Category: Financial

Benefits and Risks of Debt Consolidation

Debt consolidation is a complex topic. This is especially true when debtors have many creditors or a lot of money is involved. Readers who are interested in learning more about debt consolidation but don’t want to fall prey to unscrupulous companies with predatory business practices can read on to get a better idea of what to expect from a legitimate program.

How Does it Work?

Taking out a debt consolidation loan allows consumers to pay down multiple credit cards or personal lines of credit in one monthly payment. This typically requires taking out a fairly large loan, which can be a challenge for those who have poor credit as a result of their financial difficulties. Reputable debt consolidation companies will offer reasonable interest rates, but consumers with poor credit scores should still expect to pay more than those whose credit scores have not yet been substantially affected by late or missed payments.

Is a New Loan Really Necessary?

Taking out a debt consolidation loan can be an effective means of getting out of debt, but this solution isn’t right for everyone. Debt consolidation is most effective for those who have multiple credit cards but owe reasonably small amounts of money on each of them. Since credit card companies tend to offer high interest rates, a debt consolidation loan may help some consumers save money by offering more reasonable rates.

What Are the Risks?

Everyone knows about the benefits of debt consolidation, such as the ability to simplify monthly payments and the potential to get lower interest rates. That doesn’t mean debt consolidation doesn’t come with certain risks, as well, though.

Those who take out debt consolidation loans and expect them to solve all of their financial woes are likely to be disappointed. They may be able to take advantage of … Read More...

Keep Your Eye on the Goal When You’re Repaying Your Debt

Most people today owe at least some money to creditors. Some people end up owing a significant amount of money and find they need to start repaying the debt as quickly as possible before they end up needing to file for bankruptcy. Those who are trying to repay their debt now might want to keep these ideas in mind so they can remember what they’re working on and see how far they’ve come already.

The Total is Getting Smaller

Every time a payment is made, the total amount of debt is lowered. Even if it’s only lowered by a small percentage, it has still gotten smaller. Over time, bigger changes will be easy to spot, but it can be hard to overlook the small changes in the beginning. Looking specifically for the small changes can help the person see they really are making a difference and the debt really is getting smaller, even if it seems to be taking a long time.

Every Bit of Progress Helps

Every time the total debt gets smaller, it’s one more step toward being free from debt. No matter how much is owed or how much will lower with a single payment, it’s all progress and it’s all helping toward the final goal of paying off all of the debt. The person should track their progress so they can easily see the changes and how much they’re progressing month after month.

Look Forward to a Debt-Free Future

Keeping the final goal in mind is often incredibly helpful. The goal for most people is going to be to become debt free. While this might seem impossibly far away right now, it is something that can be done. One step at a time, one payment at a time, can help the person reach this goal. As … Read More...

6 Benefits of a Debt-Free Lifestyle

For most people, debt-free is the way to be, for very good reasons. When a person isn’t held back by a loan payment or other financial obligations, they can live a richer life. In this guide, readers will learn the advantages of a debt-free lifestyle.

The Ability to Choose

When people are burdened by debt, they often get into a cycle that’s difficult to get out of. However, when they don’t owe anything, it puts an extra spring in their step. Instead of putting all that extra money toward debt, they can travel, donate to charity, or spend it however they choose.

No Anxiety

There’s tremendous anxiety in debt. Knowing that the credit card company or auto lender expects a certain amount by a predetermined time is unsettling, especially when there’s a tight budget. Worse still is the anxiety that comes with having to pay a monthly mortgage. When debt is paid down, borrowers feel relief in knowing that they will have one less payment to make.

More Savings

If a person has no debt, they don’t pay interest, which means they can divert those funds into a savings account. With additional savings, it’s easier to put money aside for retirement or unexpected expenses.

More Fun

It’s easier to fund dreams when debt isn’t part of the picture. With the money that would otherwise go toward credit card bills and other debts, it’s easy to create a “just for fun” fund. Travel to Europe, take up a hobby, or do something fun without worrying about the cost.

Financial Health

When people have no debt, their credit score, debt-to-income ratio, and other financial health indicators are typically good. Though it may not seem very important, good credit is extremely useful. For instance, a potential landlord may use a person’s credit score … Read More...

How to Find the Right Debt Consolidation Professionals

Debt consolidation loans are becoming popular options for people who are ready to get out of debt for good. The fact is, these loans offer a wide array of benefits, including the ability to turn multiple debt payments into one. This makes paying off debt and getting out of it easier than ever before.

Unfortunately, there are more than a few companies offering debt consolidation loans today, which makes it more difficult than ever to find the right company. The good news is, there are a few tips that can be used to help ensure the right debt consolidation company is found and used.

Ask Around

One of the first things a person should do when trying to find a debt consolidation loan is to ask others if they have used these services in the past. Take some time to get recommendations of several debt consolidation lenders. This is a great way to find an option that will meet the needs a person has.

While this is a great way to begin the search, it isn’t the only consideration to make. It’s never a good idea to make a decision based on someone else’s recommendation alone.

Do a Bit of Research

Once several options have been found, the next step is going to be to do some research on the companies that were recommended. Find out how long they have been providing debt consolidation services and read reviews from other customers who have used the company in the past. It’s also a good idea to look at things like trust ratings, fees, owner information, and other pertinent information that could help establish the business as a legitimate option for debt consolidation services.

When it comes to finding a service provider for a debt consolidation loan, there are more than a … Read More...

Details About Credit Card Bankruptcy Help

In the US, credit card debt presents the second greatest financial hardship for consumers. The first is student loan debt. When managing credit card debt, consumers review the most suitable way to pay the accounts off and avoid credit difficulties. Reviewing details about how bankruptcy helps with credit card debt shows consumers what options are available.

Reviewing Credit Card Debts

The attorney reviews the volume of credit card debt the consumer has. The amount determines if it is worth filing for bankruptcy. The type of credit card plays a role in choosing the most suitable way to settle the debts. Secured credit card accounts present the risk of asset loss. The consumer must take action to avoid the seizure of the asset.

What is Discharged Through Bankruptcy?

Credit cards that are discharged through bankruptcy are unsecured in most cases. The accounts include retail store cards and credit cards that aren’t connected to a bank account directly. If the consumer files for bankruptcy, the unsecured accounts are included in debts that are discharged. The accounts are no longer the consumer’s responsibility if all requirements of their bankruptcy are completed.

Are Settlement Offers Better?

A settlement offer is negotiated by the attorney. The offers allow the consumer to pay off the debt in one lump sum payment or through small installments. The creditors reduce the balance by at least 50%, and the account is removed from the consumer’s credit history after it is paid off.

Improving the Credit Rating

Paying off credit card accounts improves the consumer’s credit rating. Lenders review the consumer’s income-to-debt ratio when offering a loan. If the ratio is too high, the consumer won’t qualify for the line of credit. Eliminating credit card debt is an effective way to increase credit scores quickly.

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