Category: Debt Loan Consolidation

First steps to getting control over the money

Loan consolidation is nothing more than a disadvantage because you think you have done something about your debt problem. The debt is still there, as are the habits that caused it; you just moved it. You cannot borrow your way out of debt. You cannot get out of a hole by digging out the bottom. True debt consolidation help is not quick or easy. One of the first steps to getting control over the money in- money out is to get it all in black and white. Write it all down, including any personal debts you owe to friends or your family. Then begin your plan to systematically pay off debts. This isn’t an entire answer to the problem, but simply the first step. Keep reading, keep plugging away and learning everything you can about money management.

Loan consolidation seems appealing because there is a lower interest rate on some of the debt and a lower payment. However, in almost every case we review, we find that the lower payment exists not because the rate is actually lower but because the term is extended. If you stay in debt longer, you get a lower payment, but if you stay in debt longer, you pay to loan consolidation lender more, which is why they are in the debt consolidation business.

The real way to get out of your debt is not the interest rate but a total money makeover. The way you get out of debt is by changing your habits. You need to commit to getting on a written game plan and sticking to it. Get an extra job and start paying off the debt. Live on less than you make. It is not rocket science, but it is emotional, which is why most people need help getting through it from someone. Loan consolidation is dangerous because you treat only the symptom.

The main reason for requesting a new loan

In the current study, loan consolidation study company reviewed an applicant’s age, loan purpose and amount, credit quality, employment status and yearly income. One in four personal loan applicants chose debt consolidation as the main reason for requesting a new loan. Other top reasons were for household expenses, auto costs and healthcare bills.

A professional real estate investor was surprised that borrowers requested mostly low amounts. This investor said the small figures show that borrowers use the funds such as to stop gap their finances. Borrowers are taking loans for consumption rather than revenue producing events, investor said.

Small consumer loans are taken out daily across the country, but the identity of those borrowers is often stereotyped, assumed, and generally unknown. In a unique study from loan consolidation study company, demographics of personal loan applicants were analyzed. One of the most significant finding from the research was the fact that over half of borrowers have poor credit scores. Despite having low credit scores, almost all applicants have some form of employment.

Consolidation option can be great help for you

Loan consolidation is one easily availed option which can be of greater help to you. The process of debt consolidation helps you to consolidate all your existing loans into one, and pay off your all previous loan amount at once.

Consolidation loan is specially meant to those debt-ridden borrowers, who have incurred several loans, and are bewildered while paying them off. This kind of borrowing opportunity gives a borrower a financial amount similar to the sum of his all existing debt amount. This amount is used to pay off his all previous debt amount. Consolidating of all loans into only one loan consolidation save borrower from confusion of paying so many monthly installments for several loans which they have taken.

There are two types of loan consolidation available; secured and unsecured. Secured method of consolidation will require borrowers to put collateral security. The collateral security could be your home or any other property. Secured way of borrowing has several advantages like lower interest rate, longer repayment period, smaller monthly installments, and high loan amount. The loan amount you wish to avail depends basically upon the value of your collateral.

While borrowers availing unsecured mode of this loan might not avail such advantages, due to absence of collateral security. But relief can be sought from the fact that they are getting several of their debts over. People having bad credit history are also eligible to avail loan consolidation. They can take up this loan to improve their credit score. Whether you are availing secured or unsecured way of debt consolidation loan, it is going positively to help you in shorting out much of your financial trouble.

Paying less overall interest as the balance is repaid

There is a debt relief option that can help. In fact, advises that borrowers who own homes may be able to combine their student loans with their mortgage. Stating the main premise behind debt consolidation loans, this will effectively lower the interest rates and could lower the monthly contributions as well. That should make it easier for the debtor to keep up with payments.

Consolidation company promotes a debt relief option for the baby boomers trying to salvage what is left of their retirement money. If not to help with student loans directly, debt consolidation loans can help keep the payments of other credit accounts low. This will allow the debtor to keep up with the student debt payments and thus eliminate the danger of defaulting.

As mentioned, consolidation company’s debt consolidation loans give the following benefits as; lower rate credit card consolidation loan allows payment of total loan amount, combining multiple high rate credit cards into a lower rate loan could mean paying less overall interest as the balance is repaid, credit card consolidation loans allow debtors to pay off the debt a lot sooner and, allows less payment each month as it is consolidated.