Debt Help Debt Consolidation Services Debt Management
debt help debt consolidation services debt management
Debt Consolidation – Merge Debts and Save Money
Bankruptcy or insolvency should be the last resort for any borrower. You should explore other options like individual voluntary arrangements, debt consolidation, etc., before filing an application for bankruptcy. If you are debt-ridden but hopeful for the future then there is no need to take such an extreme step by filing for bankruptcy.
Many people have successfully recovered from bad financial situations by smartly managing their debts. You can request your lenders to allow some extra time for repayments. If you think that lenders would not heed to your request or that you have already exhausted such an option, there is still a chance to recover. You can approach an independent financial adviser and request him to help in consolidating your debts. There are also many debt consolidation companies that can help you in negotiating with the lenders and trying to work out some possible solution.
Debt consolidation loans not only help those who are facing serious problems in repayment of debts but it is also a wonderful tool of financial management in the hands of habitual credit card users. It cannot be said that debt consolidation loans are taken only by those who are in serious trouble over repayments. For many people, it is a regular affair to consolidate their credit card debts once the festival season is over after Christmas and New Year Eve.
In the UK, debt consolidation loans are extensively used for merging the debts that arise during the course of festival season. People often overspend during festivals by using their credit cards and store cards. Besides, many people also take short term loans for enjoying Christmas vacations abroad. These debts are often consolidated in order to avoid high interest rates and also to get the convenience of a single repayment every month.
If you are ready to pledge your home, a debt consolidation loan of upto £250,000 can be obtained. However, people who have smaller requirements or those who do not want to pledge their homes can apply for unsecured debt consolidation loans. These loans may allow you not more than £25,000. Usually, these loans are taken by people who want to consolidate their small debts arising from credit cards and store cards.
Debt consolidation loans give you a better control over your finances. After consolidation, you are very much in command as far as your repayments are concerned. You can easily manage your monthly outflow of income that is used to service your debts.
About the Author
The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. She has done her masters in Business Administration and is currently assisting Loans-Bazaar as a finance specialist. For more information visit on Secured Loans visit www.go4ukloans.co.uk
Learn The Differences Between A Debt Consolidation Loan And A Debt Consolidation Service
Youve heard the ads on radio and television, especially during this recessionthe offers of debt consolidation for people who have built up too much debt and who have a bad credit rating or who even face bankruptcy. Perhaps you have thought about debt consolidation as a way to reduce your debt and start saving again, or even to forestall foreclosure or bankruptcy.
But there are so many programs and so many offers! The number of scam artists is growing, and consumers need to know which program is right for them and how to avoid getting ripped off. One of the first things you need to know is the difference between a debt consolidation loan and a debt consolidation service.
Debt Consolidation Loan
Basically, a debt consolidation loan is any low-interest loan that you receive for the express purpose of paying off two or more high-interest debts. For example, if you have three credit cards with annual percentage rates (APRs) of 15%, 20%, and 21%, and outstanding balances of $5,000, $4,500, and $6,000 respectively, your debt is costing you a lot of money.
How do you figure it out? There are lots of websites that give you the figures on how much interest you pay on a given APR for every $1,000 in debt. Given the above scenario, here is your breakdown:
15% APR-you pay $12.50 per month per $1,000 of debt
20% APR-you pay $16.67 per month per $1,000 of debt
21% APR-you pay $17.50 per month per $1,000 of debt
Your three credit cards are costing you a total of $242.50 per month in interest charges alone. If you took out a debt consolidation loan (a home equity loan or a personal loan) for the total amount of $15,500 and your rate was 7% APR, you could pay off your credit cards. Your new $15,500 debt would cost you $5.83 per $1,000 per month, or only $90.37 per month. Aside from any loan fees, you would save $152.13 per month.
You can do the math and apply for a debt consolidation loan yourself. Just make sure you work with a reputable bank or lender. To be safe, check them out with your local Better Business Bureau.
Debt Consolidation Service
You’ve heard the adsGet out of debt quick! Freedom from debt! We can help! They promise to help you consolidate your debts and pay them off faster.
Unlike a debt consolidation loan, which you can manage yourself, a debt consolidation service acts as an intermediary between you and your creditors. Debt consolidation services are supposed to work with you to organize your finances, and then negotiate with your creditors and convince them to lower your interest rates or offer a settlement. The negotiation is meant to ensure that you can afford to make your payments and you can pay off your debts faster. It also ends harassing calls from creditors and/or collection agencies.
The catch? Except for a very few charitable non-profits, debt consolidation services are designed to make money from you, the customer. Even the most reputable services charge substantial fees. Before you consult a debt consolidation service, you need to carefully consider whether or not you will save enough money to justify the added expense, and whether or not youd be better off calling your creditors yourself.
The fact is that the debt consolidation company has no more leverage over your creditors than you do. And if you choose to communicate with a debt consolidation service, remember these red flags, courtesy of the Federal Trade Commission (www.ftc.gov):
1. Scammers may charge, in addition to an up-front fee and a monthly administrative fee, a fee equal to the monthly debt consolidation payment, which is collected from the customers first payment.
2. Scammers overstate the estimated savings to the customer.
3. Their services do not necessarily reduce the consumers monthly payment or total debt.
4. They purport to be non-profit when they are not.
5. Scammers do not make any effort to improve the customers credit record, history, or rating.
If you need help figuring out complex household finances, a reputable debt consolidation service may be helpful. Just remember that its customers like you who make these companies profitable!
About the Author
ConsumerFinanceReport.com features an article library that covers a variety of personal finance issues and topics, including the article on debt consolidation services. Related content helps to teach consumers how to pay off debt.
