Credit counseling: A ray of hope in a dismal debt scenario

Pancakes with a side of credit counseling
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Debts can cause you to lose sleep, have relationship problems and even major health related problems. In case you are suffering from rising debts, then do not worry and try to consider ways in which you can address this problem. One of the foremost ways that you should consider is credit counseling. It is a debt solution that educates you to take care of your finances better in such a way that you can get rid of your debts too and live a financially healthy life. Continue reading →

Debt Consolidation Loans- Part Of Credit Repair?

Overspending is a mistake that a lot of people make. This is because they think that as long as it is approved for credit they can continue to do so until it maxes out. This never ends well because they don’t have the funds to pay for what they purchased which is why debt consolidation loans are part of credit repair.

If you think this problem is only in the US, think again because the same situation happens in other part of the world.

Credit card consolidation is very simple. You combine all the debts you owe from various creditors so you end up paying only one loan monthly.

There are many benefits for credit card consolidation.

First, you get to pay off your debt at lower interest rates than those that are already prevailing in the market.

Doing so will re-age your account. This means that your account is current and active as long as you keep making the payments that you agreed on.

While most card companies charge you fees for being late on your payments, the credit card debt consolidation program waives that so what you will only be paying what you actually owe.

Lastly, the debt consolidation plan buys you time so you have the choice whether to finish paying in a matter of weeks or months.

When you are able to consolidate your credit card debt, the next step is to come up with the money to pay it off. You can try reducing your expenses, asking for a raise, getting a second job or selling some valuables.

So do you need to apply for credit card consolidation by going to a bank? You can course this through a bank but there are private and non-profit organizations that offer similar services. You just have to find the right one to work with and then cooperate with them.

When you are looking for an organization to work with, make sure they are legitimate because some of these are scams. This isn’t good and you surely don’t want to fall for that because you are just wasting your time and money.

Once you notice that the money you owe is getting smaller, you are already on the right track and it won’t be long before you have finally been able to do some credit repair.

There are a few things you can also do to improve your credit score. You can open a new line of credit and if the major credit card companies will most likely deny your application, get a credit card offered by supermarkets or groceries and those offered by banks.

Don’t forget to pay your bills and other expenses on time because all that hard work you have done will go to waste if you miss a payment.

The amount of money you owe to creditors took months to grow so don’t be surprised if it takes awhile before you are finally debt free. Remember, keep looking forward and don’t blame yourself for past mistakes. Move forward by taking the necessary steps.

Debt consolidation loans are just a part of credit repair because it helps make your payments more manageable.

Once it is in place, honor your commitment because that is the only way that your credit score is going to improve and you will once again have good standing with your creditors.

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Best Way to Get Out of Debt?

How To Get Out Of Debt

In the current recession, how to get out of debt is a question that is affecting more and more people. It is very easy to get into debt when you go through a bad patch financially. You may have lost your job, had a long time off sick or lost a part of your income such as overtime payments. You let the credit cards mount up or take out a loan thinking that things will quickly be back to normal and you can pay everything off.

But often, it does not turn out to be so easy. Maybe you cannot find another job, or your company cuts back on your hours permanently. Even if the situation is resolved and your income goes up again, the debt is usually not so easy to pay off as you expected.

The best way to get out of debt is just to keep making those monthly payments on time. Do not worry that it is going to take you a long time. Just budget for it, do it and think of it as a necessary expense like the mortgage or the rent. That money is not available for spending.

However, if this is not working for you, there are several things you can do.

Debt Consolidation

This is a way of paying out a lot of small loans or credit card debts with one large loan. It can work out cheaper per month, especially if your debts are mainly on high interest store accounts or credit cards. It can also be very good for people who have problems managing money and keeping track of all their debts.

To be successful with debt consolidation, you need to include absolutely everything, and do not run up any more credit card balances after. In fact, it would be best to cut up those credit cards and store cards until the consolidation loan is paid right off.

The danger with debt consolidation is that you may take out the big loan, pay the others off, but then start accumulating more debts while you still have the big loan to pay. This can leave you in a very bad situation. Do not let this happen to you.

Renegotiate Your Loans

Most loans (including credit card debts) can be renegotiated to give you longer to pay. This will mean smaller monthly payments, or possibly a ‘payment holiday’ if you simply cannot make your payment this month.

Negotiating with your bank or credit card company is not as scary as it sounds. Work out a proposal of payments that you could make before you call, then explain your situation truthfully and tell them what you suggest.

Bankruptcy

This is a last resort process where, briefly, you have a court declare that you cannot pay your debts and will not be able to do so in the foreseeable future. You give up all you have and your creditors have to accept whatever they are awarded. Bankruptcy can be voluntary (where you initiate it) or forced (where you have court judgments against you that you simply cannot pay). Always talk to a good Bankruptcy attorney before taking this step.

In terms of how to get out of debt, it is not the best way, but something that some people have to resort to.

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