Consolidate Debt

A debt consolidation loan is taken to meet up the outstanding bills, develop the credit status. But it is better advised the counselors to delve much in to the process. To restrict debt consolidation, they have processes of how to consolidate debt. Aside from giving a solution to increase a credit line by taking up debt, they the advisors also provide the best solution to consolidate debt and manage a better future by decreasing their budget status. They provide financial counseling to consolidate debt.

It is advisable to lessen the habit of borrowing money and unsecured loans should not be turned into mortgage loans because in that one might loose the property. Debt consolidation loan in the long run might turn the situation into worse condition. It is also advisable not ignore any financial problem at the first stage. If the problem is taken care of at the initial stage then it might require less money.

People are also advised to handle the priority debts first. In case they are not tackled in first chance they might lead to worsening the situation. The payment of the debt consolidation loan should be paid first and not to be missed. Another way is to maximize the income procedure. If someone looses the job and the payments are still left then the payment should be covered by the payment protection insurance facility. For this one need to contact the credit company for further procedure. People can also save money by changing to better deals on services or businesses.

Here are some tips on how to consolidate debt:

When you decide to consolidate your debt, the obvious first question is “how?” – and that’s a question that isn’t easy to answer right off the bat. Sure, you can go to your bank and ask them to consolidate all of your debts. You could get a new credit card with a 0% interest rate on debt transfers. You could call a credit-counseling bureau, many of which were recently taken off ‘tax exempt’ status by the IRS, because rather than working to help you, they work to earn a huge profit off you… Every option has a downside, and there are more options besides. But let’s go through these three possibilities and break down the advantages and disadvantages.

1. GETA BANK CONSOLIDATION LOAN Banks love it when their customers decide to get smart with their debt burden, and they love it even more when they do so with that bank. When you transfer $10,000 of credit card debt (at 19% interest), a car loan (at 15% interest), and a retail charge account (at 18% interest) into a single bank loan at 9% interest, both you and the banks win. The downside of this is that banks can be tougher to get credit from than other lending institutions, and that means if you’re in real debt trouble, they might not view you as a good bet.

2. CREDIT CARD WITH 0% ON DEBT TRASFERS Some credit card companies send out special offers to try to entice you to bring your business to them. For example, one is the offer where they’ll give you a new credit card with a sweetheart rate, and any debt you transfer from an existing credit card, they’ll let you pay zero percent interest on. That’s not a bad deal, but the devils in the details – after a certain amount of time, your account reverts to above-standard interest rates, sometimes as high as 29%. In this instance, using a credit card to consolidate debt may actually see you with more debt burden in six months time.

From the Sun of London:

As any part-time economist knows, what goes IN to festive cheer must come OUT from somewhere else – namely your bank account, overdraft, credit cards of loans.

Paying high APR on credit cards and racking up the bank charges on unauthorised overdrafts can be a costly and stressful business.

It may be better to look to consolidate your debt in the form of one, easy-to-manage loan - and it could save you a packet in the process.

Sun Money has teamed with MoneyExpert to provide a debt consolidation calculator where you can jot down all your money worries and potentially cut the total amount of repayments.

You can also speak to one of Money Experts advisers to find out how you can bring down your monthly repayments.

Need to know more about personal and secure loans?

Here's our simple guide.

Personal Loans

Personal loans can be a useful way of getting your hands on a large sum to consolidate your debt.

You generally won't be able to borrow as much as with a secured loan, but you won't risk losing any major assets if you default on payments.

Most providers are flexible with the amount that they'll offer and it can range from £500 to £25,000.

The flexibility of these loans doesn't stop with the size.

You'll be able to arrange to pay it back over several years, or a few months depending on what works best for you.

But make sure you factor in early redemption charges.

Neil Faulkner writes:

The best unsecured personal loans are offered to those with excellent credit records only. So anyone with a tarnished history must consider making 'tactical applications'.

I mentioned this idea once before, in an article with seven tips in it. Unaccountably, I called it Six Great Tips For Getting A Personal Loan. As I'm a personal finance writer who appears to be unable to count, I guess it's lucky that this idea is quite simple.

It's been just four months since I first suggested this, yet in that short time it has become even more relevant. It's got significantly harder to take out a loan. Being realistic, most borrowers won't get the best interest rates, which are currently around 6.5% APR to 7% APR. So people who have missed payments, had a CCJ, or have borrowed too much or too little*, will have to set their sights a bit lower to increase their chances of a successful application.

What you shouldn't do in this situation is simply try your luck on the cheapest loan first. The odds of you getting it are very low to non-existent, and it'll cause problems. Firstly, you'll feel disheartened. Secondly, you'll be miffed. Thirdly, you'll have delayed getting a loan. Fourthly, and most importantly, it'll add a mark to your credit record; the more applications you make for loans and credit cards, the worse your record looks.

Asheesh Mani writes:

There are many frauds run by con artists, who do not deliver their promises. These fraudulent companies make tall promises, no matter how high your debts are. They claim to reduce your debt by 30 to 50 %. They use attractive advertising and play on people’s psychology. If you fall for their pitch and invest hundreds of dollars, you are in a worse financial shape. Although rare, there are legitimate non profit debt relief companies. Always check on the company with a reliable institution to understand its authenticity. With a legitimate credit counselor, they sit down with you; give you a free and objective assessment of your financial situation. Shop around. Compare a couple of credit card debt consolidation services and get a feel of how they operate. They should spend good time with you to get a complete picture of your finances. Always check the names with Bureau or local consumer protection office.

Hilary Bowman writes:

Everybody knows that homeowner loans have become increasingly popular as the benefits from secured homeowner loans extended to unsecured homeowner loans. However, not everybody knows the many uses that homeowner loans have and how other loan types can be enhanced when they are specially tailored for homeowners. Understanding how homeowner loans work will give you an idea of what to expect from the different loan types and their uses.

It is a known fact that a home owner can easily and quickly get his loan application approved when offering an asset as collateral for the loan. It is also known that even when the property is not used as collateral for the loan, a home owner has more chances of getting approved for an unsecured loan than a tenant or non homeowner because there are other legal ways of recovering the lenders investment if the borrower has assets that can be sold.

The benefits obtained by this risk reduction are lower interest rates, affordable repayment terms, grace periods (payment holidays) and pre-payment or cancellation of the loan without penalties. This is due to the fact that lenders want to attract these customers as they represent a low risk niche that provides a lot of benefits in terms of returns for them. Therefore, homeowners can get for secured and unsecured loans, more advantageous loan conditions.