Personal Debt Tips

Advantages of a Debt Consolidation Loan

Are you paying more than one mortgage, a car loan and credit card debts? Chances are they are at different interest rates with different terms. You may want to consider getting a debt consolidation loan to combine all your payments into one. It is important to secure an interest rate for your debt consolidation loan that is lower than your credit card or your car loan in order for the consolidation to save you money. You should meet with a financial consultant to find the best debt consolidation loans for your situation.

Student Loan Debt Consolidation

Consider student loan debt consolidation to make repayment simpler and cheaper. Student loans traditionally have low interest rates anyway, but by consolidating them, you'll have only one payment and you may be able to secure a lower interest rate. An important point to remember is that the government will only allow you to consolidate your student loans one time. You should wait until the interest rates are optimal before you proceed with the consolidation. Once you consolidate, the single payment, lower interest rate and the new term will mean lower monthly payments and money saved.

3 Tips to Choosing Debt Consolidation Services

  1. Get References – Lenders and mortgage companies work hard to gain accreditation and many of them strive to maintain a high level of customer satisfaction. Make sure your lender is accredited by a third party and confirm that they have no blemishes on their record with the Better Business Bureau. Check your own state consumer affairs bureau to ensure the lender is accredited.
  2. Comparisons –Get multiple quotes and compare them. Don’t rush into the first offer you get. Feel free to play lenders off one another before you choose. Secure the best deal for your own financial future.
  3. At the end of the day, the purpose of this loan is to save you money. Choose the debt consolidation loan that is going to cost the least amount of money in the long term. Look for the lowest interest rate with a reasonable term.

Bill Consolidation Services for Everyone

Debt consolidation has grown into an industry because people are tired of writing checks to dozens of creditors every month. Bill consolidation services exist simplify the headaches of monthly bills. You pay them one fee and they take care of everything.

Can you trust a bill consolidation service? They offer guarantees that your bills will be paid on time but what if they don’t follow through? There are no easy answers to these questions.

Bill consolidation may be a better answer for you than a bill paying service. Paying one bill each month rather than ten is simpler, and you are far more likely to be successful. Get references and check business credentials when you choose any company that will be handling your personal information.

How to Choose a Consumer Debt Consolidation Company

A consumer debt consolidation company's goal is to create a reasonable financial plan for you. They will offer various suggestions and avenues you can take. They may even refer you to different consumer agencies to help you further.

The Better Business Bureau rates companies and businesses, including consumer debt consolidation agencies. They list positive feedback and complaints from clients and vendors who have worked with the company. Check out company ratings and make sure that they are reputable and have good feedback.

Bring it All Together with Debt Consolidation Services

You can actually use a bad credit loan to improve your credit. It may seem odd that you can improve your credit by taking on new creditors, but it's true. If you take out a bad credit loan and you are consistent in making your payments, you'll soon see your FICO score rise. The key is to be diligent in making your payments on time and eventually you'll improve your credit. Bad credit loans, although sometimes expensive, are worthwhile if you use them as a tool to improve your financial standing.

Now Is the Time for Debt Consolidation

You may see many ads for bad credit repair services. A reputable bad credit repair service will help you realign your debt and get into good money management habits. However, credit repair takes time – there is no immediate fix. If you're consistent, you can repair your credit score significantly within a couple of years, particularly if you take out a bad credit mortgage or loan. Making payments on time to your mortgage company is the best way to improve your credit. You may have to pay a higher interest rate for a year or two, but it will be worth it in the end. Live frugally so you can buy the house of your dreams with a low interest mortgage you get with your improved credit rating!

Getting a Fast Debt Consolidation Loan

Bad credit often comes from bad habits. You may have gotten out of control with credit card spending, or you may be careless at remembering to pay bills on time. Maybe you are bad at managing your checkbook so you bounce checks? All of these are bad habits that have serious long term ramifications to your credit rating. When you are working to improve your money management, remember to work on your bad habits. If you need to keep credit cards at home to avoid using them, than do that. If you need to set up automated payments, then do so. Work on the problem, not just the symptoms.

Bill Consolidation with a Home Equity Line of Credit

Rising home values have offered a lot of debt relief to homeowners across the United States. Many have refinanced their homes to take out equity or they have taken out a home equity loan to consolidate their bills.

A home equity loan is just as effective for bill consolidation as a debt consolidation loan. Home equity lines of credit are especially helpful because they have very low interest rates and the term of the loan is usually lengthy.

If you have a lot of debt and you own a home that has equity, a home equity line to consolidate your debt is a smart option. To figure out if it is the right option for you, ask yourself these questions:

  1. How much equity do you have in your home? Subtract your mortgage payment from the approximate fair market value of your home. The FMV (Fair Market Value) compares your home to ones like it that have sold recently.
  2. Meet with your mortgage broker about debt consolidation loans or home equity lines or credit and inquire if there are any programs that cover both.
  3. Get more than one quote while you’re out there assessing your options. Additionally, you may want to take advantage of consumer credit counseling to ensure you don’t make the same mistakes again.

Consumer Debt Consolidation vs. Business Debt Consolidation

Personal debt consolidation and business bill consolidation are very different. When a business builds debt and needs to consolidate it, there is more risk involved for the lender and adds a level of complication to business debt consolidation that doesn’t exist for individual debt consolidation.

The purpose of starting a business is to bring in revenue and hopefully yield profits. If a business builds up a large amount of debt and is not covering expenses with revenues, the bank will need to understand why the imbalance exists before they are willing to offer debt consolidation options. If company is expanding or there was a large cash outlay for a critical piece of equipment, a bank will be more likely to offer a business loan to you. There are many businesses with high debt to income ratios that are being poorly managed and have overhead that outreaches their revenue possibilities - this is what banks try to avoid with business debt consolidation loans.

Business debt consolidation loans have very different rates and terms than those of personal debt consolidation loans. If you need a business debt consolidation loan, talk with a reputable lender for help to regain control of your business debts.