No-Cost Student Loan Consolidation
No-Cost Student Loan Consolidation
A no-cost student loan consolidation ? doesn't that just sound too good to be true? Think about it. You have just accrued thousands of dollars in debt through student loans after 4 years of college, or possibly even more. Then, a company offers to take all of your loans off of your hands, put them into one central loan, and do it all for free! Well, while it might not be too good to be true, it all depends around your particular situation, which could make this a "free" process, or could still work out to the benefit of the consolidation company that you are working with throughout the process.
How A Student Loan Consolidation Works
Here is how the student loan consolidation works. You have used up thousands of dollars in student loans to pay your way through college, obtain housing throughout college, and pay for other odds-and-ends while attending college. A student loan consolidation then takes all these different loans, pays for each of them, at which time you then pay the student loan consolidation company for the total amount of loans taken out during college.
Example of Student Loan Consolidation
If you were to have outstanding loans of $5000 to one company, $6000 to another, and $9000 to a third, the student loan consolidation allows you to owe $20000 to one company, rather than to three. This can save you money in the long run, as these companies also may be able to offer you a competitive interest rate, which means you will be paying less overall for your student loans in a shorter amount of time and to only one company.
Potential Student Loan Consolidation Problems
Problems can occur with student loan consolidations if you catch a deal that does not work out favorably to your situation. For instance, if you choose a no-cost student loan consolidation that does not offer you a low interest rate, you could actually end up paying them more than you originally would have! It is important that you choose a company not for their "no-cost" approach, but for their willingness to get your student loans paid off with a consolidation that promotes a quick pay-off with minimal interest rates.
This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about how to get No-Cost Student Loan Consolidation at www.NextStudent.com .
My goal is to help every student succeed - education is one of the most important things a person can have, so I have made it my personal mission to help every student pay for their education. Aside from that, I am just a pretty average girl from SD.
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Monday, December 29, 2008
How to Overall lower payments due to reduced interest rates
Going Debt Consolidation Way!
We are aware of the fact that it is easy to get into debts, but on the contrary overcoming it is very complicated. Now give an end to your fear of lenders as more and more companies in the UK are offering solutions to tackle debts of individuals- both home owners and tenants. The buzzword these days for purging debts is debt consolidation. Debt consolidation pertains to clubbing of many outgoing payments to the lenders. It gives a greater ease to customers to wipe out debts in a smart way.
With the rise of incomes and subsequently enhancement of spending by the middle class; the money market is booming. The whole spectrum of financial industry is augmenting its benefits by increasing its commercial activity. More and more UK residents are acquiring credit cards and converting to compulsive shoppers. Every where there is hue and cry: more production and more consumption and generating profits by sales volumes. Along with rising incomes there is proportional rise in debts also. More and more UK residents are falling into the debt wad due to the mismanagement of finances: or you can say due to the disparity between income and expenditures.
With paradigm shifts in the financial services sectors and gradual transition from the sellers market to the buyers market, more and more financial firms in the United Kingdom are offering solutions to manage debts. All companies assert that they are the best in the industry and claim to offer tailor made solutions to fit in the profile of diversified customers.
Credit cards have eased the way we shop around and spend money. But its convenience tempts many to buy any xyz thing they feel the need of. When they realise that they have spent beyond their ability, it is too late. Even other unexpected and emergency expenses can disrupt your budget figures. It can be- medical bills, store bills, utility bills, credit cards, loan payments. Somehow the individual has to seek the assistance and counsel of financial experts in working out ways to resolve it. The final choice is theirs but there are myriad ways to solve this. UK residents seek assistance of those finance firms which guide them throughout the loan process and provide them with information which is unbiased and help them in understanding relevant debt consolidation financial products for their situations.
When it comes to looking around for debt consolidation loan and mortgage quotes, it is prudent to search for firms which can give competitive quotes from a wide range of leading UK companies. A wide range of financial tools are available as a route to get rid of debts. It's a buyer market now and you could avail the best deal for yourself.
There has been regular market research on the financial markets and implementation of the outcome of the researches. It has been found that a significant number of UK residents are not aware of the benefits of the debt consolidation options and are suspicious about how it works. There is a need to increase the awareness of the debt consolidation solutions and evolve new varieties and features for debt consolidation solutions. There is a great potential to increase the benefits of the debt consolidation solutions.
Richard Thomas financial expert at chanceforloans says: "Bankruptcy is a stage which should be strictly avoided because it affects the credit ranking on the individual for a decade and one is totally cut off from access to any type of loans. No financial institution is likely to trust him. It also shows its adverse impact on regular conduct of business." Growing finance firms have redrawn their path ahead by expanding their activities all around the United Kingdom and offering excellent customer oriented services. Some independent finance firms have even drawn a new track ahead of other finance provider by bestowing equal opportunity to the customers with poor credit or no credit. All borrowers are suggested to properly analyse their case before fixing decision on any debt consolidation alternatives.
Every year the requests for debt consolidation are increasing in UK and amounting to worth hundred thousands of pounds. Emerging finance companies cater to the requirements of all by searching the consolidation deals which best matches their profile. We expect customers to stay informed about the various options available in the market and himself choose the one after analysing their case.
Debt consolidation carries many benefits for the borrowers:
Single payment against multiple payments
Sliding interest rates
Overall lower payments due to reduced interest rates
Deal with single dealer instead of many
Elimination of credit card and other utility bills
End to harassing calls of lenders
Save money and be affordable to buy what you wanted
There are several companies in the market which claim to furnish quick approval of the loan request; but few stand by their promises. You have to decide yourself where to go and set your deal.
To sum up, debt is a burden which if left unresolved will entangle more and more in it. Before fixing your decision on any option by a particular company review the benefits against the cost. Also see the mistakes you made earlier pertaining to your mismanagement of income and expenditures and seek lessons from it. To avoid any further dilemma you have to ensure that you make repayments on time.
Remember that definitely there are several finance companies to support debtors by making their lives better and pleasant and to help them reach towards better financial well being, but that is at a cost. And you have to analyse upto what extent you are prepared to bear it. There are several solutions for debtors for debt consolidation but you have to turn your attention towards your income and the extent you are ready to pay as the cost of consolidation. We expect that in the clear light of day you will apply wisdom and seek the perfect route to the way of better financial well being and happiness.
James Taylor holds a Master's degree in Commerce from JNU he is working as financial consultant for http://www.chanceforloans.co.uk. To find a Debt Consolidation loan that best suits your needs visit his website.
We are aware of the fact that it is easy to get into debts, but on the contrary overcoming it is very complicated. Now give an end to your fear of lenders as more and more companies in the UK are offering solutions to tackle debts of individuals- both home owners and tenants. The buzzword these days for purging debts is debt consolidation. Debt consolidation pertains to clubbing of many outgoing payments to the lenders. It gives a greater ease to customers to wipe out debts in a smart way.
With the rise of incomes and subsequently enhancement of spending by the middle class; the money market is booming. The whole spectrum of financial industry is augmenting its benefits by increasing its commercial activity. More and more UK residents are acquiring credit cards and converting to compulsive shoppers. Every where there is hue and cry: more production and more consumption and generating profits by sales volumes. Along with rising incomes there is proportional rise in debts also. More and more UK residents are falling into the debt wad due to the mismanagement of finances: or you can say due to the disparity between income and expenditures.
With paradigm shifts in the financial services sectors and gradual transition from the sellers market to the buyers market, more and more financial firms in the United Kingdom are offering solutions to manage debts. All companies assert that they are the best in the industry and claim to offer tailor made solutions to fit in the profile of diversified customers.
Credit cards have eased the way we shop around and spend money. But its convenience tempts many to buy any xyz thing they feel the need of. When they realise that they have spent beyond their ability, it is too late. Even other unexpected and emergency expenses can disrupt your budget figures. It can be- medical bills, store bills, utility bills, credit cards, loan payments. Somehow the individual has to seek the assistance and counsel of financial experts in working out ways to resolve it. The final choice is theirs but there are myriad ways to solve this. UK residents seek assistance of those finance firms which guide them throughout the loan process and provide them with information which is unbiased and help them in understanding relevant debt consolidation financial products for their situations.
When it comes to looking around for debt consolidation loan and mortgage quotes, it is prudent to search for firms which can give competitive quotes from a wide range of leading UK companies. A wide range of financial tools are available as a route to get rid of debts. It's a buyer market now and you could avail the best deal for yourself.
There has been regular market research on the financial markets and implementation of the outcome of the researches. It has been found that a significant number of UK residents are not aware of the benefits of the debt consolidation options and are suspicious about how it works. There is a need to increase the awareness of the debt consolidation solutions and evolve new varieties and features for debt consolidation solutions. There is a great potential to increase the benefits of the debt consolidation solutions.
Richard Thomas financial expert at chanceforloans says: "Bankruptcy is a stage which should be strictly avoided because it affects the credit ranking on the individual for a decade and one is totally cut off from access to any type of loans. No financial institution is likely to trust him. It also shows its adverse impact on regular conduct of business." Growing finance firms have redrawn their path ahead by expanding their activities all around the United Kingdom and offering excellent customer oriented services. Some independent finance firms have even drawn a new track ahead of other finance provider by bestowing equal opportunity to the customers with poor credit or no credit. All borrowers are suggested to properly analyse their case before fixing decision on any debt consolidation alternatives.
Every year the requests for debt consolidation are increasing in UK and amounting to worth hundred thousands of pounds. Emerging finance companies cater to the requirements of all by searching the consolidation deals which best matches their profile. We expect customers to stay informed about the various options available in the market and himself choose the one after analysing their case.
Debt consolidation carries many benefits for the borrowers:
Single payment against multiple payments
Sliding interest rates
Overall lower payments due to reduced interest rates
Deal with single dealer instead of many
Elimination of credit card and other utility bills
End to harassing calls of lenders
Save money and be affordable to buy what you wanted
There are several companies in the market which claim to furnish quick approval of the loan request; but few stand by their promises. You have to decide yourself where to go and set your deal.
To sum up, debt is a burden which if left unresolved will entangle more and more in it. Before fixing your decision on any option by a particular company review the benefits against the cost. Also see the mistakes you made earlier pertaining to your mismanagement of income and expenditures and seek lessons from it. To avoid any further dilemma you have to ensure that you make repayments on time.
Remember that definitely there are several finance companies to support debtors by making their lives better and pleasant and to help them reach towards better financial well being, but that is at a cost. And you have to analyse upto what extent you are prepared to bear it. There are several solutions for debtors for debt consolidation but you have to turn your attention towards your income and the extent you are ready to pay as the cost of consolidation. We expect that in the clear light of day you will apply wisdom and seek the perfect route to the way of better financial well being and happiness.
James Taylor holds a Master's degree in Commerce from JNU he is working as financial consultant for http://www.chanceforloans.co.uk. To find a Debt Consolidation loan that best suits your needs visit his website.
How To Consolidate Your Stafford Loans
Stafford Loan Consolidation
Stafford Loan Consolidation
A Stafford Loan, which can help to finance your way through a college or university, comes in two forms:
Subsidized Stafford Loans
A subsidized Stafford Loan, which you can receive based upon your specific financial aid. When a Stafford loan is subsidized, you are not required to pay any interest on the loan while you attend school. The federal government subsidizes the interest accrued on your account while you attend school and does not charge you interest until you finish school.
Unsubsidized Stafford Loans
An unsubsidized Stafford Loan, which you do not receive based upon your own specific financial aid. Rather, you can receive this type of loan but must pay interest on the loan even as you are still taking classes and enrolled in school.
Two Different Stafford Loans?
Often times, college and university students find that Stafford loans will be dispensed to them both as subsidized and unsubsidized loans, meaning that part of the loan will be subsidized and part of it will not. As they move through college, this means that they are paying interest on the loans, or simply allowing the interest to build up over time.
How To Consolidate Your Stafford Loans
Student loan consolidation can help you to combine the two types of loans into one low monthly payment that makes it easier and quicker for you to pay off your college loans. You have the ability to find a loan consolidation company, who will then work with you to take all of your Stafford loans, both subsidized and unsubsidized, and place them into one central loan that can then be paid off over time.
How exactly will this help to save you time and money? For starters, you will only be paying interest on one loan, rather than two, and by consolidating your loans, you can often achieve more favorable interest rates on your debt. In the end, this will allow you to save time, money, and frustration that comes with paying off loans over long periods of time.
This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about how to get Stafford Loan
Consolidation at http://www.NextStudent.com.
My goal is to help every student succeed - education is one of the most important things a person can have, so I have made it my personal mission to help every student pay for their education. Aside from that, I am just a pretty average girl from SD.
Stafford Loan Consolidation
A Stafford Loan, which can help to finance your way through a college or university, comes in two forms:
Subsidized Stafford Loans
A subsidized Stafford Loan, which you can receive based upon your specific financial aid. When a Stafford loan is subsidized, you are not required to pay any interest on the loan while you attend school. The federal government subsidizes the interest accrued on your account while you attend school and does not charge you interest until you finish school.
Unsubsidized Stafford Loans
An unsubsidized Stafford Loan, which you do not receive based upon your own specific financial aid. Rather, you can receive this type of loan but must pay interest on the loan even as you are still taking classes and enrolled in school.
Two Different Stafford Loans?
Often times, college and university students find that Stafford loans will be dispensed to them both as subsidized and unsubsidized loans, meaning that part of the loan will be subsidized and part of it will not. As they move through college, this means that they are paying interest on the loans, or simply allowing the interest to build up over time.
How To Consolidate Your Stafford Loans
Student loan consolidation can help you to combine the two types of loans into one low monthly payment that makes it easier and quicker for you to pay off your college loans. You have the ability to find a loan consolidation company, who will then work with you to take all of your Stafford loans, both subsidized and unsubsidized, and place them into one central loan that can then be paid off over time.
How exactly will this help to save you time and money? For starters, you will only be paying interest on one loan, rather than two, and by consolidating your loans, you can often achieve more favorable interest rates on your debt. In the end, this will allow you to save time, money, and frustration that comes with paying off loans over long periods of time.
This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about how to get Stafford Loan
Consolidation at http://www.NextStudent.com.
My goal is to help every student succeed - education is one of the most important things a person can have, so I have made it my personal mission to help every student pay for their education. Aside from that, I am just a pretty average girl from SD.
Whats the Difference Between Debt Settlement and Debt Consolidation?
The Debt Settlement process involves negotiating with your creditors to settle your debt for amounts significantly less than you currently owe; typically debt settlement can settle your debts for 40-60% of your current balances. This will save you sizable amounts of money on debt principal and interest. It also provides you with the opportunity to pay-off your debts faster.
Debt Consolidation can be accomplished two ways. The first method is through a debt consolidation loan, and second through a debt consolidation service. A debt consolidation loan provides funds to consolidate all of your debts into one single monthly payment and is traditionally secured in the form of home equity. A debt consolidation loan reduces the number of payments you have going out monthly and can simplify your debt problem. However, a debt consolidation loan does not mean you are debt-free; the debts have just been transferred to a new creditor.
Hopefully, this debt consolidation loan will provide you with a lowered APR and allow you to pay off the new loan quicker. This may sound like a good solution to avoid bankruptcy and get out of debt; however, it can also damage your credit and cause you to pay back far more than if you had selected a debt settlement or debt arbitration program.
Debt consolidation services claim to provide assistance and guidance for people with debt and credit problems. They claim that they will work with your creditors to provide you lower interest rates and payments. However, these debt consolidation services spend millions of dollars each and every year on advertising and exist for one purpose only; to ensure that the credit card issuers get paid back every cent that is owed. They call themselves non-profit debt consolidation companies but, this can be misleading. The bottom line is that these "non-profit" debt consolidation companies are funded by the credit card companies that they are supposedly "negotiating" with to help you
Alan Barnes IAPDA Certified Debt Arbitrator President and CEO of Debt Regret
http://www.debtregret.com
Debt Consolidation can be accomplished two ways. The first method is through a debt consolidation loan, and second through a debt consolidation service. A debt consolidation loan provides funds to consolidate all of your debts into one single monthly payment and is traditionally secured in the form of home equity. A debt consolidation loan reduces the number of payments you have going out monthly and can simplify your debt problem. However, a debt consolidation loan does not mean you are debt-free; the debts have just been transferred to a new creditor.
Hopefully, this debt consolidation loan will provide you with a lowered APR and allow you to pay off the new loan quicker. This may sound like a good solution to avoid bankruptcy and get out of debt; however, it can also damage your credit and cause you to pay back far more than if you had selected a debt settlement or debt arbitration program.
Debt consolidation services claim to provide assistance and guidance for people with debt and credit problems. They claim that they will work with your creditors to provide you lower interest rates and payments. However, these debt consolidation services spend millions of dollars each and every year on advertising and exist for one purpose only; to ensure that the credit card issuers get paid back every cent that is owed. They call themselves non-profit debt consolidation companies but, this can be misleading. The bottom line is that these "non-profit" debt consolidation companies are funded by the credit card companies that they are supposedly "negotiating" with to help you
Alan Barnes IAPDA Certified Debt Arbitrator President and CEO of Debt Regret
http://www.debtregret.com
What is the Difference Between Unsecured and Secured Debt?
What is the Difference Between Unsecured and Secured Debt?
A secured debt is a debt in which the creditor maintains a security interest in an item or piece of personal property such as a house or an automobile. With secured debts, if you fall behind on payments, the lender can repossess the property that originally secured the debt. An additional drawback to secured debt is the fact that you may remain liable for the deficiency balance owing on the debt after your property has been repossessed and sold.
However, the laws regarding home mortgages vary from state to state. This means that a lender's debt recovery rights will depend on the terms of your mortgage and whether any other lenders also have an interest in the property.
Unsecured debt is debt in which you borrow from a creditor to obtain goods or services on credit in exchange for your promise to repay the debt. The primary difference between secured and unsecured debt is that unsecured debt is not collateralized by personal property.
Unsecured debt is commonly given in the form of credit card debt, commercial debt, medical debt, and personal loans. If you fall behind on an unsecured debt, lenders can take legal action against you, but more commonly will try to work out a reasonable debt settlement. It is possible for a secured debt to become an unsecured debt when the property that is securing the loan has already been repossessed and sold by the creditor.
Traditionally, if the sale of the property does not cover the full amount of the debt, it will result in a deficiency balance which is still the responsibility of the consumer. This deficiency balance is now considered an unsecured debt because no property is securing it. In many cases, this balance can be successfully resolved through a debt settlement program.
Alan Barnes IAPDA Certified Debt Arbitrator and President and CEO of Debt Regret
http://www.debtregret.com
A secured debt is a debt in which the creditor maintains a security interest in an item or piece of personal property such as a house or an automobile. With secured debts, if you fall behind on payments, the lender can repossess the property that originally secured the debt. An additional drawback to secured debt is the fact that you may remain liable for the deficiency balance owing on the debt after your property has been repossessed and sold.
However, the laws regarding home mortgages vary from state to state. This means that a lender's debt recovery rights will depend on the terms of your mortgage and whether any other lenders also have an interest in the property.
Unsecured debt is debt in which you borrow from a creditor to obtain goods or services on credit in exchange for your promise to repay the debt. The primary difference between secured and unsecured debt is that unsecured debt is not collateralized by personal property.
Unsecured debt is commonly given in the form of credit card debt, commercial debt, medical debt, and personal loans. If you fall behind on an unsecured debt, lenders can take legal action against you, but more commonly will try to work out a reasonable debt settlement. It is possible for a secured debt to become an unsecured debt when the property that is securing the loan has already been repossessed and sold by the creditor.
Traditionally, if the sale of the property does not cover the full amount of the debt, it will result in a deficiency balance which is still the responsibility of the consumer. This deficiency balance is now considered an unsecured debt because no property is securing it. In many cases, this balance can be successfully resolved through a debt settlement program.
Alan Barnes IAPDA Certified Debt Arbitrator and President and CEO of Debt Regret
http://www.debtregret.com
How to find out what types of loans you qualify for
Debt Consolidation - Just Lump It All Together!
In a world where people use credit as much as they drink water, it is no surprise that so many people need debt consolidation loans. Debt consolidation loans sound like a good way of getting your debt cleaned up, but are they? If you need help getting out of debt, consider all your options before choosing. You will be surprised to learn what is available to help you.
Whether you need to consolidate medical bills or maybe just credit card debt consolidation, finding the right option is easy when you know how. First you need to find out what types of loans you qualify for. If you own a home and have some equity in it, you may be able to cash that out into a home equity loan. This is a good option if you have a good relationship with your current lender and have enough equity to cover the loan amount.
Other types of loans, or consolidation loans, can be helpful as well. You can find free debt consolidation companies out there that will help you, but don't be fooled into believing these companies won't charge you something. Often times there are fees to pay. Another consideration isn't a loan at all. Non profit debt consolidation is a program for those who need help getting out. Often times, these companies can lower or eliminate your credit card interest rates because they have a relationship with your creditors. Most of the time, you set up a fixed amount of money that they take from your checking account monthly. This amount is what they have lowered your credit card monthly fees to. It is all of your accounts in one. Usually, this amount will pay off your bills within a certain amount of months assuming that you pay them monthly.
Whatever method you choose, find some information out online or through your local banks and lenders. There are many companies competing for your business.
Once you have the information you can make a decision that is good for you and your lender.
About The Author
Mike Yeager, Publisher
http://www.a1-loans-4u.com/
mjy610@hotmail.com
In a world where people use credit as much as they drink water, it is no surprise that so many people need debt consolidation loans. Debt consolidation loans sound like a good way of getting your debt cleaned up, but are they? If you need help getting out of debt, consider all your options before choosing. You will be surprised to learn what is available to help you.
Whether you need to consolidate medical bills or maybe just credit card debt consolidation, finding the right option is easy when you know how. First you need to find out what types of loans you qualify for. If you own a home and have some equity in it, you may be able to cash that out into a home equity loan. This is a good option if you have a good relationship with your current lender and have enough equity to cover the loan amount.
Other types of loans, or consolidation loans, can be helpful as well. You can find free debt consolidation companies out there that will help you, but don't be fooled into believing these companies won't charge you something. Often times there are fees to pay. Another consideration isn't a loan at all. Non profit debt consolidation is a program for those who need help getting out. Often times, these companies can lower or eliminate your credit card interest rates because they have a relationship with your creditors. Most of the time, you set up a fixed amount of money that they take from your checking account monthly. This amount is what they have lowered your credit card monthly fees to. It is all of your accounts in one. Usually, this amount will pay off your bills within a certain amount of months assuming that you pay them monthly.
Whatever method you choose, find some information out online or through your local banks and lenders. There are many companies competing for your business.
Once you have the information you can make a decision that is good for you and your lender.
About The Author
Mike Yeager, Publisher
http://www.a1-loans-4u.com/
mjy610@hotmail.com
How to find the best Student Loan Debt Program
Overwhelmed By Student Loan Debt? Consider a Consolidate Student Loan
A consolidate student loan is the perfect solution for people who need help managing their debt. If you have several different loan payments but want to make only one payment per month, you should apply for a Federal Consolidation Loan.
With loan consolidation, your lender will combine your present loans into one single loan. If you do decide to get a consolidate student loan, you will pay interest on a fixed rate. The rate is determined by the average of your loans, and is averaged up to the nearest .125 percent. If you make direct loan electronic payments, you may get a lower interest rate.
As student loan debt is usually not the largest debt a person has, it may make sense to include it in a consolidate student loan.
Tips on repaying your Consolidate Student Loan
Most people use student loan consolidation as a way to manage debts. Most often, a consolidate student loan will save money. Be aware that although a consolidate loan reduces monthly payments, it will likely raise the interest amount.
Because of this, it is a good idea to try to pay off as much of your consolidate student loan as soon as possible. Do this by trying to increase your monthly payments. Be aware that there are certain deferment programs available.
For example, unemployment or economic hardship may cause the consolidate student loan to be reduced.
About The Author
Mike Yeager, Publisher
http://www.a1-loans-4u.com/
A consolidate student loan is the perfect solution for people who need help managing their debt. If you have several different loan payments but want to make only one payment per month, you should apply for a Federal Consolidation Loan.
With loan consolidation, your lender will combine your present loans into one single loan. If you do decide to get a consolidate student loan, you will pay interest on a fixed rate. The rate is determined by the average of your loans, and is averaged up to the nearest .125 percent. If you make direct loan electronic payments, you may get a lower interest rate.
As student loan debt is usually not the largest debt a person has, it may make sense to include it in a consolidate student loan.
Tips on repaying your Consolidate Student Loan
Most people use student loan consolidation as a way to manage debts. Most often, a consolidate student loan will save money. Be aware that although a consolidate loan reduces monthly payments, it will likely raise the interest amount.
Because of this, it is a good idea to try to pay off as much of your consolidate student loan as soon as possible. Do this by trying to increase your monthly payments. Be aware that there are certain deferment programs available.
For example, unemployment or economic hardship may cause the consolidate student loan to be reduced.
About The Author
Mike Yeager, Publisher
http://www.a1-loans-4u.com/
How to Evaluate Online Lenders Auto Loan
16.4% APR $5,000 Auto Loan...HELP!
Are you the victim of a high interest rate auto loan? If so, the following email discussion may help you. Read on:
DEAR LoanResources.Net:
I was very impressed with your article entitled "8 Point Checklist, Evaluating Online Lenders."
I have tried several sources to refinance my auto. I only have 2 more years to pay $245.04 a month. I owe 4,414.00 on the car loan.
This may not seem like a lot of money but I would like a lower interest rate on my car loan which is now $16.4% APR.
I want to still pay it off in 24 months but at a lower rate so that I can use the money saved to help pay off other bills.
In my internet searches, the auto refinance loans required that you borrow more money than I need. I tried to search for unsecured personal loans on your website and they also required that I borrow more money.
I have a very good credit record and I am working to get some of my bills paid off.
Is there anything you can suggest so that I can get a lower rate auto loan for under $5,000? Any assistance will be appreciated.
Thanks. Geraldine W.
DEAR Geraldine:
Sorry I have not gotten back to you sooner. I took a couple weeks off to be with family...Thanks for the compliment on the article!
Anyway, I read your email and I do indeed have a suggestion or two that I'm happy to share.
A COUPLE THINGS INITIALLY:
1. First, you're paying a very high interest rate at 16.4% APR for an auto loan! I'm going to assume that your statement as to your good credit is accurate. If that's true, then you do indeed need to fix this.
2. Since you only need $5000, with the intention of paying it off in 2 years or less, I don't think you should look for a refinance auto loan or a refinance on your home. Indeed, the bank is going to want to loan you much more money, usually at least $25,000. While a refinance or equity loan on your home does offer tax benefits, we're only talking about interest on $5,000 over the course of 2 years. I have another idea you may not have considered.
HAVE YOU CONSIDERED?
Have you considered just putting the balance of your car loan on a credit card that has a lower interest rate?
1. Credit Cards are, indeed, unsecured lines of credit with financial institutions.
2. They are the perfect financial vehicle for a $5,000 transfer of debt, with added flexibility, and you should be able to find an interest rate between 9 to 11%, and better, on average.
3. IN ADDITION! Once approved, the bank will usually give you blank checks for balance transfers (sometimes they'll just do it for you right over the phone)...,
4. AND GUESS WHAT? The majority of the time, the incentive interest rates on the balance transfers are EXTREMELY low; sometimes zero percent for up to 6 months to a year.
5. IN ADDITION! you can apply for incentive cards that provide rewards for your spending....free airline miles, cash back programs, etc. I use the American Express Blue, and I get cash back of up to 3% on everything I spend. So, for $5,000, 3% cash back, AMEX? pays me $150.
How do you like them apples? The bank pays YOU to borrow money.
RECOMMENDED PLAN OF ACTION:
So, Geraldine, here's what I recommend you do:
1. Go back to our website, and explore the credit card offers we've recommended. We've picked out what we think are the best offers, and there are a LOT of them, so think of it as a much needed shopping trip! Pay particular attention to our links for "incentive cards". We have two pages of them.
2. Apply for whatever card or cards suit your tastes and needs. There are so many great reward cards. Limit yourself to only your imagination.
3. Get approved, receive card, and receive balance transfer checks.
4. Pay off loan to 16.4% bank!
5. Pay off credit card loan (with extremely low rate and incentives), at your leisure!
?And enjoy the fact that you just made an excellent financial move, saved money, made money, and gave yourself the flexibility to manage your debt on your own schedule...
Hope this helps...Let me know how it all works out.
We've enjoyed providing this information to you, and we wish you the best of luck in your pursuits. Remember to always seek out good advice from those you trust, and never turn your back on your own common sense.
Publisher's Directions:
This article may be freely distributed so long as the copyright, author's information, disclaimer, and an active link (where possible) are included.
Disclaimer: Statements and opinions expressed in the articles, reviews and other materials herein are those of the authors. While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. The author will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.
Copyright 2005, by LoanResources.Org , This article is available in full format at: Auto Loan Help , Tom Levine provides a solid, common sense approach to solving problems and answering questions relating to consumer loan products. His website seeks to provide free online resources for the consumer, including rate-watch, tips and articles, financial communication, news, and links to products and services.
Are you the victim of a high interest rate auto loan? If so, the following email discussion may help you. Read on:
DEAR LoanResources.Net:
I was very impressed with your article entitled "8 Point Checklist, Evaluating Online Lenders."
I have tried several sources to refinance my auto. I only have 2 more years to pay $245.04 a month. I owe 4,414.00 on the car loan.
This may not seem like a lot of money but I would like a lower interest rate on my car loan which is now $16.4% APR.
I want to still pay it off in 24 months but at a lower rate so that I can use the money saved to help pay off other bills.
In my internet searches, the auto refinance loans required that you borrow more money than I need. I tried to search for unsecured personal loans on your website and they also required that I borrow more money.
I have a very good credit record and I am working to get some of my bills paid off.
Is there anything you can suggest so that I can get a lower rate auto loan for under $5,000? Any assistance will be appreciated.
Thanks. Geraldine W.
DEAR Geraldine:
Sorry I have not gotten back to you sooner. I took a couple weeks off to be with family...Thanks for the compliment on the article!
Anyway, I read your email and I do indeed have a suggestion or two that I'm happy to share.
A COUPLE THINGS INITIALLY:
1. First, you're paying a very high interest rate at 16.4% APR for an auto loan! I'm going to assume that your statement as to your good credit is accurate. If that's true, then you do indeed need to fix this.
2. Since you only need $5000, with the intention of paying it off in 2 years or less, I don't think you should look for a refinance auto loan or a refinance on your home. Indeed, the bank is going to want to loan you much more money, usually at least $25,000. While a refinance or equity loan on your home does offer tax benefits, we're only talking about interest on $5,000 over the course of 2 years. I have another idea you may not have considered.
HAVE YOU CONSIDERED?
Have you considered just putting the balance of your car loan on a credit card that has a lower interest rate?
1. Credit Cards are, indeed, unsecured lines of credit with financial institutions.
2. They are the perfect financial vehicle for a $5,000 transfer of debt, with added flexibility, and you should be able to find an interest rate between 9 to 11%, and better, on average.
3. IN ADDITION! Once approved, the bank will usually give you blank checks for balance transfers (sometimes they'll just do it for you right over the phone)...,
4. AND GUESS WHAT? The majority of the time, the incentive interest rates on the balance transfers are EXTREMELY low; sometimes zero percent for up to 6 months to a year.
5. IN ADDITION! you can apply for incentive cards that provide rewards for your spending....free airline miles, cash back programs, etc. I use the American Express Blue, and I get cash back of up to 3% on everything I spend. So, for $5,000, 3% cash back, AMEX? pays me $150.
How do you like them apples? The bank pays YOU to borrow money.
RECOMMENDED PLAN OF ACTION:
So, Geraldine, here's what I recommend you do:
1. Go back to our website, and explore the credit card offers we've recommended. We've picked out what we think are the best offers, and there are a LOT of them, so think of it as a much needed shopping trip! Pay particular attention to our links for "incentive cards". We have two pages of them.
2. Apply for whatever card or cards suit your tastes and needs. There are so many great reward cards. Limit yourself to only your imagination.
3. Get approved, receive card, and receive balance transfer checks.
4. Pay off loan to 16.4% bank!
5. Pay off credit card loan (with extremely low rate and incentives), at your leisure!
?And enjoy the fact that you just made an excellent financial move, saved money, made money, and gave yourself the flexibility to manage your debt on your own schedule...
Hope this helps...Let me know how it all works out.
We've enjoyed providing this information to you, and we wish you the best of luck in your pursuits. Remember to always seek out good advice from those you trust, and never turn your back on your own common sense.
Publisher's Directions:
This article may be freely distributed so long as the copyright, author's information, disclaimer, and an active link (where possible) are included.
Disclaimer: Statements and opinions expressed in the articles, reviews and other materials herein are those of the authors. While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. The author will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.
Copyright 2005, by LoanResources.Org , This article is available in full format at: Auto Loan Help , Tom Levine provides a solid, common sense approach to solving problems and answering questions relating to consumer loan products. His website seeks to provide free online resources for the consumer, including rate-watch, tips and articles, financial communication, news, and links to products and services.
How to negotiate your debts with your creditors
What Debt Settlement Companies Dont Tell You
If you're thinking about using a debt consolidation or debt settlement service to help you get out of debt faster and save money on your monthly payments, make sure you do your homework before choosing a company. There are definitely shams and scams out there.
First let me say that debt consolidation is *not* the same as debt settlement/negotiation, which most people don't realize.
Debt settlement companies charge hundreds of dollars as an initial "admin fee" to set up your account, plus a monthly service fee. The fees vary depending on the company and the amount of your debts.
Such companies take your money every month, but don't make monthly payments to your creditors! Instead, they put it in a trust account, negotiate your debts with your creditors, then make a lump-sum payment when there's enough in your account to pay a creditor in full.
That can take *years* depending on the amount of debt you have with each creditor. Meanwhile, you can be sued by your creditors and your wages can be garnished! (Or just don't make payments to your creditors. You'll end up in the same spot without paying someone to help you get there!)
Settlement companies don't ask your creditors to stop all interest, late fees and overlimit fees from accruing. That means while the negotiations are ongoing, your bills will continue to grow! So if you're sued and a judgement is brought against you, you'll owe more money than before!
And shoddy companies, which there are alot of, don't tell you *any* of this up front. I call it "getting permission by ommission" because they simply don't tell you how their program works *before* you sign an agreement with them. Or after, for that matter. But if you ask the right questions, eventually you'll figure it out. (Or when the crap hits the fan. Whichever comes first.)
Let me give you an example of how debt settlement works.
Let's say you have $20,000 in unsecured credit card debt. You owe $10,000 to one credit card company, $6,000 to another and $4,000 to a third. You agree to a 5 year plan where you pay $250 a month to the settlement company. (After all, $250 a month for 60 months is only $15,000, so you're saving $5,000 and you'll be debt-free in 5 years, right?)
The admin fee will cost you $750. Your first 3 monthly payments go towards that and nothing gets put into your trust account until your 4th month.
The settlement company keeps $50 of your $250 payment each month for the service fee. That means $200 a month is being added to your trust account.
Most debt settlement companies claim to be able to negotiate your debt for about 50% of what you owe. So let's use the lowest credit card debt as an example.
If you owe $4,000 and your creditor agrees to accept $2,000 as payment in full, it will take 10 months at $200 per month to have enough in your trust account to pay off just that one credit card.
But remember, your first 3 payments to the settlement company only paid the admin fee. That means your first credit card settlement is 14 months *after* you started sending them money.
So what's the problem? It's simple. Your creditor won't agree to accept half of your actual debt unless, or until, it can be paid in full. Otherwise, you're expected to make your normal monthly payments.
Since you don't have $2,000 in your trust account, and you won't have it until more than a year after you stopped paying your creditor directly, they'll probably take you to court and request that your wages be garnished long before you have that $2,000 built up.
And what about your other creditors? Well, they'll be waiting even longer to get their money from the settlement company. The $6,000 debt will take 15 *more* months to pay off, assuming your creditor waits that long and agrees to 50%. And that $10,000 bill? You do the math.
On the other hand, if you signed up for a 3 year plan with the settlement company, your debts would be paid off sooner. But, the question is, will your creditors wait that long? Probably not.
The facts are, you can negotiate with your creditors yourself. Most will agree to take a smaller monthly payment from you and stop all interest and fees from accruing. And, of course, you'll save thousands of dollars in fees to a settlement company.
Before signing up for any service, please be sure you check out the company thoroughly. And don't let the words "non-profit" fool you either. Alot of debt settlement companies claim to be non-profit.
Going back to the example above, if you pay them $15,000 over a 5 year time frame and they settle your debts at half of what you owed, they'll make $5,000 from you. I'd call that a profit, especially since they might not have actually helped you in any way.
Most companies will allow you to cancel your account and get a refund of what you've paid, less the non-refundable admin fee and the monthly service fees. If you feel you've been mislead about their program, don't hesitate to argue til the cows come home. File a complaint with the Better Business Bureau or hire an attorney if you feel you're getting nowhere.
You can visit the Better Business Bureau's website (http://www.bbb.org/) and find reports on hundreds of companies. Here's a small listing of companies that have poor reputations with the BBB:
National Consumer Debt Council LLC - Irvine, CA (A.K.A. NCDC, United Consumer Law Group)
Financial Rescue Services - Burbank, CA
Debt Legal Services - Anaheim, CA
American Debt Relief - Los Angeles, CA (A.K.A. A M Debt, American Debts Relief, Debt Relief)
Please be very cautious when choosing a debt help company and ask lots of questions before agreeing to anything. If you find they're evading your questions, run fast and run far. There are reputable companies out there, so keep looking until you find one.
About The Author
Denise Hall is the owner of Home Business on a Budget which specializes in tools and resources for your home business needs. Visit http://www.home-business-on-a-budget.com/ today. Subscribe to Home Business on a Budget Newsletter for weekly articles, tips, information and resources. To Subscribe mailto:hbb_newsletter@a1ebiz.com
If you would like to receive her new articles when they are written, please mailto:denise_hall@freeautobot.com
This article may be reprinted in its entirety with this resource box included, please send and email to: dmh0226@voyager.net
If you're thinking about using a debt consolidation or debt settlement service to help you get out of debt faster and save money on your monthly payments, make sure you do your homework before choosing a company. There are definitely shams and scams out there.
First let me say that debt consolidation is *not* the same as debt settlement/negotiation, which most people don't realize.
Debt settlement companies charge hundreds of dollars as an initial "admin fee" to set up your account, plus a monthly service fee. The fees vary depending on the company and the amount of your debts.
Such companies take your money every month, but don't make monthly payments to your creditors! Instead, they put it in a trust account, negotiate your debts with your creditors, then make a lump-sum payment when there's enough in your account to pay a creditor in full.
That can take *years* depending on the amount of debt you have with each creditor. Meanwhile, you can be sued by your creditors and your wages can be garnished! (Or just don't make payments to your creditors. You'll end up in the same spot without paying someone to help you get there!)
Settlement companies don't ask your creditors to stop all interest, late fees and overlimit fees from accruing. That means while the negotiations are ongoing, your bills will continue to grow! So if you're sued and a judgement is brought against you, you'll owe more money than before!
And shoddy companies, which there are alot of, don't tell you *any* of this up front. I call it "getting permission by ommission" because they simply don't tell you how their program works *before* you sign an agreement with them. Or after, for that matter. But if you ask the right questions, eventually you'll figure it out. (Or when the crap hits the fan. Whichever comes first.)
Let me give you an example of how debt settlement works.
Let's say you have $20,000 in unsecured credit card debt. You owe $10,000 to one credit card company, $6,000 to another and $4,000 to a third. You agree to a 5 year plan where you pay $250 a month to the settlement company. (After all, $250 a month for 60 months is only $15,000, so you're saving $5,000 and you'll be debt-free in 5 years, right?)
The admin fee will cost you $750. Your first 3 monthly payments go towards that and nothing gets put into your trust account until your 4th month.
The settlement company keeps $50 of your $250 payment each month for the service fee. That means $200 a month is being added to your trust account.
Most debt settlement companies claim to be able to negotiate your debt for about 50% of what you owe. So let's use the lowest credit card debt as an example.
If you owe $4,000 and your creditor agrees to accept $2,000 as payment in full, it will take 10 months at $200 per month to have enough in your trust account to pay off just that one credit card.
But remember, your first 3 payments to the settlement company only paid the admin fee. That means your first credit card settlement is 14 months *after* you started sending them money.
So what's the problem? It's simple. Your creditor won't agree to accept half of your actual debt unless, or until, it can be paid in full. Otherwise, you're expected to make your normal monthly payments.
Since you don't have $2,000 in your trust account, and you won't have it until more than a year after you stopped paying your creditor directly, they'll probably take you to court and request that your wages be garnished long before you have that $2,000 built up.
And what about your other creditors? Well, they'll be waiting even longer to get their money from the settlement company. The $6,000 debt will take 15 *more* months to pay off, assuming your creditor waits that long and agrees to 50%. And that $10,000 bill? You do the math.
On the other hand, if you signed up for a 3 year plan with the settlement company, your debts would be paid off sooner. But, the question is, will your creditors wait that long? Probably not.
The facts are, you can negotiate with your creditors yourself. Most will agree to take a smaller monthly payment from you and stop all interest and fees from accruing. And, of course, you'll save thousands of dollars in fees to a settlement company.
Before signing up for any service, please be sure you check out the company thoroughly. And don't let the words "non-profit" fool you either. Alot of debt settlement companies claim to be non-profit.
Going back to the example above, if you pay them $15,000 over a 5 year time frame and they settle your debts at half of what you owed, they'll make $5,000 from you. I'd call that a profit, especially since they might not have actually helped you in any way.
Most companies will allow you to cancel your account and get a refund of what you've paid, less the non-refundable admin fee and the monthly service fees. If you feel you've been mislead about their program, don't hesitate to argue til the cows come home. File a complaint with the Better Business Bureau or hire an attorney if you feel you're getting nowhere.
You can visit the Better Business Bureau's website (http://www.bbb.org/) and find reports on hundreds of companies. Here's a small listing of companies that have poor reputations with the BBB:
National Consumer Debt Council LLC - Irvine, CA (A.K.A. NCDC, United Consumer Law Group)
Financial Rescue Services - Burbank, CA
Debt Legal Services - Anaheim, CA
American Debt Relief - Los Angeles, CA (A.K.A. A M Debt, American Debts Relief, Debt Relief)
Please be very cautious when choosing a debt help company and ask lots of questions before agreeing to anything. If you find they're evading your questions, run fast and run far. There are reputable companies out there, so keep looking until you find one.
About The Author
Denise Hall is the owner of Home Business on a Budget which specializes in tools and resources for your home business needs. Visit http://www.home-business-on-a-budget.com/ today. Subscribe to Home Business on a Budget Newsletter for weekly articles, tips, information and resources. To Subscribe mailto:hbb_newsletter@a1ebiz.com
If you would like to receive her new articles when they are written, please mailto:denise_hall@freeautobot.com
This article may be reprinted in its entirety with this resource box included, please send and email to: dmh0226@voyager.net
How to Reduce Debt Through Lower Interest Loans
It happens to the majority of us, credit card debt accumulates and before we quite realize it, we are carrying a debt load that is far beyond our means. When this happens, we need to take immediate positive steps to knock down the debt as quickly as possible. One of the most efficient ways to do this is to reduce the amount of interest we pay by shopping around for a better rate and having our balances transferred over. By doing this, we pay more towards the principal, thereby reducing the duration of the loan and saving ourselves potentially thousands of dollars over the lifetime of the loan.
Typically, a credit card carrying a balance of $5000 dollars, with an interest rate of 17.5 % and a minimum monthly payment of $150 would take you 3 years and 10 months to pay off. The total interest accrued would amount to $1, 846. However, if you were to transfer your credit card debt to a lower interest rate loan of 7 %, that same $5000 paid in increments of $150 a month, would be paid off in 3 years, 2 months, substantially reducing the amount of interest to just $564. That's a savings of $1,282.
There are several options available for lowering your interest rates. Each one has its benefits and drawbacks. By educating yourself, you can choose the one that is best for you.
Consumer Credit Counseling Service
Consumer credit counseling services offers to consolidate your debts into one payment, negotiating with creditors on your behalf to have late fees waived, interest rates lowered and loans extended. Counseling Services will require a 'donation' or payment to cover costs and handling fees. You need to weigh these costs to determine if you would still come out ahead by paying a company to negotiate a better interest rate for you; a service that you may be able to do yourself.
Choose a reputable firm that will handle the consolidation in a way that preserves your credit scores. Prior to the consolidation, due dates should be changed to correspond with the counseling service's payment schedule, since many counseling services only send out checks twice a month, on the 1st and the 15th. If these dates do not harmonize with the due dates on the cards, they will show up as late payments on your report. In addition, it's important to realize that you need to proceed with caution with these companies because not all are reputable and many remain unregulated. Watch for the following signs that may mislead you into trusting a company you shouldn't:
understand the term "non-profit." It does not necessarily mean the company is legitimate or that you will get a better rate. The laws governing a 'non profit' organization are vague. Many companies qualify for this title by arranging finances to indicate that the company has not profited, while paying their employees large salaries.
To find out if a CCCS is legitimate, check with the National Foundation for Consumer Credit (NFCC) and the Better Business Bureau in your area. Be wary of companies claiming you can lower your monthly payments-this is a fallacy. As of March 25th 2004 the last two banks to accept lower payments discontinued this practice. Question companies that offer lower interest rates than their competitors. All creditors work off the same interest rate reductions and minimum percentage payments on balances so therefore it is highly unlikely to have this lowered.
Be familiar with the current interest rates on the cards you carry and ask that you choose which cards to consolidate. You already may carry balances with interest rates that are lower than the one they are offering you. If so, request that you be able to exclude those balances from consolidation.
You have to decide if there is a benefit to going to a Consumer Credit Counseling Service or if you can do their job just as effectively yourself. A consumer can often negotiate with creditors themselves for a better interest rate. One option is to shop around for a better interest on credit cards and to transfer the balances from the high cards over to the lower card. Contact your credit card company and tell them you have been offered a better rate at another company and if they plan on matching or beating that rate. If they do not rise to the challenge then transfer your balances to the new card. One option for transferring your balances is to take out a home equity line of credit.
Home Equity Line of Credit
A home equity line of credit is a loan taken out against the equity in your home, in other words your home is offered as collateral. These loans are usually offered at low interest rates. As with any credit, you should weigh the benefits and costs before deciding. Bare in mind that failure to repay the loan, with interest could result in the loss of your home.
The credit limit on the line is derived at by taking a percentage of the home's appraised value and subtracting the balance owing on the mortgage. The line of credit amount is also based on your income, credit history and additional debt load.
The home equity line of credit works on a variable interest rate, based on the prime rate. Lenders usually charge prime rate plus a 2 percent margin. By law, equity lines of credit must have a cap on how much the interest rate may increase over the life of the plan. Some also limit how low your interest rate may fall if there is a drop in rates.
Home equity plans may set a fixed period during which you can borrow money. At the end of this draw period you may have the option of renewal, or if no renewal option exists, then the plan may call for full payment at the end of the term.
As with any contract, you must read the terms and conditions carefully, as many plans have fees, charges and hidden costs. Some of the costs involved in establishing a home equity line of credit include property appraisal fees, application fees, closing costs and attorney fees. In addition to these costs, you may expect to pay transaction fees every time you draw on the line.
The benefit of opening a Home equity line of credit is that the minimum payments are low, often set at just the interest or interest plus a few percentage points. Be aware that with a variable interest rate, monthly payments may fluctuate. If you sell your home you will probably be required to pay off your loan immediately.
No matter which option you choose, the main goal should be to reduce those high interest rates while paying the lowest penalty for doing so. Weigh the pro's and con's of all options carefully and choose a road that best suites your financial situation.
Stay Informed
It is important to stay informed about your credit before you apply for any loan. An excellent way to begin taking control of your financial future is to obtaining a copy of your credit reports before you see a lender. Today you can get your free instant credit reports from the major 3 credit report agencies online. This way you can see exactly what the lender will see. When obtaining your credit reports, you will want to make sure you get your credit report scores as this is what lenders base most of their decision on. The higher your credit score the lower your interest rate will be and vice versa. So be a wise consumer, get you're a copy of your credit report and reduce your debt through lower interest loans.
About The Author
Melanie Cossey is a successful home based freelance writer. Meanie writes many informative articles on the topic of credit, such as What is a FICO score and why is it important? and Comprehending a Credit Report.
Typically, a credit card carrying a balance of $5000 dollars, with an interest rate of 17.5 % and a minimum monthly payment of $150 would take you 3 years and 10 months to pay off. The total interest accrued would amount to $1, 846. However, if you were to transfer your credit card debt to a lower interest rate loan of 7 %, that same $5000 paid in increments of $150 a month, would be paid off in 3 years, 2 months, substantially reducing the amount of interest to just $564. That's a savings of $1,282.
There are several options available for lowering your interest rates. Each one has its benefits and drawbacks. By educating yourself, you can choose the one that is best for you.
Consumer Credit Counseling Service
Consumer credit counseling services offers to consolidate your debts into one payment, negotiating with creditors on your behalf to have late fees waived, interest rates lowered and loans extended. Counseling Services will require a 'donation' or payment to cover costs and handling fees. You need to weigh these costs to determine if you would still come out ahead by paying a company to negotiate a better interest rate for you; a service that you may be able to do yourself.
Choose a reputable firm that will handle the consolidation in a way that preserves your credit scores. Prior to the consolidation, due dates should be changed to correspond with the counseling service's payment schedule, since many counseling services only send out checks twice a month, on the 1st and the 15th. If these dates do not harmonize with the due dates on the cards, they will show up as late payments on your report. In addition, it's important to realize that you need to proceed with caution with these companies because not all are reputable and many remain unregulated. Watch for the following signs that may mislead you into trusting a company you shouldn't:
understand the term "non-profit." It does not necessarily mean the company is legitimate or that you will get a better rate. The laws governing a 'non profit' organization are vague. Many companies qualify for this title by arranging finances to indicate that the company has not profited, while paying their employees large salaries.
To find out if a CCCS is legitimate, check with the National Foundation for Consumer Credit (NFCC) and the Better Business Bureau in your area. Be wary of companies claiming you can lower your monthly payments-this is a fallacy. As of March 25th 2004 the last two banks to accept lower payments discontinued this practice. Question companies that offer lower interest rates than their competitors. All creditors work off the same interest rate reductions and minimum percentage payments on balances so therefore it is highly unlikely to have this lowered.
Be familiar with the current interest rates on the cards you carry and ask that you choose which cards to consolidate. You already may carry balances with interest rates that are lower than the one they are offering you. If so, request that you be able to exclude those balances from consolidation.
You have to decide if there is a benefit to going to a Consumer Credit Counseling Service or if you can do their job just as effectively yourself. A consumer can often negotiate with creditors themselves for a better interest rate. One option is to shop around for a better interest on credit cards and to transfer the balances from the high cards over to the lower card. Contact your credit card company and tell them you have been offered a better rate at another company and if they plan on matching or beating that rate. If they do not rise to the challenge then transfer your balances to the new card. One option for transferring your balances is to take out a home equity line of credit.
Home Equity Line of Credit
A home equity line of credit is a loan taken out against the equity in your home, in other words your home is offered as collateral. These loans are usually offered at low interest rates. As with any credit, you should weigh the benefits and costs before deciding. Bare in mind that failure to repay the loan, with interest could result in the loss of your home.
The credit limit on the line is derived at by taking a percentage of the home's appraised value and subtracting the balance owing on the mortgage. The line of credit amount is also based on your income, credit history and additional debt load.
The home equity line of credit works on a variable interest rate, based on the prime rate. Lenders usually charge prime rate plus a 2 percent margin. By law, equity lines of credit must have a cap on how much the interest rate may increase over the life of the plan. Some also limit how low your interest rate may fall if there is a drop in rates.
Home equity plans may set a fixed period during which you can borrow money. At the end of this draw period you may have the option of renewal, or if no renewal option exists, then the plan may call for full payment at the end of the term.
As with any contract, you must read the terms and conditions carefully, as many plans have fees, charges and hidden costs. Some of the costs involved in establishing a home equity line of credit include property appraisal fees, application fees, closing costs and attorney fees. In addition to these costs, you may expect to pay transaction fees every time you draw on the line.
The benefit of opening a Home equity line of credit is that the minimum payments are low, often set at just the interest or interest plus a few percentage points. Be aware that with a variable interest rate, monthly payments may fluctuate. If you sell your home you will probably be required to pay off your loan immediately.
No matter which option you choose, the main goal should be to reduce those high interest rates while paying the lowest penalty for doing so. Weigh the pro's and con's of all options carefully and choose a road that best suites your financial situation.
Stay Informed
It is important to stay informed about your credit before you apply for any loan. An excellent way to begin taking control of your financial future is to obtaining a copy of your credit reports before you see a lender. Today you can get your free instant credit reports from the major 3 credit report agencies online. This way you can see exactly what the lender will see. When obtaining your credit reports, you will want to make sure you get your credit report scores as this is what lenders base most of their decision on. The higher your credit score the lower your interest rate will be and vice versa. So be a wise consumer, get you're a copy of your credit report and reduce your debt through lower interest loans.
About The Author
Melanie Cossey is a successful home based freelance writer. Meanie writes many informative articles on the topic of credit, such as What is a FICO score and why is it important? and Comprehending a Credit Report.
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