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Please Help Me I Need To Consolidate My
Debt!
Sometimes it appears that no matter how well
you plan, at times you can find yourself the victim of
unfortunate financial circumstances. Whether it be the economy
or some other financial hardship, at some point you may have
to look for a way to ease your monthly payment burden.
This may lead you to wonder: should I
consolidate my debt? And if I decide to consolidate my
debt, how can I do so in a way that is safe, affordable,
and will be beneficial to me in the long run? While the
financial landscape may appear to be downright
scary at first, the answers to your debt consolidation
questions and concerns can be fairly straightforward.
"When someone comes to me and says 'I need help
to consolidate my debt' I first ask them to fill out a
financial profile that lists all of their monthly payments, the
balances they owe, and the interest rates they're paying on
each loan or credit card," says financial advisor and business
writer Carl Walins. "Then when they've got all the information
laid out on paper, we can begin to prioritize their debt. We
look for opportunities to quickly pay off small loans with high
interest rates and to consolidate larger loans or cards into a
single credit card or loan that offers a lower rate".
For example, Walins says when you ask yourself
"should I consolidate my debt?" the first thing you should look
at is your credit cards, since these traditionally carry the
highest annual percentage rates. You should first
determine whether or not you have the opportunity to reduce
your APR by combining the balances of several higher-rate cards
onto a single, lower-rate card.
If you have three credit cards with a balance
of $1,000 and rates of 19.5 percent, 22 percent
and 24 percent, you might consider transferring those
balances to a single card that has an interest rate of 16
percent. Clearly you will save a significant amount of money in
annual interest payments by moving to the lower-rate card --
provided that the 16 percent rate isn't a short-term "special"
that will expire and shoot up to a much higher rate before you
pay off the balances.
Walins also advises that you may want
to consider a debt consolidation loan in order to pay off
higher-interest debt. He says that sometimes lenders may offer
you a much lower rate based on your credit history, and if so
you may consider taking one loan to pay off several other
outstanding amounts that bear a higher interest rate.
Using the credit card examples above, you may
find that you can get a $3,000 unsecured personal loan at a
rate of 11.5%. Securing that loan would allow you to payoff the
higher-interest credit cards and reduce your monthly payment
burden.
But Walins warns about one of the pitfalls of
debt consolidation. "When someone comes to me and says 'please
help me consolidate my debt' and we are able to pay off those
high-interest cards, I tell them to cut up all but one of those
cards and to save it for emergency use only. Those credit cards
with zero balances can be a temptation that you just don't
want to fall victim to".
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Important Tips On Credit Card Consolidation
Some tips on credit card consolidation
are common sense. One tip that should go without saying is
to never make a new agreement that you can’t pay. It does
no good to consolidate your credit cards for a lower monthly
payment if you still can't make the payment. Here are some
other important tips on credit card consolidation to help you
make your decisions.
TIP 1: Make sure the debt consolidation company
or credit counseling company you’re working with is reputable.
These companies are a dime a dozen all over the Internet. You
can also find dozens of different such companies advertised on
the television and radio.
Just because you see the ad at a popular and
reputable website, or see the ad on the television, doesn’t
mean the company is a good one! Even rip-off companies need to
advertise to draw in customers. Try to talk to someone who has
used the company. Investigate them online and with the Better
Business Bureau.
TIP 2: If you’re using credit counseling or a
debt consolidation company, really look at the terms of the
agreement. This is one of the tips on credit card consolidation
that can’t be stressed enough. Do the math yourself.
Even if the company is a good one, you
shouldn’t just take what they’re saying as gospel. Crunch the
numbers and figure out just how much you’re saving. Sometimes
what you find can be surprising.
You may be about to sign an agreement that
eases your burden today, but increases it tomorrow! If you’re
getting a lower monthly payment, make sure that your interest
rate is lower also. Otherwise your debt will accumulate at the
same rate as before while you’re paying less.
This might seem like an acceptable solution if
your payments are out of control. But it will keep you in debt
longer and making payments longer. If you’re having trouble
with your debt now, think about how you’ll be adding to it in
the future. How likely is it that making bigger payments in the
future to pay off more debt won’t be a problem?
Most good companies avoid this situation, but
you should always make sure you’re not getting in deeper just
in care.
TIP 3: This is one of the tips on credit card
consolidation for the do-it-yourselfer. You didn’t
contact a service but instead decided to consolidate your
cards yourself. Read the new card agreement carefully. If
you think you might be forced to make a late payment even
once, reconsider.
Doing so can send your interest rate
skyrocketing and you could end up in deeper debt than
before.
TIP 4: Once you’ve consolidated your credit
cards, stop using the ones that have a zero balance. Use cash
only and do your very best not to add any new credit debt. If
you don’t do this, you’ll end up with the consolidation to pay
plus new debts on other cards.
Stop using credit cards is one of the best tips on credit card
consolidation you can get.
How to Find a Bad Credit Mortgage
Loan
When dealing with mortgages, you might think that having
good credit is the only way that it will work. Most often this
is the case, because many times there are restrictions on what
type of credit you need and what you can do with bad
credit.
Usually, finding bad credit mortgage loans is almost
impossible because lenders do not like to give out mortgage
loans to people who have bad credit. Therefore, before you
start looking for bad credit mortgage loans there are several
things that you can do to make sure that you are getting the
best deal for
yourself.
One of the first things that you should do when you are looking
for bad credit mortgage loans is to review your own financial
situation and your own credit to make sure that you know
exactly where you stand financially. The best way to find
out about your own finances is to ask for a copy of your own
credit report. You need to check your credit report very
carefully. Make sure that there are no mistakes on that
report, and that everything listed there is the truth. That
way, when you apply for a bad credit mortgage loan, you can be
sure that you are dealing with the exact credit that you think
you should be dealing with.
One other benefit of looking at your own credit report
before you apply for a bad credit mortgage loan, is that
you will be able to tell which one you want to apply for. There
are many different types of bad credit mortgage loans and they
will depend on your level of bad credit. Yours might not be as
bad as you think, so looking at your own credit report is often
a good way to make sure that you are applying for the right
level of bad credit mortgage loans. Obviously, you don't want
to apply for loans that you shouldn't be applying for.
After you know what your credit looks like you will be
better able to choose which ones you want to apply for. When it
comes right down to it, you want to talk to your lenders to
make sure that you are getting the best deal. Yes, the best way
to find bad credit mortgage loans is to simply talk to various
banks and see what they will be offering you.
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