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Debt Consolidation Can Never Be A Mistake

Posted by | Posted in Debt Management | Posted on 13-04-2011

The purpose of debt consolidation is to pay only one loan. Many individuals are faced with the problems of paying many loans. There might be student loans, home loans, personal loans or even credit card payments. When it comes to all of these, there will be confusion about which one to pay and when to pay it.

Not only will the interest rates vary from bank to bank, the payment options as well as the time of the payment will also vary. To sort out this problem, a debt consolidation is sought. Through this method, the borrower may pool in all his debts, and take a fresh loan against some security. This method is normally sought to seek lower interest rates, and also to make sure the interest rate is fixed.

In most cases the collateral taken for this loan is a house. If there is no security, there are chances that the interest rate may be higher. So it is wiser to set the loan against some security. Many individuals who seek these loans will want to pay back certain credit card loans, as the interest on those will be higher than most loans.

The option of debt consolidation will also have to be thought of carefully by the person going in for such a loan. If he is doing this because he prefers this to declaring bankruptcy, there will be the debts to consider. He will have to pay back all the debts. It is sometimes better to choose this option, as it will allow the person more chances of maintaining his credit record, and it will be good for further use.

Debt consolidation is also used against property, as this will give the lender assurance that he is safe even if his loan is not returned. This is the only reason for him to reduce the loan interest rates. The borrower should also be smart enough to look around for several lenders, and check all their interest rates, before picking one lender.

The borrower must also not hesitate to ask if there are any various options that he can choose from. Some companies may indulge in forcing the borrower to refinance the loan, and get into a situation where he is unable to come out of it. So before applying for the loan, the borrower should also check the credentials of the company.

Debt consolidation also means that the unsecured loans are all becoming secure loans. This will mean that the borrower risks the chances of losing his property if he is not paying back on time. Though in this debt, the borrower needs to pay only monthly installments, the entire amount including the interest may calculate to a much higher amount.

Some companies also offer the options of offering debt consolidation loans, without it being secured. This option will also have to be looked into by the borrower. And he must seek the advice of a financial consultant before moving forward.

8 Danger Signals to foretell you are on the debt road

Posted by | Posted in Debt Management | Posted on 05-12-2010

Danger signal 1
Your credit card expenses increase while your income is the same or decreasing. When this happens stop using your cards and manage on whatever cash you have available. Stop when the cash is finished unless there is a great emergency – do not take out the cards. Diminishing income will suffer greatly if the bills of the credit card are added to it; get away from card shopping till your income stabilizes.

Danger signal 2
You are unable to pay more than your minimum balance on the card debts; this is when it should be obvious that cash problem has started; this is the time when you should leave the credit cards and try to pay off all your outstanding by wise financial management.

Danger signal 3
You find yourself borrowing on one card to pay on another. This is the message that you are entering unmanageable debt – so take charge and control all unnecessary expenses right away. Try to pay off the debt of one card and use only one card – that also only in acute emergency.

Danger signal 4
You observe that you have more than 5-6 credit cards. Ideally, you should not have or use more than two credit cards. There are many who advocate the use of only one card while – if you have more – you can keep the rest locked for any emergency. When you have too many operational cards, you can very easily over spend and find yourself in a financial mess.

Danger signal 5
You are finding that you are using your credit more and more for emergency payments – and the emergency payments include grocery bills. The moment you include in the emergency payment  list ordinary purchases, you should understand that something is seriously.

Danger signal 6
Your credit card payments keep you working overtime – if you observe that you do not have sufficient funds to cover your credit card payments – that means you are extending your income to your credit card limits – this is a definitely a danger signal.

Danger signal 7
You are at limit of all your credit cards. When you find yourself to have topped the limits of your credit cards –this obviously shows you that your income is not sufficient to take care of your expenses – and or you are spending too much.

Danger signal 8
You are gambling and paying the debts with the credit cards. Never ever pay your gambling debts with the credit cards because this will really create an egg-and-chicken vicious circle from where you will never get out.

Get Out of Debt: The First Step

Posted by | Posted in Debt Management | Posted on 18-09-2010

The World is in debt.  Almost all people and organizations are carrying debt to survive, including the Governments of all of our Nations.  This is just a fact of life and this is the way that we were raised.  You must acquire debt to survive; there is no other way.

This is entirely not true.  In fact if we chose to save for the things that we really want, we would be able to afford a lot more than we already have.

Just think about it for a minute.  Without debt, we would only have to pay our “bills”.  Rent or Mortgage (Debt, but necessary), Utilities and Insurance.  Imagine all of the money that you would have at the end of the month.  No credit card payments, no car payment, no personal loans.  Now you can afford some of the luxuries that you used to pay for month after month on credit and it won’t cost you three times the cost of the purchase as with credit.

Okay, this sounds great in theory, but it is a little late.  Boy, if only you had told me this when I was 18 (like I would really have listened).  I am in debt up to eyeballs and there is no way out.  This is the way that it is supposed to be.  This is the only way that it can be.


This is the exact reason that everyone stays in debt and why the credit card companies are making fortunes.  You can get yourself out of debt and take back control of your life.  Of course it will take desire, will power, and perseverance.  Most importantly you have to take the first step.

The key to getting out of debt is really quite simple; organization.
You cannot help yourself get out of any situation without first realizing what exactly you are into.  This indeed is the first step.

Most people go on day-to-day paying their bills as if it is just a part of life.  They get the bill, pay the minimum or a little over and wait for the next one.  This is a vicious cycle and it has no end.  As long as you keep doing this, is as long as you will stay in debt and stay at the mercy of your creditors.

You first need to gather all of your most recent statements.  Write down or input (I use Excel for this) all of your creditors.  At this point I would even put in your mortgage holder to give you the whole picture.  Find out your current balance for each and input that.  Now input your minimum payment for each one.  At this point I would not even worry about interest rates.

You now have the whole picture.  Sorry, I didn’t mean to scare you.  Now you know what you are up against and you can make a plan.  Just remember, try not to take on additional debt.

You are now ready to take control of you financial life.  Say goodbye to debt, say hello to life!

Advantages of Student Debt Consolidation

Posted by | Posted in Debt Management | Posted on 17-11-2009

Student Debt Consolidation refers to consolidating all debts such as outstanding credit card debt, mortgage loans, student loan debt, car loans, etc., into one simple aggregate loan with a lower interest rate and lower monthly loan payments.

StudentDebtConsolidationPrograms.com offers different student debt consolidation options and there are some very flexible student debt consolidation programs available to meet the unique needs of the student. For example, if a student has outstanding unconsolidated student loan debt and is six months from graduation, then they should already be exploring those available options. The right student debt consolidation program can mean substantially lower monthly student debt payments, savings of thousands of pounds every year in total student loan debt balance, and the ease of just having to make one student loan debt payment. There is no cost or obligation to consolidate a student loan, so there is nothing to lose and everything to gain by exploring all student debt consolidation programs and options.

From reducing monthly payments by using Student debt consolidation programs, to repaying student loan debt and improving credit ratings there’s always a way a student can improve their student loan debt finances.

First and foremost, consolidating all outstanding payments into one single sum simplifies the task of managing all their student loans and their payments. Instead of making credit card payments on a number of different credit card loans, students now only have to make a single Student Debt Consolidation payment.

Student debt consolidation leads to a significant reduction in rate of interest. This is especially true in the case of credit card debt consolidation. Most credit card companies command an alarming rate of interest, especially when behind in payments. Going for a student debt consolidation loan is much cheaper because the right student debt consolidation program companies provide a much lower rate of interest than those commanded by credit card companies.