Category: Debt & Credit Tips

Basic Debt Consolidation Guide You Should Know

With the rough and tough economic times, people are struggling in paying off debts, so many are using loans, which are available at different interest rates for individuals with varying credit scores and incomes.

But while getting a loan or credit can be easier, paying it back isn’t. And when you cannot pay credit cards, mortgages and loans, you’d suffer from a financial crisis and feel desperate. Today, there are debt consolidation programs or loans, which are chosen by individuals as a solution in paying debt.

debt management

What’s debt consolidation?

It’s a type of loan to choose if you think you’re in a financial crisis due to multiple loans to repay, such as a car loan, personal loan or mortgage, to name some.  You may select it if you’re struggling to pay your debts separately (principle and interest rate) monthly.   

It helps turn a few loans into a single loan – paying only one interest rate. It can help you get out of the financial struggle easier and let you save money in paying the interest.  In short, the debt consolidation may be your solution if you want to get out of the debt burden faster and pay loans easier.

Are there debt consolidation benefits?

First, take note that it isn’t a shortcut to get you out of your financial trouble; rather, it is one of the tools to help you get rid of debt faster.   

However, the debt consolidation can only help you solve your problem if you’re going to choose a reputable debt consolidation service or company. With one, you can take advantage of…

  • Reduced interest rates
  • Credit score protection
  • Reduced monthly payments
  • Faster debt elimination

So without even saying, the main advantage offered by a debt consolidation service is it lets you repay your loans easier and with less stress.

It can organize your finances because it can combine your payments into only one payment. However, you must do your homework, weigh your options, review the pros and cons, and ensure the plan suits your current financial situation.

Debt Consolidation Steps

  1. Do not procrastinate and act now. The first step in getting rid of debt is not ignoring it and taking action immediately. If not, you will suffer from more stress and repay loans longer.
  2. Know the risks. Deciding to consolidate your loans must be taken seriously. It is not a matter of a one-minute decision to make. Thus, you may want to seek advice from financial counselors that have intimate knowledge on loans and that are proven experts in the field to explain the risks of turning any unsecured debt into a secured one or using home equity in paying off a credit card debt.
  3. Study your options. Check out and review the types of debt consolidation plans available, including debt management plans or alternatives including getting a home equity loan or borrowing from retirement funds. In the case of student loans, you cannot consolidate federal loans with other types of debts, although you can consolidate them with other debt sources.

Getting Started with Debt Consolidation

There you have a quick guide on what to expect and how to consolidate loans to make debt repayment easier. If you need a sound advice, get in touch with an expert at today!

Living Debt Free

There is an increasingly widely held impression in society today that in order to get by, you have to get into debt at some time or another. This is actually untrue, but because for many people the alternative seems to be a fairly boring life, they feel that it may as well be the case. However, it is possible to live life debt free if you follow some rules and bear in mind that, eventually, you will find a way to make the best of it and actually enjoy your life. Knowing that you can live a life without debt collectors writing, calling and even knocking on your door really makes a difference.

It will require you to make and stick to a budget. This may sound dull, but when you think about the alternatives – debt collectors generally do not tend to be particularly courteous people – it is something worth doing. When you have money paid to you at the end of the month, write down what you will need to spend. Food, rent or mortgage payments, transport and general housekeeping, as well as bills for electricity, telephone and other necessities – these are essential outgoings. What you have left over is disposable income.

By doing this monthly you will before long arrive at a point where you know automatically how much money you have. Treating yourself or others need not be a thing of the past. Indeed, without monthly credit repayments to meet, you will have more scope to do this. It is a more serene way to live.

Sometimes Counseling Can Help

The word “counseling” is one that can trigger some pretty extreme reactions in people. Given its long association with people under the effects of depression or other mental stresses, it is viewed by many people as being something with a stigma attached to it. However, the simple fact is that counseling can be extremely helpful, and applying yourself to a course of it need not be an admission of weakness – more that you had the strength to admit you needed help. Counseling exists today for far more things than mental stress – although it tends to be used in situations which can be enormously mentally stressful.

Debt counseling is a process that people are using more and more these days, in recognition of the fact that finding yourself unable to make your monthly payments can be an extremely stressful situation. There are many different approaches to debt counseling, a lot of which center around your reasons for ending up in the situation where you have major debt to deal with. If you can address these problems, with the help of a qualified specialist, then you can put yourself on the right track to get rid of your debt once and for all.

Look around for the counselor who you think will help you best, who will understand your reasons for falling into debt and who you think can provide common sense answers to your problems. The situation of having to pay off serious debt is something that can have unreasonable effects on your mental and physical well being. Don’t let it drag you down.

A Debt Management Plan Could Be Your Salvation

Although we as a society have become used to the potential pitfalls of irresponsible lending and borrowing, there are still countless people who have to face a situation where they are placed under extreme pressure to make repayments because unforeseen circumstances interfered with their ability to keep up with the account. If it appears that you are going to be among them, debt management can be the answer – however it is important to be able to differentiate between the debt management plans that work in your favor and those which are out to make a quick buck.

Debt management should, if done correctly, be a way of reducing the debt that you are required to pay by getting in contact with the credit lender and negotiating a stop to interest being placed on your account – along with an agreement not to place late payment fees. Additionally, this process can be paired with a concerted policy of credit repair where an expert will go through your credit file to find the unfair penalties applied and look to overturn them. This means that with time you may be able to borrow again in a situation where it becomes necessary.

Debt management is not ever going to be the most simple process. Banks are tricky to deal with when they feel that they are going to be able to get money out of you one way or another. Think before choosing your debt management partner. The right one can be your pathway to financial security – the wrong one could leave you even worse off.