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So you are thinking what does debt consolidation and payday loans have in common? Well typically people who opt for payday loans are not very far from those who are currently considering debt consolidation as an effort to lower high interest credit card monthly payments. We live in a country where credit is relatively easy. In fact on any given day, most of you will receive a letter from a credit card company offering you the world but spelling out the harsh details in the fine print that unfortunately few ever take time to read. This article is not meant to pit debt consolidation and payday loans as good vs. evil.

It is intended to help you understand why people chose both alternatives. First of all, what exactly is debt consolidation? Debt Consolidation is the process of aggregating unsecured debt in order to lower overall interest rate and have one monthly payment. Who needs debt consolidation? If you are stuck with high interest monthly payments, especially from credit card debt, it is likely that debt consolidation would be appealing. In many cases people simply can not afford to pay what they are currently paying.

Keep this in mind. Lets transition to payday loans or cash advance. People that want a cash advance are those who are in a bind and need emergency cash. Payday loans and cash advance have high interest rates and many states prohibit them. I am not against them because I understand why people may need them as a last resort. In both insistences people are seeking debt relief; however, those solutions are not the ultimate solutions to the problems they try to solve. The true answer lies in our ability to spend vs. save.

The best debt consolidation program will get you out of debt if you finish the program; however, to fix the problem you must understand that living within your means is the true solution. A cash advance may help you pay for a bill when you come up short, but saving for a raining day is a lot cheaper than getting a payday loan. By acknowledging our own weakness, we can become stronger when we take action to improve ourselves.

Mortgages are secured loans that are given to first time buyers, homeowners and people who have bad credit. Once you are accepted for the loan, you must repay the debt, which will include interest rates. Some refinancing loans have additional fees attached. The secured loans have collateral attached, means that if you fail to make payments, you are subject to foreclosure or repossession. The bank will come and take your home and sell it for the amount you owe.

This is why it is wise to make sure you know what you are getting into if you plan to refinance to consolidate your debts. Some loans permit buyers to repay the loans in 25 years, while others allow 30 repayments. Few of the lenders available on the Internet that offer refinance loans for consolidation of debts are aware that people go through hard times-or at least they don’t deal with people directly enough to actually feel this hardship through talking to them.

On the loans that offer lower interest rates, combine payments for debt consolidation. If you can manage to pay for the loan in the time stipulated, it is likely that you will take less time to pay back the loan amount borrowed. Once you find a lender to refinance your mortgage and combine your bills for debt consolidation, you will receive a loan based on capital and interest.

The Repayment loans for refinancing and consolidation make it easy, since the lenders will combine the interest and repayments into one monthly installment. Still, few lenders will allow you to repay the interest rates only; however, be aware that these types of loans do not combine your payments for consolidation; rather they put you at risk in some instances.

Still, there are several types of loans available that will help you refinance for debt consolidation, so keep an open mind and mull over your choices carefully before you make a final decision.

One of the most important tasks debtors must carry out to achieve in debt consolidation is keeping away from complications. When debtors have bills that are behind merely because they didn’t have the cash to repay the debts, then their stress will build. Some people may go on binge, spending instead of paying their bills, and procrastinating instead of working to restore their credit.

These people may believe that after three, seven or ten years the problem will end, since the credit reports remove any pending debts after seven years and any bankruptcies after ten years. The fact is, the problem doesn’t go away the problems only get bigger. Yes, it is true: after three years, if you manage to payoff a debt, then the debt is removed from your credit report. In addition, yes, it is true if after seven years you failed to make payments the debt is removed in most instances from your credit report.

Furthermore, it is true that in many cases, after ten years, bankruptcy is removed from your credit report. If you have the patience to wait this long, can tolerate the hassling phone calls and letters, and don’t mind worrying about going to court for this long, then by all means procrastinate.

Bills and debt consolidation is optional, however bill and debt reduction is your best bet. You can do this by start paying as much every month on your bills as possible to reduce your debts.

Introduction

There are a number of different financial procedures available to a person in today’s modern financial world and one of the most important and interesting things about that is that the person that is aware of and uses all of the tools available to them is ultimately the person that is going to succeed. With as difficult as the world has become today from the point of view of handling one’s finances, the management of debt is definitely something that people should take a look at as well as the procedures that are available to help those same people get out of debt problems. One of the procedures is something known as debt consolidation and more information about debt consolidation is presented below.

Debt Consolidation

So what exactly is debt consolidation? Well, when you look at the different parts of the financial spectrum, what you immediately see is that for the average person in today’s world, there are a number of different sources of debt. When you take a look at things like debt from credit cards, debt from a mortgage, debt from car loans, debt from monthly bills and any other number of sources of debt that can exist in a person’s life, you can see how it would quite easily get to the point where the person would feel overwhelmed and not have a clue as to what they should actually do.

Well, one thing that these people can do is take out a loan that they can use to pay off all of their other sources of debt and therefore combine or consolidate them into one specific source of debt. Ultimately, this is the type of debt that is the easiest to manage and the type of debt that is the easiest to pay off. It is a scientifically proven fact that debt consolidation is quite frequently the easiest way for a person to get their debt into a position where they would be able to pay it off.

Advantages

There are a number of different advantages inherent to debt consolidation; the first of which was already mentioned briefly above. Paying debt off is easier when that debt is consolidated. From a logistical standpoint, this is specifically because keeping track of one source of debt or at the most two sources of debt is a lot easier than keeping track of five or six sources of debt and therefore when you have a lower amount of sources, keeping track is easier and ultimately paying it off becomes easier as well.

In addition to the logistical concerns, there are also financial concerns when it comes to debt. The most common way to consolidate debt would be a home loan and as we all know (or at least most of us do anyway), home loans have very low interest rates. Going from a 19.5% interest rate on a credit card to a 5.5% interest rate on a home loan is definitely something that could be considered great for a person. In addition to that, paying off the loan will also take lower amounts of payments each month. This is because of the lower monthly payments associated with home loans.

Debtor’s disease is a silent killer. Killer of respect, marriages, self control, and families. There isn’t a part of your life that it won’t touch and destroy with it’s deadly power. Some of you won’t even know you have it for many, many years. It’s a sneaky affliction; creeping into your life and slowly but surely taking control of every part of your existence.

Seems a bit of a dramatic description, doesn’t it? But, the sad part is, it’s all true. Even though we often hate to admit it, debt will control our lives totally. Even when we first realize it, we won’t do anything about it. We will deny it, continue to feed it, and give it all it needs to thrive within our lives. Oh, you’ll have help, no doubt about that. There are many ways we fuel the fever. Falling into the credit card trap is just the beginning. Self justification is your worst enemy. Why, the human mind is masterful at justifying just about any action, or purchase, given the right circumstances.

The first step is recognizing the disease. Diagnoses of debtor’s disease is much harder than you might expect. Oh, the symptoms are very clear for sure. But, since most of us hate to admit our own vulnerabilities and defeat, they can be nearly invisible to the victim. I experienced nearly all of the symptoms below before I finally excepted the fact that I did indeed have the affliction. It is quite a humiliating experience to realize that so many obvious warning signs were present and you continued down the wrong path.

They say hindsight is 2020; Meaning that the past is clearer when we look back. And, when things go wrong, we like to hope that we would have done things differently if we knew what we know now. Well, I’m hoping I can prevent you from some of that humiliation and financial disaster. You can stop it from growing to destructive levels if you can identify the warnings early on. Identify problems early and fix them. Make no mistake, if the following scenarios apply to your situation, you are headed for financial trouble.

SYMPTOMS

Requesting credit increases lately?

Requesting credit increases for no specific major purchase, but because your cards are maxed out, is a sure sign that your spending is out of control. You may be living way beyond your income.

Do you apply for new credit cards because your current credit balances are maxed out?
This is just another way to get additional credit especially, when you can’t seem to get any more credit increases from your existing creditors.

Are you rescheduling monthly bill payments due to lack of funds?

If you find it increasingly difficult to pay bills on time and according to a consistent schedule, you’re probably starting to get into trouble. You should not have to put off paying essential bills.

Are you using credit to meet your living expenses?

Credit is not intended to help you live above your income. You should be able to meet all of your essential living expenses with your income. If you have income left for non-essential expenses, great. If not, don’t turn to credit to live above your income. It will most certainly result in financial disaster.

Paying essential monthly bills, such as the electric or phone, with credit cards is a serious symptom. Once you turn to credit to pay your monthly bills, you’re in serious trouble. Sooner or later the credit cards will be maxed out, you will be refused additional credit increases, and you won’t be able to pay those bills.

Do your credit card payments equal more than 10 -15% of your monthly income?

Your income to credit ratio is an important part of your credit management picture. The higher your balances, without an increase in income, the lower your credit score. This is true even if you have no derogatory items on your credit history, and are consistently maintaining good payment records.

In most cases, creditors will identify debtor’s disease long before the victim realizes his affliction. They will begin to arm themselves against the consequences of the infection when this occurs. Your interest rates and penalties (i.e. late fees, over limit fees) may increase as companies anticipate default. Even they can see you’re headed for trouble.

THE CURE

If you answered yes to any or all of the above, you have fallen victim to debtor’s disease. Don’t let it take control of your life! Fix the problems now. You’ll have less stress and be a lot happier. I can say that with confidence. It is such a relief to be able to see an end to the struggle.

You will feel as though a great burden has been taken from you when your finances are under control. And, even though you may experience some difficult periods when you may get discouraged, you’ll find those times much less stressful that periods when you worried about how your bills would get paid. Take some serious money management steps to begin your treatment. It’s never too late to take control of your finances and make a commitment to debt free living.

Identify overspending and eliminate it.

Identify where your money goes. Track spending for specified period of time. Eliminate unnecessary expenses. Reduce those you feel you need to keep.

Develop a plan to become debt free.

Create a plan to get rid of debt. Use a self help plan or a professional. Whether you choose a counselor, debt consolidation or settlement, or a self help plan, lower debt consistently to manage and eliminate debt. A plan that calls for a consistent monthly commitment until debt is paid will be easier to budget.

Create a Household budget

Creating a household budget will be essential to your success. It is necessary to bring your living expenses within your income. This is the concept of living within your means. You can create this yourself as well or seek professional help in setting up or maintaining your budget. Your situation and your level of self discipline will determine what will be most successful for you. Find a plan that works for your situation and will be the easiest for you to stick to!

Implement lifestyle changes that will help you free up money to help pay down debt. Consistently apply these extra funds to debt payments to get out of debt faster. The sooner you are free from debt, the sooner you can start investing that money in yourself. Save money everyday on everything you buy and do.

Once you rid yourself of debt, commit to debt free living.

Remember, you now know how you made the mistakes, you know how to identify the symptoms, and you have the knowledge and power to implement the cure. You should now be immune to debtor’s disease. Now, you can vaccinate your children, friends, and family with the knowledge to prevent them from falling prey to this life draining affliction. Give them your hind sight and help them build happy, secure, and independent futures for themselves and their families.