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Debt Consolidation and Debt Management
Debt Consolidation Advice
The first and most solid piece of debt consolidation loan advice that I can give you is this:
LOOK BEFORE YOU LEAP!
All debt consolidation loans are NOT created equally. Don't choose before you know what you are getting. Do your homework.
All loans come with an interest rate. A lender lends money to a borrower with the intention of making a profit on that loan. That profit is the interest that the borrower will pay in addition to the loan principle. (A lender lends $100 and gets paid $110…there is a $10 profit for the lender.)
CONSIDER ALL OF THE FACTORS!
The total amount (in dollars) of interest that you pay on a loan is based upon two things; the interest rate AND the length of the loan. You can actually pay LESS interest on a loan if you pay it off in a shorter period of time. The best thing to do is to figure out exactly how many real dollars that you are going to pay in interest over the life of the loan. So my third piece of advice to you about your debt consolidation loan is this:
Remember to DON'T BITE OFF MORE THAN YOU CAN CHEW!
Remember this: you will be exchanging unsecured debt for secured debt. The property that you pledge as collateral for a debt consolidation loan can be taken by the lending company if you fail to make your payments on time and in full each and every month.
You need to make those payments as high as you can live with and for as short a period of time as possible, but you also need to make them low enough that you KNOW you can meet the payment every month. You have something to lose here.
See Also:
Grad Money Matters
| Debt Consolidation and Debt Discipline Defining Credit Card Debt Consolidation
According to Investopedia.com on debt consolidation, "This is common among companies or people with credit problems (maxed-out credit cards, car loans, student loans, etc.), who combine all their debts into one loan to create greater ease in repayment. In the case of credit card debt, this can often be advantageous since credit cards generally carry a high interest rate."
Additional info at:
Credit card debt is "unsecured" debt. Unsecured debt means that no collateral has been pledged by the borrower that the lender could use to help pay off the debt if the borrower defaults on the loan. For example: When you buy a car and make a loan to pay for the car, the car itself is the collateral for the car loan. If you default on the debt, the lender can repossess the car and sell it to help him recover his loss. A car loan is a secured loan.
The percentage of interest that can be legally charged for unsecured debt is higher than the percentage that can be charged for secure debt. That is why interest on credit cards is higher than interest on, say, a car loan.
It is possible to get an unsecured debt consolidation loan, but the interest rate is going to be high. A secured debt consolidation interest rate will be at a much lower interest rate, but you do need to realize that you are exchanging unsecured debt for secured debt in exchange for that lower interest rate. You will be pledging your real assets as collateral for a secured debt consolidation loan.
Whether you apply for a secured or unsecured debt consolidation loan depends upon your own set of circumstances and whether it is important to you to keep your assets free of lien. |
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More articles:
Debt - Wikipedia, the free encyclopedia
Capital One Home Loans: Home Equity, Refinance, Debt Consolidation ...
FREE ONLINE DEBT CONSOLIDATION LOAN PROGRAM
Student Consolidation Loan Information for College
Grad Money Matters
Low-Cost Debt Consolidation Loans In-Over-Your-Head Debt Consolidation
Getting into debt is much like wading into the ocean. Have you ever stood on a beautiful white sandy beach and watched the gentle waves roll up on the shore? The water looks cool and inviting, so you stick one toe in. Your friends are out there swimming around and having fun.
Ohhhh! It feels as good as it looks, so you step into the water. You begin wading out toward the horizon, and suddenly you find that you are in over your head and a very long way from shore.
That is just how debt sneaks up on you. One day you are standing safely on a debt-free shore, and the next you are swimming for your life while you are pretty sure that you are going to drown in a sea of debt.
If you were drowning in the ocean, you would need a lifeguard to save you. If you are drowning in a sea of debt, you need a debt counselor to save you. A debt counselor can throw you a lifeline, called a debt consolidation loan, and pull you safely to shore.
Now don't misunderstand. Getting from the point of drowning in debt to debt free is not easy even when you are holding onto a debt consolidation loan. It takes self-discipline and self-denial to again stand on solid financial ground, but it can be done. And once you feel financially secure again, you will believe that the effort was well worth the sacrifices that you had to make.
Not only that! You will have learned a great deal about money management. Usually when people have to be rescued from an ocean of debt, they never venture in over their heads again.
Debt Consolidation, Settlement & Relief, Credit Card Counseling
Offers debt consolidation, relief, and settlement, as well as credit card consolidation and credit counseling. Call: 1-800-CUT BILLS for a free quote
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Debt Consolidation, Settlement & Relief, Credit Card Counseling
Offers debt consolidation, relief, and settlement, as well as credit card consolidation and credit counseling. Call: 1-800-CUT BILLS for a free quote
Read full post here.
Debt consolidation calculator, debt calculator - MSN Money
Consolidating your debt in a single low-interest loan can save on interest payments and speed the process of paying off debts. This calculator will help you determine how much you ...
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Debt Consolidation : Consolidate Debt : Free Non-Profit Consolidators
Free debt consolidation advice to combine credit cards and loans to save money. We are non-profit debt consolidators. Call 1-877-994-0998.
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Debt Consolidation Loans - Consolidate Debts, Services...
Debt consolidation loans may not be your best option, Learn the Secrets to debt free living. Let our certified counselors structure a solution to consolidate debt for you.
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Related Topics: The Fair Debt Collection Act,
The Equal Credit Opportunity Act, The Equal Credit Opportunity Act
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