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Debt Consolidation - Types of Help Available for Unsecured Debt Consolidation
There are several types of help available for unsecured debt consolidation. You can choose to take out a debt consolidation loan to lower your rates and payments. You may also choose to use a debt consolidation programs, letting a third party deal with your creditors. And finally, you can turn to a credit counselor to help you find the best plan for your situation.
Debt Consolidation Loans
A debt consolidation loan is any type of loan you take out for the purpose of paying off other creditors. Ideally you want to find a loan with lower interest than what you are currently paying on your bills. However, even if you don?t lower your rates, you can lower your monthly payments by choosing a long term loan. The drawback of course is paying more in interest charges.
You can choose from a secured loan, usually backed by your home, or unsecured loan. Secured loans, including a home equity loan, second mortgage, and line of credit, will have lower rates and the tax advantage of writing off your interest payments. However, if you don?t have a home, you can still find relatively low rates with a personal loan.
Debt Consolidation Programs
You can also work with a debt consolidation program to lower your rates and consolidate your bills. This third party agency will negotiate lower rates with your creditors for a small fee. You also only make one monthly payment, letting the agency pay your bills from that sum. Some non-profit agencies also specialize in helping those with six or more months of late payments.
Before you sign up with these types of programs, be sure you have researched several agencies. Compare pay back dates, fees, and estimated monthly payments.
Credit Counseling
If you are confused about your options or just don?t have a plan for getting out of debt, consider visiting a credit counselor. As a non-biased person, they can explain your financial options. They can also discuss with you?re the pros and cons of each options, helping you find the best program for your unique situation.
Besides helping you to consolidation your bills, they can also help you develop a monthly budget and long term financial goals.
To view our recommended debt consolidation companies online, visit this page:Recommended Debt Consolidation Companies.
Restructure Your Debt Before Buying a Home
The temptation of getting into the runaway housing market is understandable. Simple savings accounts are returning less than 2% per year. CDs and bonds are not much better. Safe funds are yielding 5% pre-tax. And real estate is surging, offering both equity appreciation and tax protection. However, if you are in debt, its important to make sure you restructure it and consolidate it before taking the leap into the housing market.
So many see the risk of taking on a house that is beyond their means as worth taking in order to create value and build a financially secure future. The problem is that the lenders, once predominantly banks prone to conservative lending standards, now include pension funds, insurance companies and other investment entities eager to place loans to keep their money working.
It is not the lenders who will be hurt. They will move swiftly to foreclosure, recover the house, and resell it. It is the borrower who gets burned. Bankruptcy laws are changing in October and it will no longer be convenient to file bankruptcy to avoid creditors. Individuals, once protected from forced liquidations, will find that to be the norm rather than the exception. So it is more important than ever to learn how to renegotiate or restructure debt before one is forced into bankruptcy court.
Renegotiating debt is best done before you are too delinquent. With a solid payment history with your lenders you are more likely to find them willing to work with you when you approach them. Debt can be restructured a number of ways but there are some cardinal rules to observe so that you preserve your ability to control the restructuring of your debt.
1. Do not wait until the debt has been turned over to a collection agency. By then it is too late to deal with the original issuers of the debt who might have an interest in helping you. They have discounted and sold off your debt when it is turned over to collections. That means they have written off what they would have conceded to you to a third party. The third partys only motivation is to make money off your bad situation.
2. Before you seek debt relief, develop a personal budget that is viable and a plan which you can handle. Now you are ready to lift the telephone and call for help.
3. Dont be afraid to ask for help. Advising the lender of a looming problem allows them to help you avoid it becoming a major issue.
4. Be persistent. No is easy for creditors to say. You will hear it a lot. Call back and try to get to someone else. Talk to the same person repeatedly until they begin to get to know you and start wanting to help you.
6. Be pleasant. You need to develop a rapport with the other person so they want to help you. Getting mad often makes things worse.
Debt restructuring is a basic form of negotiation. You have a need. The lender also has a need. You have a solution to offer. They have to be convinced to listen to you. You have to convince them of your sincerity and why they should gamble with your plan. Dont ask for a hand out. Ask for approval of a specific plan.
A plan that works for you should give them something as well. The two primary commodities are time and money. If you have money, but not enough, explain your situation and offer to pay off the debt at a discount. If they sell off your debt they will be lucky to get 50 cents on the dollar. You should be able to settle between 50% and 100%. If you offer to pay the full amount, but over time, you will be saving a lot in money and keep you credit rating from being impacted. But be sure to negotiate both the interest rate and a commitment not to report the problem to any credit reporting agency. It does you no good to extend your payment period if you are also going to be paying a higher interest rate. Interest rates are negotiable.
The most important aspect of personal debt restructuring is to ask before you get in too deep and before they start chasing you to pay. A good customers case always sounds better than a plea from a habitual problem customer.
By successfully restructuring your debt and reducing it to something you can manage, you will have protected your credit for future forays into the housing market or any other venture.
Student Loan Consolidation Rates - Helpful Tips
Student loan consolidation has many benefits. Before you sign up on the dotted line, you should know how to get the best student loan rates. If you are tired of too many bills and monthly due dates, it may be time to find the best student consolidation loan you qualify for.
The most obvious way to get the best student consolidation loan rates, is by having great credit. It?s easy to get great student consolidation loan rates with a FICO score over 660. But, there are several ways to get the best student consolidation loan rates.
Know Your Credit Before Shopping For Student Consolidation Loan Rates
By doing a simple Google or Yahoo search on FICO and credit scores to find the information you need to check out your credit score. This really should be your first step to getting the best student consolidation loan rates. With knowledge, you will get the best student loan consolidation rates for your financial situation.
Student consolidation loan rates can vary from person to person. The student consolidation loan rates offered will be based on your financial situation and FICO score. With a FICO score under 600, you will have a tough time getting a good student consolidation loan rate.
Refinancing And Home Equity Loans Used For Student Loan Consolidation
With a home equity loan, you can get the best student consolidation loan rates possible with good credit. Secured by your home, a student consolidation loan can help get rid of your high credit card rates and loans. You will have less bills to pay, with the best student consolidation loan rates to lower your interest on several loans.
Refinancing your home mortgage may be an option to get the best student loan consolidation rates.
The important thing to remember with home equity loans and refinancing, is to be logical and don?t let your emotions get the best of you. You may get the best student consolidation loan rates available, but you still have to pay back the loan over time.
It?s best to take the time to sit down and research all your options that are available to you to get the best loan and interest rate.
Resources Online For Getting The Best Student Loan Consolidation Rates
With today?s Internet resources, you have an advantage when looking for the best student loan consolidation rates online. Take time to get educated on the process of getting the best student consolidation loan rates, and you can save yourself thousands of dollars on the student consolidation loan rates available, with just a few clicks of the mouse.
The idea is to combine all your current debts that you owe into one large debt with the lowest interest rate possible. Instead of making monthly payments on several high interest loans ranging from 12% to 28%, you can make one payment each month to one company.
Today?s career minded students can get help with the burden of having several student loans. You can focus on your career, instead of losing sleep over paying several monthly loan payments. Student loan consolidation can be the solution with many advantages. With today?s Internet technology, you can get a student loan consolidation quickly and easily.
Copyright 2005 Dean Shainin
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