Debt consolidation is the procedure of combining multiple high-interest unsecured debts into one low-interest debt, which you can pay off with only one monthly payment. The amount of this payment is figured out after a thorough evaluation of your budget. For many people who are struggling to keep up with their monthly financial obligations, debt consolidation works as a truly helpful debt relief solution. It also offers a number of advantages to the consumers and is a good substitute to bankruptcy.
Falling into debt is easy but becoming debt free isn’t. You can only achieve financial independence if you follow a bill consolidation program seriously. Some of the most common benefits offered by consolidation are given below:
1) Interest rate reduction
A consolidation company carries out negotiations with your creditors on your behalf to reduce the interest rates. This leads to reduction of your monthly payments and this helps you save some money.
2) One affordable monthly payment
When you enroll in a consolidation program, handling your payments becomes easier than before. Rather than making multiple payments to various creditors, you only need to handle one monthly payment. This helps you keep tabs on your expenses and devise a sensible budget. You don’t have to be concerned about missing payments any more.
3) No harassment from your creditors
When you sign up for a consolidation program, you don’t haveto deal with your creditors directly and this saves you from creditor harassment. This helps reduce your stress level and attain peace of mind.
4) Your late fees and over limit fees are waived
With expert negotiations, the consolidator can convince the creditors to eliminate your late fees and over limit fees so that the repayment becomes convenient for you.
5) Credit counseling for free
Many consolidation companies provide credit counseling services to educate the consumers so that they don’t fall into debt again and again. These counseling sessions are available without cost. Your financial situation would be analyzed by a skilled debt counselor and suitable options would be recommended to you. You would also come to know whether consolidation is the right choice for you. The concept is to help you become debt free with the solution that’s right for your needs.
6) Improvement of your credit score
When all your dues are repaid with consolidated payments, this reflects positively on your credit report and your credit score is enhanced.
Consolidation comes with a slew of advantages. However, you can derive maximum benefit from it if you’re sincere in making your consolidated payments and trying to spend less than you make each month.
Looking to get relief from your debt problems? people tend to feel that the only solution is to go about getting credit counseling or to even file for bankruptcy. Lot of these people do not know about debt consolidation. The goal of debt consolidation is to allow you to meet the requirements and needs of your creditors for less than what they say that you owe them also to also save you a lot of money.
Lot of people choose debt consolidation because their amount of debt are highly out weighing what they are capable of managing in order to back the full amounts to avoid having to file for bankruptcy. Another reason as to why a lot of people choose to go about a debt consolidation company is simple because they are way too fed up with the credit card companies because they are constantly increasing the interest rates . Mainly one reason as to why people choose to utilize a debt consolidation company is to relieve the burden of being in debt. The burden of debt becomes such an overwhelming thing that their biggest goal is to become debt free. This is why the debt consolidation process is something that is gone after when trying to accomplish the goals of getting out of debt and staying out of debt.
It is important to eliminate your debt before trying to improve your credit score. Your credit profile is a good indication of your history in terms of payments and late payments and such but it is one hundred percent possible to improve your score over a period of time .
Banking and financial institutions would love to keep you locked into the state of mind that your credit score is the absolutely most important thing in your life. Do not get suckered into feeling this way because it's their way of fearing you into doing things their way. It is by all means an important part of your life but in no way should you allow it to dominate your life and make it so that it is the only thing that you care about. These financial institutions do not really care about you; all they care about is making more money. Why else would they raise your credit limit on your credit cards in order for you to charge more things to it? It is because they know that you are likely to fall into some sort of debt like most Americans and as a result they will make more money off of you and your debt.
When you are looking about the different options and as debt consolidation comes to pass you realize that it is your choice to become debt free. There are typically two different types of companies that can help you in becoming debt free over time. The first one is the type of Debt consolidation Company that you see advertised everywhere that happen to not be lawyer based. The others are law firms that happen to have a debt consolidation service as one of the things that they offer to people.
When you are searching for a debt consolidation company there are some important things that you really do need to consider before choosing the right one that will help you become debt free
The first thing that I would like to point out is that any of these companies should be able to save you at least half of your debt including the fees that you have to pay and the paying of your creditors. While on your own you can typically save around half of that without too much effort on your behalf, getting any more relief than that will require a fair degree of experience that you do not have. One thing you need to be aware of when attempting to speak to someone from any debt consolidation company is that you should always do your homework first. There are some companies out there that just want to make as much cash as they can off of their clients without any true regard for their own problems. These people say just about anything that you want to hear in order to get you signed up with their programs.
When you are looking about the different options and as debt consolidation comes to pass you realize that it is your choice to become debt free.
There are typically two different types of companies that can help you in becoming debt free over time. The first one is the type of Debt consolidation Company that you see advertised everywhere that happen to not be lawyer based. The other is law firms that happen to have a debt consolidation service as one of the things that they offer to people.
A lot of people get into the mind set that there is a magic way to fix any of their problems quickly. These bad companies understand this need and typically are very good at catering to that and as a result sign up thousands of people on a yearly basis. Be careful of what they tell you because at first it may sound like a great deal but they do not usually include how much it will cost you in the long run. The first thing that you need to ask them is if their claim of savings includes their companies’ fees or not.
You should also make certain that you have a realistic time frame for paying back your debt. There is a huge benefit in going with a debt consolidation company in that you can become debt free in a short period of time instead of paying the minimum payments to your creditors which with interest takes quite a long period of time to finish up. You should most definitely pick a debt consolidation company that is going to focus on getting you debt free in two or less years only. This is because by stretching your payment plan further than three years time you will never get the full benefits that you are seeking out due to increasing interest piling on. The longer the program is that you sign up for the more debt you will end up having to pay out of as a result of it.
You should also make certain that the collection calls will be stopped from being made. One of the bad aspects of these debt consolidation companies is that in order for your creditors to be willing to let you pay less you are going to have to fall behind on your payments to them. As a result of this you will end up getting several calls from collection agencies. This can be very annoying and just straight up aggravating. So when it comes to getting these calls stopped the only way that you can legally get them to is by having a lawyer from the debt consolidation company to represent you.
As a result of this they must contact your lawyer or they will be faced with a law suit otherwise. If you are told from your debt consolidation company that you can have these calls stopped to make certain that they have a lawyer to aid you in this. By law a collection agency does not have to deal with the debt consolidation company unless they provide you with an attorney. If they tell you to just send a cease and desist letter to the collection agency, be careful, because you will leave them with no option but to serve you with papers to appear in court and as a result could end up being sued.
You need to make certain that the company you go with is a reputable one. To start with you should check out the better business bureau to see if they have any negative comments regarding their business practices. After this you should consider how long they have actually been in business as a general rule of thumb is that a company that has been in business for over ten years in good standing should give you some sense of peace in knowing that they know what they are doing and have helped a lot of people in the years past.
If the company you go with is only a year or two old be wary of this because there are lots of fly by night operations that sign up lots of people knowing that they are not going to be able to help them just to get the collection fees and when that is over and done with they close up shop and start a new company. If you end up going with a law firm you should obviously make sure that they are registered with the state bar association. If you have a problem and complain, they could lose their license, so it is in their best interest to help you if you go with them and do the best job that they can do for their clients.
The warning signs are pretty obvious because if a company has a poor record with the better business bureau it would be best to stay away. If the company is fairly new be sure to do your homework before going about getting their services as it would be in your best interests.
Even though debt consolidation is a very smart way to go about getting out of debt just like anything you need to be careful with the place that you go with. If you read this guide carefully you will have a leg up and know how on how to choose the best possible company that can help you and your situation. You too can soon be out of debt completely and have a huge weight lifted off of your chest.
Over the years, debt settlement has increased in popularity because more Americans are seeing it as a viable option in terms of getting out of debt and getting back on their feet financially. If you would like to have a percentage of your debt (which can be up to 60%) eliminated, you should consider debt settlement. Creditors are being more generous than ever due to the large number of Americans with outstanding debt and you as the consumer should capitalize. Debt settlement services are provided by a professional settlement company. You gain access to their full services once you become a client. However, some companies will provide free consultations via email or over-the-phone. These consultations are used to determine if you are an ideal candidate for debt settlement. If you are, what happens next will all depend on the company in question. If you do not have cash to make a one lump sum settlement then your debt settlement company will likely setup an account for you in the form of a trust. Each month you pay your settlement company money and that money should be deposited into your account. During this time, they will be negotiating with your credit card companies to get your total amount owed reduced. Your partnership will end once you have enough money in your account to pay the agreed upon settled amount. When this happens, you are now debt-free. In short, you can see that the process of getting a percentage of your unsecured debt legally erased is easy when seeking professional help although you must know where to find a legitimate and proven debt settlement company. Debt settlement services are attractive for Americans in over $10,000 in unsecured debt because the fees you pay the debt settlement company will almost always be less than the amount of debt which you are able to eliminate. If you are ready to get started, visit the online website of a debt relief network and get the contact information for some of the best professional settlement companies in the industry. LegitimateDebtSettlement.com has established itself as one of the largest and most respected debt relief networks on the market place today.
Credit Cards(CC) is really useful as you can buy things on credit. Book a flight ticket without moving an inch out of your house ,buy your favorite items even if you don’t have the much needed cash just buy what ever you with your CC. Isn’t that great!!. But if you don’t know how to manage your CCs properly you might fall into trouble called CC debts. General advice to avoid CC debt
Always try to pay more than your minimum dues: You actually build up recurring and extra interest on your CC when you make only the min payments. It actually shoots up the net cost of your CCs considerably. Therefore, always make an extra payment towards your CC debts whenever you can. Follow this golden rule religiously just pay before the due date: Don’t make a habit of paying CC bills on the due date. You’ll be charged late fees if you somehow miss the due date of your CC payments. Therefore, it is always recommended to make the required payments on time .Good old cash! Try to purchase items with cash: You can avert accumulating CC debt if you make a habit of purchasing stuff with cash. Use CCs only during emergency time when you really cannot do without it. Make a smart budget plan and allot fixed amounts to each category so that you don’t require to use your CC unless it’s an urgency, such as, paying those emergency medical bills.Never use multiple CCs: never use too many if possible, cancel some of your CCs. It will help you to manage and remember the due dates of your payments if you have few manageable number of CCs. Also always create an emergency fund so that you don’t have to swipe your CCs every time. It will help you to prevent cumulatively accumulating CC debt. It is recommended that you keep an emergency fund worth 3-6 months of your living expenses. Also, make sure you don’t use the amount to buy stuff. Instead, use the money to repair a damaged item or pay an emergency medical bill whenever required.
Having trouble paying your bills? Constantly being troubled by creditors at home ? Have no fear finance-guru is here.Everyone ,believe it or not, at one time or another has to endure a financial crisis. Overspending, illness, or job problems are the three main reasons.
It can be overwhealmning to pull through in such times but hey remember that it is not a permanent situation. You need to be informed about a solid way to deal with your financial problems. Geting the perfect solution for you will include the examination of many things like the seriousness of your debt and your future financial goals.
Get a budget – Plan a budget that takes your earnings into consideration. It’s absolutely necessary that you take your financial status for what it is, and develop and fix your budget accordingly so that you aren’t stuck with a substantial amount of debt. Divide your monthly expenses primarily into 2 categories – 1>fixed and 2>variable expenses.
Fixed expenses = rent or mortgage payments, car payments, etc.
Variable payments = clothing, entertainment, etc.
List everything and prioritize your expenditures. See just how much money you need to carry about your life with only the necessities.
Balancing your check book smartly and creating right savings plans are 2 great ways to establish and maintain a budget.
Talk to your creditors –Well before you amass a huge amount of debt. Make it clear to your creditors that you are facing trouble making payments. They may offer you a modified payment plan which may reduces your stress and monthly payments. Lenders can seize your property(foreclosure) if you fail to make payments in time so be careful.
Get Debt consolidation help or expert consultancy – Consolidate your bills so they can all be repaid in one payment on a monthly basis. Try as best as you can to avoid bankruptcy or foreclosure.
Being a financial advisor, I come across a lot of people with a variety of financial issues. I met many people who got into deep debt in the recession period. Most of them were able to get out of debt after some time. But there were few people, who not only got out of debt, but also remain out of it as well as earned millions during recession period.
Most of my clients come to me with same issues of getting out of debt and most of the time I give them a simple suggestion but at the same time tough to follow. When we talk about finance, you’ll find two types of people with two types of spending habits. First one are those people who not only earn their income but also borrow money from market or banks and spend both which gets them into heavy debt. And the other category is of those people who not only save money from their income but also earn and save money that comes from different investment which not only help them to stay out of debt but also make them wealthier than others.
So my simple and at the same time tough suggestion to follow is to stop spending money beyond your means. Try to get out of debt as soon as possible for you. In case you are too much heavy debt, then find an extra source of income and be sure that this income is not coming from any type of investment. When you are out of debt, first thing try to remain out of it and also save money which you were saving earlier for your debt payments. Then after some savings from your income, invest your money for a higher rate of return.
Few days back, I read an article in a newspaper where a Teacher didn’t spent his money beyond his means and invested most of his savings. In this way, he was able to accumulate $900 million in his account. So there is nothing impossible in this world. Even anyone of you can create this magic. So if you want to be millionaire, start saving now.
In my previous post, I told you the common mistakes done by people when they are in debt or when they are dealing with debt consolidation companies. Now I am giving you 10 suggestions that would help you not only to get out of debt quickly but also help you to stay out of debt.
First of all reduce your expenses and transfer the balance from credit cards with higher APR to credit cards with lower APR. In this way your debt will not rise when you are trying to get out of it.
Make a budget and remain stick to it. Calculate the amount you need to spend on necessary things in a month and always remain in that limit. It is easy to spend money when you have not made any budget.
Try to pay more than required to get out of debt as quickly as possible.
Always try to reuse things in order to save money. It will not help you financially but is also good for the environment.
Always pay your monthly bills on time and avoid paying late fees.
Try to change your spending attitude. Buy only those which are required and try to avoid buying those things which may get you into more debt.
Try to be with people and friends who help you to get out of debt with their suggestions and can understand your goals.
Try to shop not for clothes and accessories but for best account, best credit, best loans etc.
I know that when you are in debt, your first priority is to get out of debt. But try to save money for some really true emergency which you can’t ignore.
Never use your credit card when you are in debt. This will not only help you to get out of debt quickly but also help you to avoid buying things which you can’t afford at the moment.
The most common mistake that people do with their finance is that they get into debt. But they should not do any error when they are trying to get out of debt. Following are some common mistakes done by people when they are trying to get out of debt with the help of debt consolidation companies. I am giving you these mistakes so that you don’t repeat them:
Most of the people never check their credit report before applying for any debt consolidation loan or before going to any debt consolidation company. So if they’ll not check their credit report, they’ll end up with a debt consolidation loan of higher APR than on their current debts.
Most of the people never search for a right debt consolidation company and choose whatever they see first. Thus they end up choosing a wrong debt consolidation company which take only advantage of their situation and sometimes get them into more debt.
When dealing with a debt consolidation company, generally people try to know only about interests and monthly payments but never calculate the total fees.
When signing on agreement with the debt consolidation company, mot of the people never read terms and conditions related with the agreement and at the end they blame to debt consolidation companies for their financial condition.
After the agreement with the debt consolidation company, some people leave all the calculations on debt counselors and end up with a dispute with debt Consolidation Company regarding payments.
I know that this title would look funny to some people because they think that how budgeting can give us chance to enjoy our life. Most of you think that budgeting means cut off your extra expenses and live your life in limited amount of money. But believe me, budgeting will not only keep you out of debt but also give you more confidence to spend money when you go for shopping and instantly decide to buy something big. It is all about an effective planning.
To start making budget for yourself, first find out your exact monthly income. If you get money every month by other sources also then add that amount too. An effective should also involve your personal debt like credit card bills, any type of loans etc. Plan a certain amount of money in your budget that you should pay to every month to reduce debts. If the month ends with a negative number in your budget plan that means you spent money more than your income and that means you are in loss. But if you are able to end the month with a positive number in the budget plan, then that means you saved money and you are in profit. Your main aim in budget should be to reduce the negative number always and work more on increasing the positive number.
You should also add a saving amount also in your budget. That means you should plan to save a certain amount always at the end of month.On above of this saving amount, whatever money left at the end of month after all expenditure is an extra saving for you. Always work on saving more at the end of each month. These savings can be used in emergency cases or any unplanned shopping. At time of such events, you’ll not hesitate to spend the money because you already know that you are using your savings.
You should not follow a same budget always. Plan a budget every month according to the change in financial situations like increase/decrease in price of any product or if you get a promotion in terms of salary or get better salary job.
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