3 Helpful ways for consolidating credit card debt

Consolidating credit card debt is a useful technique to lower the amount that you spend towards paying down your credit card bills and simplify your finances. There are various methods of consolidating credit card debt. You can go for a 0% APR balance transfer or take out a secured or unsecured loan. There are other options like a debt management plan (DMP) or a debt settlement program.

1) Credit card debt consolidation with a secured loan

You can take out a secured loan to pay off your credit card bills by putting your home as collateral. You might be eligible for such a loan in spite of poor credit. The advantage of a secured loan is that it offers you one low-interest monthly payment. However, you should remember that you have the risk of losing your home in the event of a default. You shouldn't also stretch out the repayment term since this would raise the overall interest costs throughout the term of the loan.

2) Credit card consolidation with an unsecured loan

You can also take out an unsecured loan to pay off all the balances on your cards. The advantage here is that you don't have to provide any collateral. However, you should have excellent credit to obtain such a loan and the interest rate on these loans is usually higher than the secured loans. You can consolidate up to $25,000 through an unsecured loan. If this is not adequate, you can go for a settlement program or secured loan.

3) 0% APR balance transfer

A 0% APR balance transfer card is similar to a consolidation loan but the only difference is that there is no borrowing cost. If you can shift and pay off all your balances through one such card within the 0% introductory period (usually 12 months), then you can really save a lot of money on interest payments. However, there is a balance transfer fee that might range between 3% and 5%. A good credit score is necessary.

Some important points to remember

You can use a loan to consolidate your bills. However, you should try to lower your spending and stop acquiring new debt while you're undergoing the consolidation procedure. If achieving financial freedom is your priority, then it's essential that you become disciplined.

Making a decision to consolidate your bills can certainly lower the amount of your discretionary income that you use to pay down revolving credit. Though consolidation carries a lot of advantages, you shouldn't start recklessly charging on your cards once more since it would make your situation worse than before. Always think cautiously before going for a secured loan. If you don't want to lose your home, then a DMP or other kind of debt relief program might be more suitable for you.

Ways to Save Money and Become Smart Shopper

In present era money is the most sought out item. It needs careful handling otherwise one might be in deep financial crisis. Money is an asset that can give you financial stability and help you in times of emergencies. Proper handling of money is required in order to live a peaceful and hassle free life.

You should remember that, spending your money wisely is an important part of managing your finances. For effective money management you need to compare the prices, find the best products and learn about consumer rights. This practice will help you to stay away from debts.

Sales is an honorable profession but this can be sometimes manipulative and misleading. Therefore you need to become a smart shopper. You need to be smart consumer so that you stay away from debt. Not only sales person but any advertiser, promoter or any professional might want to sale something to you which you might really not need.

You tend to spend money when someone sells something to you directly or indirectly. Sometimes in this process you may waste your money if you are not careful. Very often you get tempted to buy the latest consumer goods without being aware of your affordability. That might lead to severe debt problems since you are unable to pay back your debts. Wrong calculations and extravagance spending may lead you towards debt problems.

Once you are in debt you will need the help of experts to come out of it. The process to free you from debts is known as debt consolidation. Debt consolidation not helps you to become debt free but also guides you to restore your financial condition.

Is Taking a Debt Consolidation Loan A Wise Decision?

Debt consolidation loan is important for home owners as it helps to give the best financial deal when you are looking for home loans. If you look for right kind of home loans then you can save thousands of dollars.
What are the different types of home loan available from lenders

• Thrift Institutions
• Mortgage Companies
• Commercial Banks
• Credit Unions

The price quotes differ from lender to lender, therefore in order to get best price you should negotiate with different lenders. You can also arrange for home loans through a mortgage broker. A broker gives you the opportunity to select various loans and repayment structures. You can also contact other lenders to know about the different terms and conditions so that you can choose the best option.

A broker may contact several lenders for your secured loan application but he may not find the best deal unless he has a contract with you to act as your agent. Therefore you should contact more than one broker or may approach few banks and thrift institutions.

There are financial firms that operate both as lenders and brokers. Always try to enquire whether the broker acts as a lender. This is important because brokers are paid certain fees which is different from lender's original fees or other fees. The brokers can help you to find a suitable home loan for the purpose of debt consolidation.

A home loan often involves several fees such as loan origination fees, underwriting,transaction fees,fees for the broker,settlement fees and closing costs. Every lender or broker should give you the estimate of the required fees before hand. Most of these are negotiable but some dollars are paid in advance when you apply for a loan( such as appraisal fees and application fees). While others are cleared at closing, you can also take loan to pay this amount but this will only increase the loan amount and the total costs.

You can also search for no costs loans but these generally have high rate of interests. You should also enquire about each fees in details. Several items may be taken indiscriminately into one fee. Try to know what each fees stands for.

Debt consolidation loan for home owners is not always a wise decision as taking loans when you are already debt struck is not at a wise decision. Instead go for free debt consolidation program and become debt free.

Debt Consolidation Helps to Remove Bad Credit

Today more and more people are becoming more dependent on debt consolidation due to the effective solutions it provides to a debt ridden person. To take a debt help a person should have clear understanding about his financial situation. He should be aware of the credit he owes to different creditors.

After verifying his credit bills if a person realizes that he cannot afford to pay the amount he owes then he needs to work out on a plan. But in case that credit amount is beyond his capability then he should immediately get in touch with a debt counselor and seek debt help. This enrolment does not cost a single penny to the debtors.

It is a free counseling session where the debt counselor makes aware of all possible options and lays a plan in front of him. It is now upon him to choose. If you have bad credit, do not lose hope. This is the time when debt consolidation comes to your aid. The first step is to apply for a free counseling session. The counselor will analyze your credit report and chalk out a debt consolidation plan for you. This will help you to repay loans with much ease. Then he will approach your creditors and negotiate your payments.

Generally the creditors try to reduce the total amount by 40% to 60% and sometimes even higher. On successful elimination of the debt, the debt counselor shall consolidate rest of the amount into smaller monthly installments.

Believe it or not, it does cost anything to the debtor. The reason is that if you apply for bankruptcy the creditors do not get anything. In return they need to spend some dollars in order to get back their money. Considering all these factors the creditors often allow a reduction in debt and also pay to the debt consolidation form for sorting out the issue.

Debt Management Plan or DMP

Most of the debt ridden people do not know that debt management lowers monthly payment without hurting your credit. When you are in trouble meeting your debt payments along with your daily expenses, a debt management plan comes to your rescue. With DMP, you can get rid of excess debts by paying them through an affordable plan. For this you need to understand about debt management plan.

What is debt management plan?

A debt management plan is offered by a debt relief firm or by a credit counseling agency when you need something more than a simple budgeting to pay off your debts. The debt management firm negotiates with your creditors on your behalf to help you to avail lower rate of interest. This helps you to lower your monthly rate of interest so that you can pay your bills on time.

What types of debts are included in DMP?

The types of debts included in DMP program are unsecured debts like medical bills, student loans, credit card bills, payday loans etc. However the payday loans and student loans may not be covered by certain plans.

When do you need a DMP?

* You should go for DMP under the following conditions
* You have to pay multiple bills and you fail to manage them efficiently.
* You have tried self repayment plan but it has not helped you in any way to overcome your debt problems.
* You are in financial crisis and you want to get out of debts.
* You want to stop getting collection calls.
* You want to lower the rate of interest for your bills.

Benefits of DMP:
The benefits of DMP are as follows
* The rate of interest and monthly payments are lowered.
* Late fees or over the limit fees are waived off.
* You stop getting harassing phone calls from your debtors.
* A single monthly payment is required instead of multiple bills.

To find the right debt management company you need to check the following details. These are company profile, service background and client testimonials. These are the things you should keep in mind while going for Debt Management Plan.

Know What Is Credit Repair Service

Credit repair service or bad credit repair service helps you to get rid of negative items from your credit report. It starts off with free counseling service wherein the credit counselor analysis your credit report. The credit counselor identifies your credit problems and understands your financial situation so that he can provide credit help.

Credit repair help fixes the negative items on your report. Usually the credit counselors negotiate with your creditors and the credit bureau to remove collections, late payments, charge offs from your report. The purpose is to repair and ensure that you improve your score. This actually helps you to qualify for credit or loan at better rate of interest and terms.

Here are the ways through which a credit counselor assists you in repair your bad credit.

Credit clean up advice: The credit counselors help you to repair credit through free credit counseling and forum discussions.

Identifying mistakes: The credit counselor helps you to identify the past credit mistakes and repair credit.

Help to manage debt: You receive advice on how to manage your debt and remove the negative items from your report.

Build credit fast: The credit counselor helps you to build up credit fast as you get emergency credit tips. After receiving some valuable tips you qualify for loans and help you to tackle any financial issues.
Apart from suggestion given by the experts, you should also understand certain terms given below:

Credit Score: This is 3- digit numerical value that represents your creditworthiness. The higher the score the better it is for you to avail loans at better rate of interest.

Identity Theft: It is one of the most common credit scams prevalent in the financial industry. Try to understand how does an identity theft occurs and how to avoid being a victim of identity theft.

Fair Credit Reporting Act (FCRA): These are credit laws and consumer rights which you can use for your protection. Through FCRA you avoid being a victim of fraud and identity theft.

Consolidating Your Debt for Bad Credit

Many people who have been overburdened by debt are going for debt consolidation due to its effectiveness. It helps in rescuing a person from debt. Before consolidating your debt you should have clear understanding of your financial position. You should be aware of the credit that you owe to your creditors.

After a debtor verifies his credit bills he realizes that, he cannot pay back the amount owed as he needs to chalk out a plan. Then he should immediately try to consolidate his debts and seek debt help. You do not have to pay a single penny for this service. It is a free counseling session where a debt consolidation counselor makes you aware of all possible options and tells you the best possible way to consolidate your debts. Then you need to choose the best possible way.

Do not be discouraged if you have a bad credit. Even when it seems impossible to pay back your debts in the present situation, debt consolidation should be at your aid. The first step is to take free debt counseling. Taking into account your financial condition the counselor will chalk out a debt consolidation plan for repayment of loans. Then, he will approach the creditors and negotiate on payments. Some of the creditors can reduce the total debt amount to 40% to 60% and sometimes even higher. If you successfully eliminate the debt, the debt counselor shall consolidate rest of the amount into small monthly installments.

You may believe it or not, but it is true that it does not cost anything to the debtor. The reason is that, if you apply for bankruptcy the unsecured creditors do not receive anything. They need to pay some dollars in order to pay back debts. Considering all these aspects the creditors allow a reduction on debts and also pay the debt consolidation firms in order to get back the amount of cash owed.