick one that will get you out of debt rather than one that will push you deeper into it.

It is good to know about the several ways to consolidate debt as high interest debt can destroy your lifestyle. But, it is only viable if you are disciplined enough to pay off any debt consolidations as well and you make considerable effort to change your habits to pay off all debts.

Utilize Your Debt Relief Option To Achieve Success Inspite Of Debt

June 21, 2013 by editor

Being in debt does not mean it is the end of the world for you. If you react to it correctly, it might be the catalyst that will help you achieve elusive financial success. You may be surprised that there are millionaires and billionaires who once declared themselves bankrupt. They were able to rise from the ashes of their financial ruin and emerge victorious and happily rich at present.

That can be your success story. If you are wondering how to do that, pay attention to what we will discuss in this article.

First of all, you have to accept that there is something wrong with the way you are living your life. If you got yourself in debt, that means you have been living beyond your means. You have to correct that so you no longer incur debt.

Once that acceptance is solidified, you may want to consider the options that you have to achieve debt freedom. If you want to be successful in life, you want to make sure that your option will not harm your chances to improve your personal wealth. Usually, that means you have to take care of your credit score. It will allow you to gain better deals in loans that you can use to improve your income. After all, this is commonly included in the background check that employers makes for applying employees. It can also open up business opportunities that you may want to set up.

Debt consolidation is your best option at this point. It will provide you with a more structured payment scheme that will eventually assist you in paying down what you owe. If you chose debt consolidation loans, your score will slightly dip as your debt amount increases. However, once you have paid off the other loans with that new loan, your score will improve again. In debt management, it is usually not reflected in your credit report.

Another great thing about this debt relief option is it lowers your monthly payments. You can use the freed amount to grow your savings and to invest it in a business venture. As you grow your income, you can make bigger monthly payments and that will help you get out of debt a lot faster.

Since this debt solution will not reduce your debts, you will feel the full impact of your debt payments. If you work hard to get out of debt, it will leave a more lasting impression on you. That hardship will keep you from incurring more debt or landing yourself in another debt situation. This is very important because you have to learn your lesson. Some people who went the easy way out did not feel the full impact of how debt can ruin their lives. They did not mend their ways and soon ended up in debt once more.

As you pay off what you owe, you need to identify the lessons that you have to learn to keep away from another debt situation. These involve saving, budgeting, smart spending and the overall living within your means state of mind. This is what will fuel the success that you wish to achieve in your life.