By: Sara Toliver
Credit card debt is the ball and chain that keeps many people from being able to achieve their financial goals. High credit card balances coupled with high interest rates make for a seemingly never-ending schedule of monthly payments that do little to decrease the amount owed and ensure that for years to come, your hard earned money will continue to pad the profits of the credit card companies instead of getting put to use making your life more enjoyable.
Lowering the interest rates on your credit cards is the key to getting out from under your credit card debt. By lowering your rates, you can significantly lower your monthly payments allowing you to pay off your credit card debt in a fraction of the time it would take even if you do not increase your monthly payment amount. This could amount to a savings of many thousands of dollars.
Below are four possible methods you may be able to use to lower your credit card interest rates.
Consolidate Credit Card Debt
Credit cards typically carry much higher interest rates than other types of loans. If you have equity in your home, you may be able to pay off your cards by refinancing your mortgage and including the credit card debt in the new loan. You will still have the same amount of debt, but now your credit card debt will be included in your mortgage loan, which typically has a much lower interest rate.
Transfer Balances to Lower Interest Rate Credit Cards
If you have multiple credit cards, it makes sense to move your credit card balances to cards with lower interest rates. Just be careful when doing so that you are not simply transferring your debt to avoid making payments, especially when this involves opening new credit card accounts.
Improve Your Credit Score
The interest rates you qualify for are dependent on your credit score. By increasing your score, you may be able to get approved for lower interest rate loans and other credit accounts. This may enable you to qualify for a debt consolidation loan, a lower interest rate mortgage refinance, or even to get your current credit card providers to voluntarily lower your interest rates. Credit repair services exist to help you with this or you can work to repair your credit on your own.
Get Help from a Debt Counseling Company
If you are not able to use any of the above methods to take control of your credit cards on your own and you are facing the prospect of falling behind on your credit card payments, then you may be best served by working with a debt counseling company. They will work with your credit card providers to negotiate lower interest rates and may be able to help you avoid having to settle your debts (a process that severely damages your credit score) or declare bankruptcy.
Saturday, February 28, 2009
How to Know if a Loan to Stop Foreclosure is Right for You
By: Nick Adama
Homeowners facing the loss of their homes due to a financial hardship often rely primarily on getting a new line of credit to stop foreclosure. In effect, they are trying to solve a debt problem by taking on more debt, refinancing their mortgage or taking out a personal loan or car title loan to get the funds to pay back the arrears. There are a number of loan products that they may even be able to qualify for, if the foreclosure process has not gone too far, but homeowners should carefully examine their options for foreclosure loans, to make sure they are getting into an affordable payment and not simply postponing the inevitable.
The first obstacle that homeowners facing a financial crisis will have to overcome is a low credit score. Although their credit may be reasonably healthy in the beginning stages of the hardship, once they begin missing mortgage payments, their credit score will drop dramatically and it will be very difficult to obtain any kind of loan, mortgage or otherwise. This will force them to rely on alternate sources of funding, such as private real estate investors, subprime lenders specializing in bailouts, or hard money lenders, that may not offer terms in favor of the homeowners. The qualification guidelines will be drastically more difficult to meet, and costs for these types of mortgages may seem very expensive.
Additionally, the current foreclosure crisis in the real estate market has caused many lenders to go out of business, and many more to tighten their lending guidelines. One hundred percent, stated income, interest only loans are simply no longer available, and homeowners who obtained loans such as these may have very little equity to work with. Hard money lenders, while not hit quite as hard as subprime lenders, are also experiencing decreases in the value of their mortgage holdings, due to the softening market. And decreases in home values are sucking the wealth out of communities, as local homeowners turn into renters, and large corporate banks end up owning vast portions of cities, unable to sell them to a market that no longer exists. These current events will continue to make qualifying for a refinance to prevent foreclosure very difficult.
However, the most difficult qualification to meet for any loan to stop foreclosure will be the equity requirement. With banks that specialize in these kinds of loans, the house will usually have to have 70% loan to value as a minimum. Some start even lower, at 60-65%; this makes a vast number of foreclosure victims immediately unqualified to obtain financing. The bank, because they are aware of a great danger of having to foreclose on the house again, wants to know that they will have their loan paid back through the proceeds of the sheriff sale, and such low loan to value properties have a better chance of meeting this aim. There is also a better chance they will be able to sell the property on the open market for very little but still make a profit, if they have to foreclose on the loan and end up owning the house after foreclosure.
Furthermore, interest rates from foreclosure bailout lenders or hard money lenders can be relatively high. Depending on which lenders are chosen and what their individual guidelines are, payments can be in the range of 11-15% on the low end, and up to 18-20% at the highest point. These loans are designed for homeowners who experienced a temporary financial setback but are now able to afford a higher mortgage payment in exchange for the chance to establish an on-time payment history again and save their home. If the homeowners have not repaired their financial situation and established good spending habits, these qualifications will ensure they can not find a solution to foreclosure by going this route, and other options to prevent foreclosure will have to be considered.
Private investor options are often the most flexible in terms of payments and equity considerations. The homeowners will not have to give up their ownership rights to the home in all circumstances, if they use a land contract option, or they may have the right to purchase back their property after a certain period of time under a leaseback agreement. Also, investors are often more willing to work directly with the foreclosure victims, because they are more concerned with the equity in the house and its potential future profit and monthly cash flow, and they can negotiate with the foreclosing bank for a short sale to generate even more equity. But these considerations also work in the homeowners' interests, because more equity in the property will require a smaller mortgage, which will be accompanied by lower payments. This can give the foreclosure victims a little bit of extra cash every month that they can use to save for a rainy day or pay off other debts.
Other loan programs, such as payday loans or car title loans, are often the most predatory of all plans a homeowner can take to save their home. In nearly all cases, relying on such loans during a financial hardship is almost a guarantee for future financial problems, and will result in the foreclosure victims becoming even further behind on monthly expenses. Although there is a place and time that these loans can help homeowners out of a tight situation, they should be avoided when there is a serious financial hardship that does not have an end in sight. And they should be considered as a last resort to make a payment, rather than a short term solution that can be relied upon numerous times to keep a property out of foreclosure.
Homeowners have numerous options when looking at loans to save a home from foreclosure, but the qualifications for many of these loans will be difficult (if not impossible) to meet. Due to the drawbacks and difficulties with these loans, using debt to solve a debt problem should be one part of the plan to stop foreclosure, but it should not be the only part. Other options need to be considered in addition to credit, especially working with the lender, selling the home, and filing bankruptcy to avoid foreclosure. The problem of losing a home can be solved in various ways, but every situation requires a unique perspective and several backups in order to be successful. Loans of any kind are just one part of the equation in homeowners helping themselves to understand what can be done to solve their current problem and ensure they have a long term plan to prevent going into foreclosure ever again.
Homeowners facing the loss of their homes due to a financial hardship often rely primarily on getting a new line of credit to stop foreclosure. In effect, they are trying to solve a debt problem by taking on more debt, refinancing their mortgage or taking out a personal loan or car title loan to get the funds to pay back the arrears. There are a number of loan products that they may even be able to qualify for, if the foreclosure process has not gone too far, but homeowners should carefully examine their options for foreclosure loans, to make sure they are getting into an affordable payment and not simply postponing the inevitable.
The first obstacle that homeowners facing a financial crisis will have to overcome is a low credit score. Although their credit may be reasonably healthy in the beginning stages of the hardship, once they begin missing mortgage payments, their credit score will drop dramatically and it will be very difficult to obtain any kind of loan, mortgage or otherwise. This will force them to rely on alternate sources of funding, such as private real estate investors, subprime lenders specializing in bailouts, or hard money lenders, that may not offer terms in favor of the homeowners. The qualification guidelines will be drastically more difficult to meet, and costs for these types of mortgages may seem very expensive.
Additionally, the current foreclosure crisis in the real estate market has caused many lenders to go out of business, and many more to tighten their lending guidelines. One hundred percent, stated income, interest only loans are simply no longer available, and homeowners who obtained loans such as these may have very little equity to work with. Hard money lenders, while not hit quite as hard as subprime lenders, are also experiencing decreases in the value of their mortgage holdings, due to the softening market. And decreases in home values are sucking the wealth out of communities, as local homeowners turn into renters, and large corporate banks end up owning vast portions of cities, unable to sell them to a market that no longer exists. These current events will continue to make qualifying for a refinance to prevent foreclosure very difficult.
However, the most difficult qualification to meet for any loan to stop foreclosure will be the equity requirement. With banks that specialize in these kinds of loans, the house will usually have to have 70% loan to value as a minimum. Some start even lower, at 60-65%; this makes a vast number of foreclosure victims immediately unqualified to obtain financing. The bank, because they are aware of a great danger of having to foreclose on the house again, wants to know that they will have their loan paid back through the proceeds of the sheriff sale, and such low loan to value properties have a better chance of meeting this aim. There is also a better chance they will be able to sell the property on the open market for very little but still make a profit, if they have to foreclose on the loan and end up owning the house after foreclosure.
Furthermore, interest rates from foreclosure bailout lenders or hard money lenders can be relatively high. Depending on which lenders are chosen and what their individual guidelines are, payments can be in the range of 11-15% on the low end, and up to 18-20% at the highest point. These loans are designed for homeowners who experienced a temporary financial setback but are now able to afford a higher mortgage payment in exchange for the chance to establish an on-time payment history again and save their home. If the homeowners have not repaired their financial situation and established good spending habits, these qualifications will ensure they can not find a solution to foreclosure by going this route, and other options to prevent foreclosure will have to be considered.
Private investor options are often the most flexible in terms of payments and equity considerations. The homeowners will not have to give up their ownership rights to the home in all circumstances, if they use a land contract option, or they may have the right to purchase back their property after a certain period of time under a leaseback agreement. Also, investors are often more willing to work directly with the foreclosure victims, because they are more concerned with the equity in the house and its potential future profit and monthly cash flow, and they can negotiate with the foreclosing bank for a short sale to generate even more equity. But these considerations also work in the homeowners' interests, because more equity in the property will require a smaller mortgage, which will be accompanied by lower payments. This can give the foreclosure victims a little bit of extra cash every month that they can use to save for a rainy day or pay off other debts.
Other loan programs, such as payday loans or car title loans, are often the most predatory of all plans a homeowner can take to save their home. In nearly all cases, relying on such loans during a financial hardship is almost a guarantee for future financial problems, and will result in the foreclosure victims becoming even further behind on monthly expenses. Although there is a place and time that these loans can help homeowners out of a tight situation, they should be avoided when there is a serious financial hardship that does not have an end in sight. And they should be considered as a last resort to make a payment, rather than a short term solution that can be relied upon numerous times to keep a property out of foreclosure.
Homeowners have numerous options when looking at loans to save a home from foreclosure, but the qualifications for many of these loans will be difficult (if not impossible) to meet. Due to the drawbacks and difficulties with these loans, using debt to solve a debt problem should be one part of the plan to stop foreclosure, but it should not be the only part. Other options need to be considered in addition to credit, especially working with the lender, selling the home, and filing bankruptcy to avoid foreclosure. The problem of losing a home can be solved in various ways, but every situation requires a unique perspective and several backups in order to be successful. Loans of any kind are just one part of the equation in homeowners helping themselves to understand what can be done to solve their current problem and ensure they have a long term plan to prevent going into foreclosure ever again.
Friday, February 27, 2009
Identifying and Avoiding Mortgage Fraud
By: Brian S. Icenhower
Recent financial industry distress publicly attributed to widespread mortgage loan defaults has generated mounting pressure on federal prosecutors to increase investigations into incidents of mortgage fraud across the nation. On February 6, 2004, CNN reported that the FBI warned that mortgage fraud was becoming so rampant that the resulting “epidemic" of fraud could trigger a massive financial crisis. Mortgage fraud has now become so prevalent that the United States Department of Justice and the Federal Bureau of Investigation have been forced to create an entirely new category for tracking these cases. According to a CBS news report, the number of FBI agents assigned to mortgage related crimes increased by 50 percent from 2007 to 2008. Prosecutors and investigators on both the state and local levels are also feverishly organizing task forces and creating real estate fraud departments to counter this burgeoning wave of crime.
CRIME & PUNISHMENT
The primary focus of these investigations appears to be on borrowers, investors, mortgage brokers, appraisers and real estate agents. Some of the charges levied against these perpetrators have included making false statements on loan applications, bank fraud, mail fraud, wire fraud, conspiracy to launder funds and a number of applicable state laws. However, the primary legal vehicle implemented by federal prosecutors has been section 1014 of Title 18 of the United States Code which declares mortgage fraud as a federal crime encompassing anyone who willfully overvalues any land or property, or knowingly makes any false statement, for the purpose of influencing a financial institution upon a loan application, purchase agreement or other related documents. A violation of the federal mortgage fraud law (18 U.S.C. § 1014) alone is punishable by up to thirty years imprisonment and a one million dollar fine.
MORTGAGE FRAUD SCHEMES
The most effective way to avoid prosecution for mortgage fraud is to identify mortgage fraud schemes prior to any actual involvement. Most mortgage fraud offenses fall into one of two general categories: “fraud for housing" and “fraud for profit". Fraud for housing often involves fraudulent acts committed by a borrower, often coached by his or her mortgage broker or real estate agent, to obtain a loan for the ultimate goal of acquiring a home. These fraudulent facts generally pertain to the falsification of facts and documents during the loan application process to enable the borrower to obtain financing that he or she would otherwise not be qualified to receive. Conversely, fraud for profit typically involves a more concerted plan to abuse the entire real estate transactional process for pecuniary gain.
FRAUD FOR HOUSING
Income Fraud
This occurs when a borrower inflates his or her amount of income to qualify for a loan or a larger loan amount. Although recent reductions in the use of “stated income" or “no-doc liar loans" has somewhat curbed income fraud, daring borrowers are increasingly generating more fraudulent documents to falsify income. Information technology and photocopy equipment have become so advanced that very convincing documentation, such as income statements, savings accounts and tax returns, can be produced on demand.
Employment Fraud
In order to justify overstated income in a loan application, borrowers will claim self-employment in a non-existent company or represent having a higher position in a company than the borrower actually holds.
Failure to Disclose Liabilities
The debt-to-income ratio is an important part of the loan underwriting criteria used to determine a borrower's eligibility for mortgage loans. Consequently, borrowers will conceal financial obligations like newly acquired credit card debt, other mortgages, and private loans to artificially reduce their debt-to-income ratios.
Occupancy Fraud
Generally occurs when a borrower states on a loan application that he or she intends to occupy a property as a primary residence to secure a lower interest rate when the borrower actually intends to obtain the loan to acquire an investment property.
FRAUD FOR PROFIT
Equity Skimming and Cash-Back Schemes
A straw buyer is typically implemented as the buyer of the property due to his or her creditworthiness and resulting ability to obtain favorable financing. Unknowing straw buyers can be manipulated by mortgage brokers and real estate agents to purchase a property as a primary residence with the broker or agent later serving as a property manager to collect anticipated rental income. After the escrow closes and the mortgage and real estate brokers collect their commissions, they proceed to collect rental income and fail to make the mortgage payments.
Complex schemes can involve a knowing straw buyer, an appraiser who intentionally overstates the property's value, a dishonest seller that intentionally inflates the selling price, and a dishonest settlement officer that makes undisclosed disbursements from the loan proceeds. All of these conspirators collaborate to collect portions of the proceeds of an inappropriately large loan before eventually letting it go into default.
Appraisal Fraud or Price Inflation
This fraud occurs when a dishonest appraiser intentionally overstates the value of a property or when an existing appraisal is altered to reflect a higher value. When a home is overvalued, more money can be obtained by the seller in a purchase transaction or by the borrower in a cash-out refinance.
The New Appraisal Fraud: Price Deflation
When done legitimately, a short sale occurs when a borrower that owes more than his or her property is worth sells the property below market value and the lender agrees to accept the lower repayment amount and forgive the difference. A new hybrid of fraud has emerged where an appraiser or a real estate agent drastically devalues the property in an appraisal or broker's price opinion (BPO) so that the home will sell with ease at a price well below market value. Of course the new buyer is in collaboration with the seller, agent and appraiser, so all of the conspirators proceed to sell the home at a higher price for a big profit.
Identity Theft
Identity theft fraud occurs when a victim's identity is assumed by another to obtain a mortgage without ever intending to make any payments on the loan. The perpetrators often abscond with a portion of the loan proceeds and sometimes are daring enough to lease the property and collect some deposits and rental income before disappearing.
The Buy and Bail
This completely new scheme is perpetrated by a home owner who cannot sell the home because more is owed on the property than its worth. Because no lender will provide the owner a loan for a second primary residence, the owner tells the lender that he or she plans to rent out the current home despite having no intention of doing so. Sometimes a falsified rental agreement is used to further support the falsehood. Once the second home is purchased, the owner “bails" on the original home and fails to make any further mortgage payments.
AVOIDING & PREVENTING FRAUD
Mortgage fraud frequently emanates from groups that complete an abnormal amount of similar transactions or churn out many offers to purchase at once. These outfits may appear disorganized or unprofessional due to the large amount of transactions they are attempting to manage. It is also no coincidence that mortgage fraud has significantly increased as housing values have decreased since most fraud schemes involve a financially distressed or otherwise vulnerable seller. It is equally important to remember that agents owe a very strict fiduciary duty to act in their clients' best interests. So before reporting a client to your local authorities, speak with legal counsel or your state real estate licensing department to ensure that your proposed actions don't constitute a breach of your fiduciary duty to your client.
Real estate agents are in a unique position that enables them to identify and even prevent the occurrence of fraud by recognizing the red flags, asking appropriate questions, and giving the principals in their transactions the full picture of what consequences are associated with participating in mortgage fraud. While a lot of damage has been done in the real estate market, we can prevent more of the same from occurring in the future.
About The Author:
Brian S. Icenhower, Esq., BS, JD, CRB, CRS, ABR, a California Association of Realtors Director, practicing real estate attorney, a real estate expert witness and litigation consultant, a prosecution consultant of Tulare County District Attorney Real Estate Fraud. He may be contacted at bicenhower@icenhowerrealestate.com, or www.icenhowerrealestate.com.
Recent financial industry distress publicly attributed to widespread mortgage loan defaults has generated mounting pressure on federal prosecutors to increase investigations into incidents of mortgage fraud across the nation. On February 6, 2004, CNN reported that the FBI warned that mortgage fraud was becoming so rampant that the resulting “epidemic" of fraud could trigger a massive financial crisis. Mortgage fraud has now become so prevalent that the United States Department of Justice and the Federal Bureau of Investigation have been forced to create an entirely new category for tracking these cases. According to a CBS news report, the number of FBI agents assigned to mortgage related crimes increased by 50 percent from 2007 to 2008. Prosecutors and investigators on both the state and local levels are also feverishly organizing task forces and creating real estate fraud departments to counter this burgeoning wave of crime.
CRIME & PUNISHMENT
The primary focus of these investigations appears to be on borrowers, investors, mortgage brokers, appraisers and real estate agents. Some of the charges levied against these perpetrators have included making false statements on loan applications, bank fraud, mail fraud, wire fraud, conspiracy to launder funds and a number of applicable state laws. However, the primary legal vehicle implemented by federal prosecutors has been section 1014 of Title 18 of the United States Code which declares mortgage fraud as a federal crime encompassing anyone who willfully overvalues any land or property, or knowingly makes any false statement, for the purpose of influencing a financial institution upon a loan application, purchase agreement or other related documents. A violation of the federal mortgage fraud law (18 U.S.C. § 1014) alone is punishable by up to thirty years imprisonment and a one million dollar fine.
MORTGAGE FRAUD SCHEMES
The most effective way to avoid prosecution for mortgage fraud is to identify mortgage fraud schemes prior to any actual involvement. Most mortgage fraud offenses fall into one of two general categories: “fraud for housing" and “fraud for profit". Fraud for housing often involves fraudulent acts committed by a borrower, often coached by his or her mortgage broker or real estate agent, to obtain a loan for the ultimate goal of acquiring a home. These fraudulent facts generally pertain to the falsification of facts and documents during the loan application process to enable the borrower to obtain financing that he or she would otherwise not be qualified to receive. Conversely, fraud for profit typically involves a more concerted plan to abuse the entire real estate transactional process for pecuniary gain.
FRAUD FOR HOUSING
Income Fraud
This occurs when a borrower inflates his or her amount of income to qualify for a loan or a larger loan amount. Although recent reductions in the use of “stated income" or “no-doc liar loans" has somewhat curbed income fraud, daring borrowers are increasingly generating more fraudulent documents to falsify income. Information technology and photocopy equipment have become so advanced that very convincing documentation, such as income statements, savings accounts and tax returns, can be produced on demand.
Employment Fraud
In order to justify overstated income in a loan application, borrowers will claim self-employment in a non-existent company or represent having a higher position in a company than the borrower actually holds.
Failure to Disclose Liabilities
The debt-to-income ratio is an important part of the loan underwriting criteria used to determine a borrower's eligibility for mortgage loans. Consequently, borrowers will conceal financial obligations like newly acquired credit card debt, other mortgages, and private loans to artificially reduce their debt-to-income ratios.
Occupancy Fraud
Generally occurs when a borrower states on a loan application that he or she intends to occupy a property as a primary residence to secure a lower interest rate when the borrower actually intends to obtain the loan to acquire an investment property.
FRAUD FOR PROFIT
Equity Skimming and Cash-Back Schemes
A straw buyer is typically implemented as the buyer of the property due to his or her creditworthiness and resulting ability to obtain favorable financing. Unknowing straw buyers can be manipulated by mortgage brokers and real estate agents to purchase a property as a primary residence with the broker or agent later serving as a property manager to collect anticipated rental income. After the escrow closes and the mortgage and real estate brokers collect their commissions, they proceed to collect rental income and fail to make the mortgage payments.
Complex schemes can involve a knowing straw buyer, an appraiser who intentionally overstates the property's value, a dishonest seller that intentionally inflates the selling price, and a dishonest settlement officer that makes undisclosed disbursements from the loan proceeds. All of these conspirators collaborate to collect portions of the proceeds of an inappropriately large loan before eventually letting it go into default.
Appraisal Fraud or Price Inflation
This fraud occurs when a dishonest appraiser intentionally overstates the value of a property or when an existing appraisal is altered to reflect a higher value. When a home is overvalued, more money can be obtained by the seller in a purchase transaction or by the borrower in a cash-out refinance.
The New Appraisal Fraud: Price Deflation
When done legitimately, a short sale occurs when a borrower that owes more than his or her property is worth sells the property below market value and the lender agrees to accept the lower repayment amount and forgive the difference. A new hybrid of fraud has emerged where an appraiser or a real estate agent drastically devalues the property in an appraisal or broker's price opinion (BPO) so that the home will sell with ease at a price well below market value. Of course the new buyer is in collaboration with the seller, agent and appraiser, so all of the conspirators proceed to sell the home at a higher price for a big profit.
Identity Theft
Identity theft fraud occurs when a victim's identity is assumed by another to obtain a mortgage without ever intending to make any payments on the loan. The perpetrators often abscond with a portion of the loan proceeds and sometimes are daring enough to lease the property and collect some deposits and rental income before disappearing.
The Buy and Bail
This completely new scheme is perpetrated by a home owner who cannot sell the home because more is owed on the property than its worth. Because no lender will provide the owner a loan for a second primary residence, the owner tells the lender that he or she plans to rent out the current home despite having no intention of doing so. Sometimes a falsified rental agreement is used to further support the falsehood. Once the second home is purchased, the owner “bails" on the original home and fails to make any further mortgage payments.
AVOIDING & PREVENTING FRAUD
Mortgage fraud frequently emanates from groups that complete an abnormal amount of similar transactions or churn out many offers to purchase at once. These outfits may appear disorganized or unprofessional due to the large amount of transactions they are attempting to manage. It is also no coincidence that mortgage fraud has significantly increased as housing values have decreased since most fraud schemes involve a financially distressed or otherwise vulnerable seller. It is equally important to remember that agents owe a very strict fiduciary duty to act in their clients' best interests. So before reporting a client to your local authorities, speak with legal counsel or your state real estate licensing department to ensure that your proposed actions don't constitute a breach of your fiduciary duty to your client.
Real estate agents are in a unique position that enables them to identify and even prevent the occurrence of fraud by recognizing the red flags, asking appropriate questions, and giving the principals in their transactions the full picture of what consequences are associated with participating in mortgage fraud. While a lot of damage has been done in the real estate market, we can prevent more of the same from occurring in the future.
About The Author:
Brian S. Icenhower, Esq., BS, JD, CRB, CRS, ABR, a California Association of Realtors Director, practicing real estate attorney, a real estate expert witness and litigation consultant, a prosecution consultant of Tulare County District Attorney Real Estate Fraud. He may be contacted at bicenhower@icenhowerrealestate.com, or www.icenhowerrealestate.com.
What happens when a second mortgage debt is written off?
By: Jessica Bennet
Scenario: Our second mortgage was an original $20,000,00 loan which has now escalated to $35,000,00. The mortgage company I dealt with is going to charge off this month. My husband is disabled and 1 child is disabled. The loan is in my husband's name but the deed is in my name. I understand we will receive a 1099-C form. But what happens to the charge off with a lien on the house. I understand the debt is written off. But how does it affect me and will it come off in 7 years?
Solution: Your lender or mortgage company having written off your second mortgage or declared it as a charge-off, the debt will be considered as uncollectible. This indicates that the unpaid loan balance will be reported as a loss when the lender uses an accounting method for calculation of taxes.
Every year the lender/mortgage company files a Profit and Loss Statement with the Internal Revenue Service. All of the year's bad debts including individual charged-off accounts are added up as an item in the Loss section of the Profit and Loss Statement. But this does not mean that the lender cannot collect the debt from you. Even after declaring a charge-off, the lender may hand over your debt to a collection agency.
Moreover, until and unless the lender issues a 1099-C form, you cannot consider the debt as forgiven. And, even if your lender does not send you the form, he may have sent it to the Internal Revenue Service. Therefore, you should claim the unpaid balance on the second mortgage or the charged-off amount as income on your income tax return in the year the debt has been forgiven.
Once you pay income tax on the forgiven debt, the lender should not come after the unpaid balance again. But the unpaid debt gets reflected on your credit report as a negative item. And, it would take you almost 7 years to remove a charge-off from the report. This affects your chances of qualifying for loans at reasonable rates of interest.
However, you can pay off the second mortgage balance in full and update the charge-off as “Paid Charge-off" on your credit report. Or else, you can make a partial payment towards the unpaid debt. This would get reflected on your report as a “Settled Charge-off". Until and unless the charge-off is paid or settled, you cannot remove the lien on your home. So, even if the loan is in your husband's name, you can pay it off to remove the charge-off and get clear title to the property.
Once you have settled the charge-off after paying taxes on the forgiven debt, you can file an amended return with a written proof of the settled debt. This will help you to get back a part or the entire taxes paid on the settled debt. But there is a statute of limitation which allows you to claim the refund on such taxes within a period of 3 years of claiming the cancelled debt as income.
About The Author:
Author's Bio:
Jessica Bennet is a regular writer of financial concepts and her contributions are featured in various financial websites. She is associated with MortgageFit.Com and her ideas and insights on financial issues are indeed valuable for the community.
Scenario: Our second mortgage was an original $20,000,00 loan which has now escalated to $35,000,00. The mortgage company I dealt with is going to charge off this month. My husband is disabled and 1 child is disabled. The loan is in my husband's name but the deed is in my name. I understand we will receive a 1099-C form. But what happens to the charge off with a lien on the house. I understand the debt is written off. But how does it affect me and will it come off in 7 years?
Solution: Your lender or mortgage company having written off your second mortgage or declared it as a charge-off, the debt will be considered as uncollectible. This indicates that the unpaid loan balance will be reported as a loss when the lender uses an accounting method for calculation of taxes.
Every year the lender/mortgage company files a Profit and Loss Statement with the Internal Revenue Service. All of the year's bad debts including individual charged-off accounts are added up as an item in the Loss section of the Profit and Loss Statement. But this does not mean that the lender cannot collect the debt from you. Even after declaring a charge-off, the lender may hand over your debt to a collection agency.
Moreover, until and unless the lender issues a 1099-C form, you cannot consider the debt as forgiven. And, even if your lender does not send you the form, he may have sent it to the Internal Revenue Service. Therefore, you should claim the unpaid balance on the second mortgage or the charged-off amount as income on your income tax return in the year the debt has been forgiven.
Once you pay income tax on the forgiven debt, the lender should not come after the unpaid balance again. But the unpaid debt gets reflected on your credit report as a negative item. And, it would take you almost 7 years to remove a charge-off from the report. This affects your chances of qualifying for loans at reasonable rates of interest.
However, you can pay off the second mortgage balance in full and update the charge-off as “Paid Charge-off" on your credit report. Or else, you can make a partial payment towards the unpaid debt. This would get reflected on your report as a “Settled Charge-off". Until and unless the charge-off is paid or settled, you cannot remove the lien on your home. So, even if the loan is in your husband's name, you can pay it off to remove the charge-off and get clear title to the property.
Once you have settled the charge-off after paying taxes on the forgiven debt, you can file an amended return with a written proof of the settled debt. This will help you to get back a part or the entire taxes paid on the settled debt. But there is a statute of limitation which allows you to claim the refund on such taxes within a period of 3 years of claiming the cancelled debt as income.
About The Author:
Author's Bio:
Jessica Bennet is a regular writer of financial concepts and her contributions are featured in various financial websites. She is associated with MortgageFit.Com and her ideas and insights on financial issues are indeed valuable for the community.
Thursday, February 26, 2009
Where To Start When You Compare Credit Cards?
By: Avi Solutionz
Each and every credit card differs in the features and benefits they offer. Nobody but you can compare credit cards and choose the one most suited to you and your circumstances. Websites that compare credit cards will give you invaluable advice and guidance but the choice of which credit card best meets your needs at this time is completely up to you. When you compare credit cards you will soon realize that there isn’t a single perfect one and they will all need careful management to avoid the pitfall of debt.
In advance of even asking for a credit card consider how you will use it and make this the basis to compare credit cards. Obviously it is about money, but what is the money for? Do you want your credit card for relatively small daily expenses that save you carrying cash that will then be paid up when the credit card statement arrives? Or perhaps you already have an outstanding balance on another credit card and want to transfer this to a cheaper one? Then use the new one for spending too. You will definitely want to compare credit cards on the basis of transfer rates, costs and the rates on current spending.
When it comes to comparing credit cards, how you intend to use it is the fundamental question. The consequence of failing to compare credit cards and taking on the wrong one for you can be very expensive and even ruinous.
So let’s take a look at some of the important features when you compare credit cards and the sorts of users they are suited to. When you identify yourself in this comparison you will be a closer to making the right choice of credit card.
Features to consider when you compare credit cards:
Ø All credit cards let you buy stuff without the cash changing hands or being moved from your bank account to the credit card company, at the moment of transaction. Rather you get a statement each month listing all your expenses and a date when must pay some amount.
Ø All credit cards would prefer you not to pay the whole amount because then they will make money by charging you interest. But there will be a minimum amount to be repaid.
Ø All credit cards will charge you a fee if you a) are late in paying the minimum, b) fail to pay anything at all or c) go over your stated limit.
There are basically two sorts of credit card user. There are people who spend and then pay up the credit card balance each month and then there are those who old the credit card balance as an ongoing loan and make the minimum payment. Which type of user you are is the starting point when you compare credit cards.
Each and every credit card differs in the features and benefits they offer. Nobody but you can compare credit cards and choose the one most suited to you and your circumstances. Websites that compare credit cards will give you invaluable advice and guidance but the choice of which credit card best meets your needs at this time is completely up to you. When you compare credit cards you will soon realize that there isn’t a single perfect one and they will all need careful management to avoid the pitfall of debt.
In advance of even asking for a credit card consider how you will use it and make this the basis to compare credit cards. Obviously it is about money, but what is the money for? Do you want your credit card for relatively small daily expenses that save you carrying cash that will then be paid up when the credit card statement arrives? Or perhaps you already have an outstanding balance on another credit card and want to transfer this to a cheaper one? Then use the new one for spending too. You will definitely want to compare credit cards on the basis of transfer rates, costs and the rates on current spending.
When it comes to comparing credit cards, how you intend to use it is the fundamental question. The consequence of failing to compare credit cards and taking on the wrong one for you can be very expensive and even ruinous.
So let’s take a look at some of the important features when you compare credit cards and the sorts of users they are suited to. When you identify yourself in this comparison you will be a closer to making the right choice of credit card.
Features to consider when you compare credit cards:
Ø All credit cards let you buy stuff without the cash changing hands or being moved from your bank account to the credit card company, at the moment of transaction. Rather you get a statement each month listing all your expenses and a date when must pay some amount.
Ø All credit cards would prefer you not to pay the whole amount because then they will make money by charging you interest. But there will be a minimum amount to be repaid.
Ø All credit cards will charge you a fee if you a) are late in paying the minimum, b) fail to pay anything at all or c) go over your stated limit.
There are basically two sorts of credit card user. There are people who spend and then pay up the credit card balance each month and then there are those who old the credit card balance as an ongoing loan and make the minimum payment. Which type of user you are is the starting point when you compare credit cards.
Advantages of Mortgage Refinancing
By: Lesley Lyon
The basic concept of mortgage refinance is that it acts as a second loan availed of on a property or home substituting any previous loan on the same property. Mortgage refinance offers low interest rate, also cuts down the loan repayment term by refinancing the house or property and in turn lowers the mortgage payment. For many people, mortgage refinance provides an opportunity to improve the monthly cash flow by helping them get back on their feet.
Mortgage refinancing can be an advantageous move financially as many home owners benefit out of refinance for the purposes of either cash out or to change from an adjustable rate mortgage to a fixed rate or debt consolidation to lower their interest rate if they are either locked into an adjustable rate mortgage or fixed rate mortgage. Even though the refinancing option does not always help a person save more money, it provides a good opportunity for improving the loan terms and the benefits of debt consolidation making it an option worth considering.
When the interest rates drop drastically, people think of refinancing their loans got towards a car or home. It is worth to consider mortgage refinance or refinance loan when a person is paying high interest rates. The mortgage refinancing option can be very enticing as the interest rates are lower than when the person originally got his mortgage loan.
The person needs to know if he plans to live in the house which he is refinancing for more years or even for the rest of his life. This will help him come to a conclusion regarding the type of refinance loan he would like to go with. Before going for a refinance it is good to be sure of it first.
The person should be aware of his budget. Before going for a refinance he needs to know how much he can afford. He should have a realistic monthly payment plan so that he can be sure of paying it without any problem on time every month. The fine print of the refinance loan needs to be read in a detailed manner especially when it offers a very low interest rate. There may be a catch as those who are eager about getting a lower interest rate may not read the fine print carefully. Such persons end up paying a huge amount at the end. They should look for any penalties levied if the loan is paid early as the lender is assured of getting more interest rates and in turn more profits.
Understanding the loan is very important. In case any queries required to be clarified, there is no harm in asking questions, as it will only make the process smooth. If required, the help of a legal professional can be had to review the documents on the behalf of the borrower. This saves both money and time. Only after careful review, documents need to be signed. Apart from all these things, the credit history or credit score should be known to the borrower, as it will determine the money got through refinance loan and the loan terms.
About The Author:
Lesley Lyon is an expert in dealing with finance related matters. He has written several informative articles on topics like credit card, debt consolidation, building a good credit score, mortgage, home refinancing, loan and insurance. He regularly contributes articles to web guides on mortgage and home refinancing http://www.fundsleader.info and http://www.financialdeals.info
The basic concept of mortgage refinance is that it acts as a second loan availed of on a property or home substituting any previous loan on the same property. Mortgage refinance offers low interest rate, also cuts down the loan repayment term by refinancing the house or property and in turn lowers the mortgage payment. For many people, mortgage refinance provides an opportunity to improve the monthly cash flow by helping them get back on their feet.
Mortgage refinancing can be an advantageous move financially as many home owners benefit out of refinance for the purposes of either cash out or to change from an adjustable rate mortgage to a fixed rate or debt consolidation to lower their interest rate if they are either locked into an adjustable rate mortgage or fixed rate mortgage. Even though the refinancing option does not always help a person save more money, it provides a good opportunity for improving the loan terms and the benefits of debt consolidation making it an option worth considering.
When the interest rates drop drastically, people think of refinancing their loans got towards a car or home. It is worth to consider mortgage refinance or refinance loan when a person is paying high interest rates. The mortgage refinancing option can be very enticing as the interest rates are lower than when the person originally got his mortgage loan.
The person needs to know if he plans to live in the house which he is refinancing for more years or even for the rest of his life. This will help him come to a conclusion regarding the type of refinance loan he would like to go with. Before going for a refinance it is good to be sure of it first.
The person should be aware of his budget. Before going for a refinance he needs to know how much he can afford. He should have a realistic monthly payment plan so that he can be sure of paying it without any problem on time every month. The fine print of the refinance loan needs to be read in a detailed manner especially when it offers a very low interest rate. There may be a catch as those who are eager about getting a lower interest rate may not read the fine print carefully. Such persons end up paying a huge amount at the end. They should look for any penalties levied if the loan is paid early as the lender is assured of getting more interest rates and in turn more profits.
Understanding the loan is very important. In case any queries required to be clarified, there is no harm in asking questions, as it will only make the process smooth. If required, the help of a legal professional can be had to review the documents on the behalf of the borrower. This saves both money and time. Only after careful review, documents need to be signed. Apart from all these things, the credit history or credit score should be known to the borrower, as it will determine the money got through refinance loan and the loan terms.
About The Author:
Lesley Lyon is an expert in dealing with finance related matters. He has written several informative articles on topics like credit card, debt consolidation, building a good credit score, mortgage, home refinancing, loan and insurance. He regularly contributes articles to web guides on mortgage and home refinancing http://www.fundsleader.info and http://www.financialdeals.info
Wednesday, February 25, 2009
2 Easy Credit Card Debt Consolidation Techniques
By: Debt Consolidation
Is your credit card debt the sole cause of your financial headache? Or maybe you are dealing with multiple credit cards, store cards and unsecured loans? If you can answer yes to any of these questions then it is essential that you deal with your debts as soon as possible, and debt consolidation is one way to do so.
As soon as you realise that your credit card spending over the festive season, or at any time of the year, has left you with a pile of debt, then you may be on the lookout for easy but effective ways of consolidating your current credit card debt.
Debt Consolidation allows you to reduce monthly payments to your debts which should free up some extra money to help you with your secured payments, such as mortgage or rent. You may also find that debt consolidation of your credit card offers you a more competitive interest rate and that you can look towards being debt free. There are 2 Easy Credit Card Debt Consolidation Techniques:
Consolidation Technique 1: Debt Management Programmes.
Not everyone wants to consolidate their debt by getting themselves into more debt through a loan. Debt Management Programmes allow you to consolidate debt without getting any further borrowing which should offer you greater control over your finances.
What the Debt Management Programme will do is offer your creditors a lower monthly payment that you can afford. No matter how many creditors you have, a debt management programme allows you to benefit from just having a single payment to make. Your creditors may also be willing to freeze your interest and any additional charges on your unsecured debt, meaning that you can become debt free much faster.
Consolidation Technique 2: Debt Consolidation Loans.
Although Debt Management Programmes offer you a way to consolidate your debt without a loan, they are not suitable for everybody as there are downsides such as your credit rating is affected. If you are not currently missing payments to your unsecured creditors but you are still looking for an easy way to consolidate your credit card debt, then a debt consolidation loan could be your answer.
Debt Consolidation Loans are often secured against your home so it is essential that you can afford to make these new payments or your home will be at risk. You may find that the benefits outweigh the implications as you could be making a lower monthly payment with a lower level of interest.
About The Author:
Struggling with debt consolidation? We can offer you free advice to find the perfect way for you to consolidate your debt so you can manage your finances with ease. Discover the advantages and disadvantages of debt consolidation.
Is your credit card debt the sole cause of your financial headache? Or maybe you are dealing with multiple credit cards, store cards and unsecured loans? If you can answer yes to any of these questions then it is essential that you deal with your debts as soon as possible, and debt consolidation is one way to do so.
As soon as you realise that your credit card spending over the festive season, or at any time of the year, has left you with a pile of debt, then you may be on the lookout for easy but effective ways of consolidating your current credit card debt.
Debt Consolidation allows you to reduce monthly payments to your debts which should free up some extra money to help you with your secured payments, such as mortgage or rent. You may also find that debt consolidation of your credit card offers you a more competitive interest rate and that you can look towards being debt free. There are 2 Easy Credit Card Debt Consolidation Techniques:
Consolidation Technique 1: Debt Management Programmes.
Not everyone wants to consolidate their debt by getting themselves into more debt through a loan. Debt Management Programmes allow you to consolidate debt without getting any further borrowing which should offer you greater control over your finances.
What the Debt Management Programme will do is offer your creditors a lower monthly payment that you can afford. No matter how many creditors you have, a debt management programme allows you to benefit from just having a single payment to make. Your creditors may also be willing to freeze your interest and any additional charges on your unsecured debt, meaning that you can become debt free much faster.
Consolidation Technique 2: Debt Consolidation Loans.
Although Debt Management Programmes offer you a way to consolidate your debt without a loan, they are not suitable for everybody as there are downsides such as your credit rating is affected. If you are not currently missing payments to your unsecured creditors but you are still looking for an easy way to consolidate your credit card debt, then a debt consolidation loan could be your answer.
Debt Consolidation Loans are often secured against your home so it is essential that you can afford to make these new payments or your home will be at risk. You may find that the benefits outweigh the implications as you could be making a lower monthly payment with a lower level of interest.
About The Author:
Struggling with debt consolidation? We can offer you free advice to find the perfect way for you to consolidate your debt so you can manage your finances with ease. Discover the advantages and disadvantages of debt consolidation.
Checklist for Those on Debt Management Plan
By: Andrea Smith
When confronted with serious debt, people often run to credit counseling agencies for help. True, you can find reputable non-profit organizations or credit counseling services who offer genuine debt relief. However, Federal Trade Commission (FTC) warns consumers against fake credit counseling agencies who may take advantage of your bad debt situation.
Take note that being a “non-profit" credit counseling organization does not guarantee that it is legitimate. Some groups may claim to be non-profit yet may charge unreasonable fees and hidden costs for their services. If you're not aware of deceptive tactics that fake agencies use, you could be in trouble. For example, a false agency may force a client to enroll in a DMP or Debt Management Plan. Although, enrolling in a DMP is not bad, you need to make sure that you're dealing with a trusted credit counseling service.
What is a Debt Management Plan?
Under a Debt Management Program, you would be submitting monthly payments to the agency. In turn, your agency would be the one to distribute your payments to the corresponding creditors. This is usually done after a credit counseling agency has negotiated with your creditors.
The danger about this arrangement is that your credit counseling agency may not be submitting your payments to your creditors on time. Some fraudulent organizations have been found to use their clients' money instead of submitting them to the appropriate lenders. As a result, the borrower is stuck in debt with his creditors without his knowledge. If you have decided to enroll in a DMP, make sure that your creditors are promptly receiving your debt payments.
What if the credit counseling agency that handles your debts goes out of business?
If your credit counseling agency is going out of business, you need to act right away. Here are the steps you should do:
If you're in an automatic payment system, call your bank and stop your payments immediately.
Speak with your creditors and inform them about the situation. Tell your creditors that your credit counseling agency has shut down. Explain to your creditors that you are willing to continue with your current payment plan even without the aid of the agency.
Submit your payments directly to your creditors and make sure that you submit your payments on time.
Check your credit report. Make sure that all your payments have been properly submitted to your creditors while you were still enrolled in the DMP.
About The Author:
Andrea Smith is a writer and consultant with Consolidate4Free.com and has been providing consumers and business owners with Free Debt Consolidation Advice since 1990. For years she has helped people with loan and credit problems especially pertaining to Debt Consolidation and Credit Card Debt Consolidation.
When confronted with serious debt, people often run to credit counseling agencies for help. True, you can find reputable non-profit organizations or credit counseling services who offer genuine debt relief. However, Federal Trade Commission (FTC) warns consumers against fake credit counseling agencies who may take advantage of your bad debt situation.
Take note that being a “non-profit" credit counseling organization does not guarantee that it is legitimate. Some groups may claim to be non-profit yet may charge unreasonable fees and hidden costs for their services. If you're not aware of deceptive tactics that fake agencies use, you could be in trouble. For example, a false agency may force a client to enroll in a DMP or Debt Management Plan. Although, enrolling in a DMP is not bad, you need to make sure that you're dealing with a trusted credit counseling service.
What is a Debt Management Plan?
Under a Debt Management Program, you would be submitting monthly payments to the agency. In turn, your agency would be the one to distribute your payments to the corresponding creditors. This is usually done after a credit counseling agency has negotiated with your creditors.
The danger about this arrangement is that your credit counseling agency may not be submitting your payments to your creditors on time. Some fraudulent organizations have been found to use their clients' money instead of submitting them to the appropriate lenders. As a result, the borrower is stuck in debt with his creditors without his knowledge. If you have decided to enroll in a DMP, make sure that your creditors are promptly receiving your debt payments.
What if the credit counseling agency that handles your debts goes out of business?
If your credit counseling agency is going out of business, you need to act right away. Here are the steps you should do:
If you're in an automatic payment system, call your bank and stop your payments immediately.
Speak with your creditors and inform them about the situation. Tell your creditors that your credit counseling agency has shut down. Explain to your creditors that you are willing to continue with your current payment plan even without the aid of the agency.
Submit your payments directly to your creditors and make sure that you submit your payments on time.
Check your credit report. Make sure that all your payments have been properly submitted to your creditors while you were still enrolled in the DMP.
About The Author:
Andrea Smith is a writer and consultant with Consolidate4Free.com and has been providing consumers and business owners with Free Debt Consolidation Advice since 1990. For years she has helped people with loan and credit problems especially pertaining to Debt Consolidation and Credit Card Debt Consolidation.
Tuesday, February 24, 2009
Credit Card Consolidation: Research is the key.
By: Daniel Major
Everyone in this world deserves a second chance at help with their finances. You should really not consider bankruptcy until you look at some information about debt consolidation. Just make sure that you do some research before you pick one of the many companies to go with.
During research I have found many websites that offer an excellent choice of financial product to start dealing with this issue, many offer a great number of opportunities to settle your debt and reduce your interest rates to pay the debt off sooner and for much less money than you were originally expected to pay, in some instances they can get your interest rate down to next to nothing.
One of the great benefits of going with a debt consolidation company is that you can add up all of your credit card debt and not only pay off your debt sooner and for less money, but you can also put it all together so you will only have one monthly payment for all of the credit cards on the list.
If you go to their websites you can find out a lot of information on the type of credit card consolidation products they offer, they provide information on any subject pertaining to your particular situation and all are able to answer any questions that you could possibly have. They will also give you step by step instructions on helping you through this process.
Many people have a hard time trusting some of these places because of the bad media on them but as I have found out, not all companies are like this.
The credit card consolidation programs that many offer are very self explanatory and if you have any questions they will be only to happy to help you before you even make a decision on doing this or not. The whole point of this article is to let you know that if you do your research you can trust some of these places, not all of them are in it for themselves, and you can really get some real help if you do your homework.
However, that being said, before applying for consolidation there are some vital pieces of information that even your consolidation product supplier will not be able to tell you about. Information about methods of debt reduction that the financial institutions have known about for decades but would rather the general public did not know about simply because application of these methods would cost them millions in profit each year.
These methods when applied along with a credit consolidation product, have the potential to reduce your debt to zero after three years and in some cases less and can be used no matter what country or territory you live in. Many sites strongly advocate consolidation, but few know or understand these methods so, if you are in need of, or considering a credit card consolidation loan please find out about these methods first.
About The Author:
Daniel Major is a father of four who has recovered from debt.He was previously a director of a successful employment business and has since moved on to a new challenge.
Everyone in this world deserves a second chance at help with their finances. You should really not consider bankruptcy until you look at some information about debt consolidation. Just make sure that you do some research before you pick one of the many companies to go with.
During research I have found many websites that offer an excellent choice of financial product to start dealing with this issue, many offer a great number of opportunities to settle your debt and reduce your interest rates to pay the debt off sooner and for much less money than you were originally expected to pay, in some instances they can get your interest rate down to next to nothing.
One of the great benefits of going with a debt consolidation company is that you can add up all of your credit card debt and not only pay off your debt sooner and for less money, but you can also put it all together so you will only have one monthly payment for all of the credit cards on the list.
If you go to their websites you can find out a lot of information on the type of credit card consolidation products they offer, they provide information on any subject pertaining to your particular situation and all are able to answer any questions that you could possibly have. They will also give you step by step instructions on helping you through this process.
Many people have a hard time trusting some of these places because of the bad media on them but as I have found out, not all companies are like this.
The credit card consolidation programs that many offer are very self explanatory and if you have any questions they will be only to happy to help you before you even make a decision on doing this or not. The whole point of this article is to let you know that if you do your research you can trust some of these places, not all of them are in it for themselves, and you can really get some real help if you do your homework.
However, that being said, before applying for consolidation there are some vital pieces of information that even your consolidation product supplier will not be able to tell you about. Information about methods of debt reduction that the financial institutions have known about for decades but would rather the general public did not know about simply because application of these methods would cost them millions in profit each year.
These methods when applied along with a credit consolidation product, have the potential to reduce your debt to zero after three years and in some cases less and can be used no matter what country or territory you live in. Many sites strongly advocate consolidation, but few know or understand these methods so, if you are in need of, or considering a credit card consolidation loan please find out about these methods first.
About The Author:
Daniel Major is a father of four who has recovered from debt.He was previously a director of a successful employment business and has since moved on to a new challenge.
Winning Strategies For Tackling Student Loan Debt
By: Mike Philips
If you've recently finished school and are currently in your six-month grace period before you have to make your first student loan payment, you may have questions about the best way to tackle your debt. Yes, you can simply make monthly payments on your various loans, but with a little planning, you can save thousands of dollars, minimize your monthly payments, and improve your credit score in the process.
Currently the average undergraduate finishes school with over $16,000 in student loans. For many students, this hefty amount owed is piled onto existing debt such as car payments and credit card bills. So, if you feel overwhelmed with what you owe, you are not alone. Rest assured, however, you can tackle your debt successfully and effectively by taking a proactive approach.
First, remember that your student loan debt is probably at an interest rate much lower than your credit card debt. The highest interest rate on student loans compares favorably with the exorbitant rates issued by credit card companies. With rates as high as 30 percent, concentrating on paying down credit card debt should be a primary focus.
If you have no other liabilities other than student loans, congratulations! But, you'll still need to be strategic about how you will pay back what you owe. Most standard student loans have a ten-year payback period and a monthly payment schedule, but there are many more cost-effective options that are worth exploring.
Before you make that first payment, call your lenders and verify what the monthly amounts will be. If you simply cannot afford to make the payments, ask about alternative payment options. Most lenders offer graduated payment plans where monthly payments start about 50 percent below the standard amount and gradually increase over time. As well, you can frequently extend your repayment period up to 30 years. However, you will need to be careful about paying so little per month that you are only paying interest and no principal.
Another very effective way to decrease what you are paying each month is to do consolidate your loans by doing a student loan consolidation. This is a great option for borrowers who have several loans at different interest rates. By consolidating these loans, you can lock in a fixed interest rate, lower your payments, and extend your repayment period. Also, consolidation can be quite beneficial for improving your credit because existing loans will be paid off before a new loan is issued. You can ask your current lenders if they offer consolidation plans. If not, there are many lenders who can help you with your loans, and you are able to consolidate during your grace period. Make sure to ask about interest rate discounts that are usually offered for signing up for auto-pay and for having extended on-time payments. Most borrowers who consolidate their loans will save a substantial amount on their monthly payments, up to 60 percent each billing cycle. However, remember that the interest rate on consolidated student loans changes every year on July 1st. Thus, if you are considering consolidation, make sure to submit your application well before this date. Interest rates will be going up more than 2 percent this year, so don't delay.
If you are approaching the end of your grace period, and you are currently unemployed, disabled, or planning to return to school, you can defer payment on your loans for up to three years. The government will pay the interest on your subsidized loans during this time.
Like deferment, forbearance is another option to delay repayment for as long as three years. You can apply for forbearance by proving financial hardship to your lender. However unlike deferment, you will be responsible for accrued interest during the forbearance period.
No matter how you go about repaying student loan debt, by all means, do not default on these loans. There are serious consequences for not paying back what you have borrowed. Defaulted loans will appear negatively on your credit report, and this may prevent you from qualifying for other types of credit such as mortgages and car loans. As well, defaulted loans will be turned over to a collection agency, and you could possibly be sued. You may even have your wages garnished or your income tax refunds intercepted. And, of course, you will not be able to apply for additional student loans until you either repay the loans in full or make payment arrangements with the lender.
Yes, paying your loan payments is the best way to prevent defaulting on your student loans. Also, make sure to notify your lender with any changes that affect your loans such as name changes or new addresses and phone numbers. If you do experience financial difficulty, don't delay in asking for forbearance, deferment, or an alternative payment plan. Once you have defaulted, you won't be able to qualify for these options. And, don't forget to keep careful records of your loans. Save promissory notes, cancelled checks, and letters that you send to your lender.
Tackling your student loans is possible, and with a little financial know-how and advanced planning, you can customize a payment plan that will work with your financial status. So, go ahead and get started! The sooner you take control of your debt, the sooner you will pay it off.
About The Author:
Mike O'Brien offers advice and information about student loan consolidation. This is a quality web site with a choice of student loan consolidation advice and information at your fingertips!
If you've recently finished school and are currently in your six-month grace period before you have to make your first student loan payment, you may have questions about the best way to tackle your debt. Yes, you can simply make monthly payments on your various loans, but with a little planning, you can save thousands of dollars, minimize your monthly payments, and improve your credit score in the process.
Currently the average undergraduate finishes school with over $16,000 in student loans. For many students, this hefty amount owed is piled onto existing debt such as car payments and credit card bills. So, if you feel overwhelmed with what you owe, you are not alone. Rest assured, however, you can tackle your debt successfully and effectively by taking a proactive approach.
First, remember that your student loan debt is probably at an interest rate much lower than your credit card debt. The highest interest rate on student loans compares favorably with the exorbitant rates issued by credit card companies. With rates as high as 30 percent, concentrating on paying down credit card debt should be a primary focus.
If you have no other liabilities other than student loans, congratulations! But, you'll still need to be strategic about how you will pay back what you owe. Most standard student loans have a ten-year payback period and a monthly payment schedule, but there are many more cost-effective options that are worth exploring.
Before you make that first payment, call your lenders and verify what the monthly amounts will be. If you simply cannot afford to make the payments, ask about alternative payment options. Most lenders offer graduated payment plans where monthly payments start about 50 percent below the standard amount and gradually increase over time. As well, you can frequently extend your repayment period up to 30 years. However, you will need to be careful about paying so little per month that you are only paying interest and no principal.
Another very effective way to decrease what you are paying each month is to do consolidate your loans by doing a student loan consolidation. This is a great option for borrowers who have several loans at different interest rates. By consolidating these loans, you can lock in a fixed interest rate, lower your payments, and extend your repayment period. Also, consolidation can be quite beneficial for improving your credit because existing loans will be paid off before a new loan is issued. You can ask your current lenders if they offer consolidation plans. If not, there are many lenders who can help you with your loans, and you are able to consolidate during your grace period. Make sure to ask about interest rate discounts that are usually offered for signing up for auto-pay and for having extended on-time payments. Most borrowers who consolidate their loans will save a substantial amount on their monthly payments, up to 60 percent each billing cycle. However, remember that the interest rate on consolidated student loans changes every year on July 1st. Thus, if you are considering consolidation, make sure to submit your application well before this date. Interest rates will be going up more than 2 percent this year, so don't delay.
If you are approaching the end of your grace period, and you are currently unemployed, disabled, or planning to return to school, you can defer payment on your loans for up to three years. The government will pay the interest on your subsidized loans during this time.
Like deferment, forbearance is another option to delay repayment for as long as three years. You can apply for forbearance by proving financial hardship to your lender. However unlike deferment, you will be responsible for accrued interest during the forbearance period.
No matter how you go about repaying student loan debt, by all means, do not default on these loans. There are serious consequences for not paying back what you have borrowed. Defaulted loans will appear negatively on your credit report, and this may prevent you from qualifying for other types of credit such as mortgages and car loans. As well, defaulted loans will be turned over to a collection agency, and you could possibly be sued. You may even have your wages garnished or your income tax refunds intercepted. And, of course, you will not be able to apply for additional student loans until you either repay the loans in full or make payment arrangements with the lender.
Yes, paying your loan payments is the best way to prevent defaulting on your student loans. Also, make sure to notify your lender with any changes that affect your loans such as name changes or new addresses and phone numbers. If you do experience financial difficulty, don't delay in asking for forbearance, deferment, or an alternative payment plan. Once you have defaulted, you won't be able to qualify for these options. And, don't forget to keep careful records of your loans. Save promissory notes, cancelled checks, and letters that you send to your lender.
Tackling your student loans is possible, and with a little financial know-how and advanced planning, you can customize a payment plan that will work with your financial status. So, go ahead and get started! The sooner you take control of your debt, the sooner you will pay it off.
About The Author:
Mike O'Brien offers advice and information about student loan consolidation. This is a quality web site with a choice of student loan consolidation advice and information at your fingertips!
Monday, February 23, 2009
Credit Card Debt Arbitration
By: david roman
Across America today you’ll find a multitude of persons, families, and people in debt that cannot handle. The situations they find themselves in, because of debt, are impossible ones that they cannot get out of on their own. You probably at least know someone in a situation such as this. It’s not an uncommon thing anymore, and more people find themselves in unmanageable debt every day. On a good note, programs like debt settlement, credit card debt arbitration, and debt negotiation can help whoever finds themselves in such a situation. Settling your debt in a debt arbitration program involves a debtor and creditor agreeing on reduced balance that counts as the payment in full. This can go towards a variety of debts – from utility bills, medical bills, liens, judgments, invoices and even lawsuits or any other type of significant debt. They agree how much you can pay off and in how much time you’ll have to pay it off, and whatever you can’t make in time the debt settlement company will pick up – having you pay that back to them in the future when possible.
What makes debt arbitration different from credit debt counseling services is that debt arbitration work on behalf of you, the client, while credit counseling works on behalf of the credit card company. This means that debt settlement programs are trying to help you – rather than getting as much money as they can from you with crazy interest rates and ridiculous payment dates. They really do want to help you pay off your debt and eventually debt free.
Debt arbitration takes place in what’s called debt negotiation. What this means is that credit card companies and debt settlers negotiate over a sum of money that you can pay rather than the whole amount of money you owe. So you’ll end up paying most of what you owe, over payments that you can afford and make on time. It makes it really possible to pay off your debts on your own terms and conditions. When you’ve paid off the majority of what you owe to the credit card company – the rest of the debt that was picked up by the debt settlers will be under your responsibility to pay off. This means, in simple terms, that you do ending up paying back all of what you owe. But the process of debt settling and debt arbitration makes it affordable and possible for you. They don’t go after you like the credit card companies – they actually care about you making your payments and becoming debt free. It doesn’t matter if you have an insurmountable heap of credit card debt, or you bought a car and spent all of your savings, or if you have courtroom and lawyer fees that you can’t handle. The best course of action and option that you have is to go to a debt settler (or at least a credit counselor) and face your debt. The feeling of being debt free is miles better than under debt, in any case.
Across America today you’ll find a multitude of persons, families, and people in debt that cannot handle. The situations they find themselves in, because of debt, are impossible ones that they cannot get out of on their own. You probably at least know someone in a situation such as this. It’s not an uncommon thing anymore, and more people find themselves in unmanageable debt every day. On a good note, programs like debt settlement, credit card debt arbitration, and debt negotiation can help whoever finds themselves in such a situation. Settling your debt in a debt arbitration program involves a debtor and creditor agreeing on reduced balance that counts as the payment in full. This can go towards a variety of debts – from utility bills, medical bills, liens, judgments, invoices and even lawsuits or any other type of significant debt. They agree how much you can pay off and in how much time you’ll have to pay it off, and whatever you can’t make in time the debt settlement company will pick up – having you pay that back to them in the future when possible.
What makes debt arbitration different from credit debt counseling services is that debt arbitration work on behalf of you, the client, while credit counseling works on behalf of the credit card company. This means that debt settlement programs are trying to help you – rather than getting as much money as they can from you with crazy interest rates and ridiculous payment dates. They really do want to help you pay off your debt and eventually debt free.
Debt arbitration takes place in what’s called debt negotiation. What this means is that credit card companies and debt settlers negotiate over a sum of money that you can pay rather than the whole amount of money you owe. So you’ll end up paying most of what you owe, over payments that you can afford and make on time. It makes it really possible to pay off your debts on your own terms and conditions. When you’ve paid off the majority of what you owe to the credit card company – the rest of the debt that was picked up by the debt settlers will be under your responsibility to pay off. This means, in simple terms, that you do ending up paying back all of what you owe. But the process of debt settling and debt arbitration makes it affordable and possible for you. They don’t go after you like the credit card companies – they actually care about you making your payments and becoming debt free. It doesn’t matter if you have an insurmountable heap of credit card debt, or you bought a car and spent all of your savings, or if you have courtroom and lawyer fees that you can’t handle. The best course of action and option that you have is to go to a debt settler (or at least a credit counselor) and face your debt. The feeling of being debt free is miles better than under debt, in any case.
Tips on Getting Out of Debt after the Holidays.
By: Penny-Ann Lupton
We all do it at least once, we say we're going to stay on budget this Christmas and then we blow the budget and put everything on our credit cards. This isn't unusual, people all over the country have done it and it's not only our faults.
Retailers make it much easier to get approved for credit cards, in fact, how many of us have gone into a store and been offered a discount on a purchase if we apply for a credit card. Not only do they provide easy access to credit cards and encourage us to use them, but also they advertise very expensive toys and electronics all over the television. Remember when you were young, the cost of the average toy for Christmas was around $30- $40, well those days are over. Kids now a day are asking for cell phones, iPods, video game systems and many more gifts where the average price is from $200-$500.
There are a few options available to you if you want to get out of debt. The first option is good if you only have a small amount of debt on a few credit cards, you can consolidate your debt into a credit line. By taking all of your high interest credit cards and putting them onto an unsecured line of credit, you will pay a much lower interest rate, which will allow you to pay off the debt faster. The trick to option one is to make sure that you cut up the credit cards you consolidated so that you are not tempted to use them again.
If you have amassed more than just a little debt, another option if you are a homeowner is to consolidate your debt into a secured line of credit or a home equity loan. What this means is the bank will allow you to borrow against the equity in your home at an even lower rate. You will save even more money on interest and you can pay down this debt a lot faster, but again make sure to close the accounts of the credit cards you consolidate so you are not tempted to use them.
There is another option available to homeowners but it is strongly recommended that you speak to a mortgage specialist first. This option is a refinance of your current mortgage. This option is not always the best thing for everyone but for some people it can allow you to incorporate all of your debt into your mortgage so you only have one payment every month. If this is something that you are considering it could save you thousands of dollars, and if you follow a good plan after you refinance you could pay down your mortgage even faster. Again I stress, make sure you eliminate the credit cards you are consolidating and you speak to a specialist who can analyze your particular situation and help you to decide whether or not this is in your best interest.
Consolidating the debt will help you to get out of debt much faster and much cheaper. This is not the only solution because you want to make sure you don't get into debt next year, and the only way to do that is to make a good budget. Make sure you write up a good budget and stick to it every month, write down all of your cash spending so you can keep track of it.
In addition, a good way to make sure you don't get into debt next Christmas is to add up all of the receipts for your Christmas shopping this year , this will give you an accurate amount of what you spend on Christmas not just what you hope to spend. If you take that amount and divide it by twelve, it will give you a monthly amount you can add to your budget. It 's much easier to add a small amount every month to your budget than put it on credit cards and try to pay it off later. Putting away a monthly Christmas budget into a separate savings account every month will allow you to buy all of the gifts you want and do it without getting back into debt.
About The Author:
Penny-Ann Lupton is a registered mortgage specialist working with Mortgage Alliance, she is dedicated to always finding her clients the best rates available! Quick Mortgage Approvals.ca is a website designed to help people find the mortgage products in their best interest. Mortgage Alliance has access to over 50 lenders and the best part is there is no fee for this service!
We all do it at least once, we say we're going to stay on budget this Christmas and then we blow the budget and put everything on our credit cards. This isn't unusual, people all over the country have done it and it's not only our faults.
Retailers make it much easier to get approved for credit cards, in fact, how many of us have gone into a store and been offered a discount on a purchase if we apply for a credit card. Not only do they provide easy access to credit cards and encourage us to use them, but also they advertise very expensive toys and electronics all over the television. Remember when you were young, the cost of the average toy for Christmas was around $30- $40, well those days are over. Kids now a day are asking for cell phones, iPods, video game systems and many more gifts where the average price is from $200-$500.
There are a few options available to you if you want to get out of debt. The first option is good if you only have a small amount of debt on a few credit cards, you can consolidate your debt into a credit line. By taking all of your high interest credit cards and putting them onto an unsecured line of credit, you will pay a much lower interest rate, which will allow you to pay off the debt faster. The trick to option one is to make sure that you cut up the credit cards you consolidated so that you are not tempted to use them again.
If you have amassed more than just a little debt, another option if you are a homeowner is to consolidate your debt into a secured line of credit or a home equity loan. What this means is the bank will allow you to borrow against the equity in your home at an even lower rate. You will save even more money on interest and you can pay down this debt a lot faster, but again make sure to close the accounts of the credit cards you consolidate so you are not tempted to use them.
There is another option available to homeowners but it is strongly recommended that you speak to a mortgage specialist first. This option is a refinance of your current mortgage. This option is not always the best thing for everyone but for some people it can allow you to incorporate all of your debt into your mortgage so you only have one payment every month. If this is something that you are considering it could save you thousands of dollars, and if you follow a good plan after you refinance you could pay down your mortgage even faster. Again I stress, make sure you eliminate the credit cards you are consolidating and you speak to a specialist who can analyze your particular situation and help you to decide whether or not this is in your best interest.
Consolidating the debt will help you to get out of debt much faster and much cheaper. This is not the only solution because you want to make sure you don't get into debt next year, and the only way to do that is to make a good budget. Make sure you write up a good budget and stick to it every month, write down all of your cash spending so you can keep track of it.
In addition, a good way to make sure you don't get into debt next Christmas is to add up all of the receipts for your Christmas shopping this year , this will give you an accurate amount of what you spend on Christmas not just what you hope to spend. If you take that amount and divide it by twelve, it will give you a monthly amount you can add to your budget. It 's much easier to add a small amount every month to your budget than put it on credit cards and try to pay it off later. Putting away a monthly Christmas budget into a separate savings account every month will allow you to buy all of the gifts you want and do it without getting back into debt.
About The Author:
Penny-Ann Lupton is a registered mortgage specialist working with Mortgage Alliance, she is dedicated to always finding her clients the best rates available! Quick Mortgage Approvals.ca is a website designed to help people find the mortgage products in their best interest. Mortgage Alliance has access to over 50 lenders and the best part is there is no fee for this service!
Sunday, February 22, 2009
Cash Out Mortgage Refinance: Equity in Your Hand
By: AndrewMcAllister
Equity is the key to obtaining a Cash Out Mortgage Refinance loan that can lower the mortgage interest and put a cash advance in your hands. The cash advance is the extra funds left after paying off the high interest mortgage that is included in the new Cash Out Loan.
When you take on a cash out refinance, you pay off the original mortgage and at the same time receive a check for the balance over and above what you owed on the remaining balance. You can then use the money for home improvement, to pay off other debts or even go on a vacation.
Home equity is necessary to obtain Cash Out mortgage loans. Customers with poor credit scores and low equity cannot qualify for Cash Out refinancing plans offered through a majority of banks or lenders. Collateral is the key and equity is the key collateral anticipated to qualify.
The money received from the refinance may be used as needed. Consumers are not expected to provide details of expenditures. This includes refinance lenders. The borrower determines use of the funds. The money receive is included in the total amount of the new loan and will be paid as part of regular payments on the loan. No explanation is needed regarding how a borrower decides to use the funds.
The borrower can pay off high interest or outstanding debts that can impact obtaining a good credit rating using the money from cash out refinancing. Remodeling your kitchen, paying off student loans or financing for your children's education is additional suggestions for use of funds. The additional funds are an opportunity to lower interest rates on other debts as part of the refinancing process.
If you choose to use the money for home improvement, you may benefit by creating additional tax deductions. Since tax laws are changing every year, it is strongly recommended that you talk to an experienced tax attorney for the most current information about what it and is not a deductible expense.
If you are a homeowner with a decent amount of equity in your home and you are already considering the potential of a refinance to take advantage of lower interest rates, then why not go ahead and see what a cash out mortgage refinance can do for you? Let's face the facts here. I can't think of many people who couldn't find a good use for a little extra money now and then, especially if they have high interest credit cards with high balances or other high interest debt.
So do a little research. Talk to friends, coworkers and family members who have refinanced their mortgages and listen carefully to what they have to recommend.
Equity is the key to obtaining a Cash Out Mortgage Refinance loan that can lower the mortgage interest and put a cash advance in your hands. The cash advance is the extra funds left after paying off the high interest mortgage that is included in the new Cash Out Loan.
When you take on a cash out refinance, you pay off the original mortgage and at the same time receive a check for the balance over and above what you owed on the remaining balance. You can then use the money for home improvement, to pay off other debts or even go on a vacation.
Home equity is necessary to obtain Cash Out mortgage loans. Customers with poor credit scores and low equity cannot qualify for Cash Out refinancing plans offered through a majority of banks or lenders. Collateral is the key and equity is the key collateral anticipated to qualify.
The money received from the refinance may be used as needed. Consumers are not expected to provide details of expenditures. This includes refinance lenders. The borrower determines use of the funds. The money receive is included in the total amount of the new loan and will be paid as part of regular payments on the loan. No explanation is needed regarding how a borrower decides to use the funds.
The borrower can pay off high interest or outstanding debts that can impact obtaining a good credit rating using the money from cash out refinancing. Remodeling your kitchen, paying off student loans or financing for your children's education is additional suggestions for use of funds. The additional funds are an opportunity to lower interest rates on other debts as part of the refinancing process.
If you choose to use the money for home improvement, you may benefit by creating additional tax deductions. Since tax laws are changing every year, it is strongly recommended that you talk to an experienced tax attorney for the most current information about what it and is not a deductible expense.
If you are a homeowner with a decent amount of equity in your home and you are already considering the potential of a refinance to take advantage of lower interest rates, then why not go ahead and see what a cash out mortgage refinance can do for you? Let's face the facts here. I can't think of many people who couldn't find a good use for a little extra money now and then, especially if they have high interest credit cards with high balances or other high interest debt.
So do a little research. Talk to friends, coworkers and family members who have refinanced their mortgages and listen carefully to what they have to recommend.
Steps to Take Control of Debt Collection
By: franchises
There are reasons to why there are guidelines made for almost every imaginable method, event, experience, and every little thing that we encounter. There are steps formulated for each task to ensure success and minimize failure. Unfortunately, more often than not, we turn to these guidelines after we have committed mistakes. It is when we need help to get us out in the rut that we take the time to consult and study the ways and means that should have saved us the trouble to begin with. Getting you out of debt collection is no different. It is no hopeless case, and we have the steps you will need to take control! These are the three steps to free you of your debt collection problems: First Step: Communicate. You cannot run from your problems. The more you run away and hide, the more that it will come back haunting you. The solution is to deal with it. In this case, talk to the people or the companies involved. If you need financial assistance and would need to negotiate for a lower amount to pay then do so. The only way to get you out of this debt is to study your options and make sure that you are able to communicate your paying scheme to your creditor(s) and your debt settlement company (if you have one). Moreover, the sooner you make known to them your intention to pay, the sooner they will get off your case. Second Step: Keep updates of your credit standing. Know what you are getting yourself into. For you to carry out your plans of paying your debt, you have to know exactly how much you are paying for and for how long. Stay focused and keep track of the changes in your credit records. Third Step: Put your negotiating skills to good use. If you have a debt settlement company to do this, then it will not be much of a problem. However, if you can negotiate with your creditors without any third party involved then go ahead and do so. Ask them for a lowered APR, which will enable you to pay the debt easier. Also, ask for an extension on the timeframe of paying your debt if there is a need to. Bear in mind, creditors will be willing to do settlements because they would rather get paid than have you file for bankruptcy. Accomplishing these steps will soon free you from the chains that bind you to your debt(s). Always bear in mind that you are negotiating for your own good, so pursue your rights, be in the know.
There are reasons to why there are guidelines made for almost every imaginable method, event, experience, and every little thing that we encounter. There are steps formulated for each task to ensure success and minimize failure. Unfortunately, more often than not, we turn to these guidelines after we have committed mistakes. It is when we need help to get us out in the rut that we take the time to consult and study the ways and means that should have saved us the trouble to begin with. Getting you out of debt collection is no different. It is no hopeless case, and we have the steps you will need to take control! These are the three steps to free you of your debt collection problems: First Step: Communicate. You cannot run from your problems. The more you run away and hide, the more that it will come back haunting you. The solution is to deal with it. In this case, talk to the people or the companies involved. If you need financial assistance and would need to negotiate for a lower amount to pay then do so. The only way to get you out of this debt is to study your options and make sure that you are able to communicate your paying scheme to your creditor(s) and your debt settlement company (if you have one). Moreover, the sooner you make known to them your intention to pay, the sooner they will get off your case. Second Step: Keep updates of your credit standing. Know what you are getting yourself into. For you to carry out your plans of paying your debt, you have to know exactly how much you are paying for and for how long. Stay focused and keep track of the changes in your credit records. Third Step: Put your negotiating skills to good use. If you have a debt settlement company to do this, then it will not be much of a problem. However, if you can negotiate with your creditors without any third party involved then go ahead and do so. Ask them for a lowered APR, which will enable you to pay the debt easier. Also, ask for an extension on the timeframe of paying your debt if there is a need to. Bear in mind, creditors will be willing to do settlements because they would rather get paid than have you file for bankruptcy. Accomplishing these steps will soon free you from the chains that bind you to your debt(s). Always bear in mind that you are negotiating for your own good, so pursue your rights, be in the know.
Saturday, February 21, 2009
How Debt Collection Agents Operate
By: franchises
When all in house efforts fail to recover a debt, they are handed over to a debt recovery agent or collection agent. This article discusses how the latter functions and recovers bad debts. Debt recovery agents usually contact the defaulting individual or company through letters initially followed by phone calls. They may use automated telephone systems that keep track of the calls or computers with software that periodically dispatches reminders to the debtor. If the debt is small, phone calls may be too expensive and only letters may be sent. If all the normal mode of debt collection fails to yield any result, the collection agency may resort to legal recourse and approach a court to settle the dispute. Debt recovery agents have reputation of using intimidation and harassment to recover bad debts in the past. But with the passing of Fair Debt Collection Practices Act in the U.S., debt recovery is done in a more humane manner. This act prescribes that the debtors must be treated in a fair way and that they should not be threatened or bullied. Also debt recovery agents have realized that it is better to work with the debtors and discuss means of repaying the loan with payment plans and other options which has greater chances of success than coercion. When all means of persuasion have failed, debt recovery agents can be approached for debts that are overdue by at least a month. The pros and cons of handing over the case have to be thoroughly analyzed depending on each individual case. But once it has been determined that there is no way out, the bad account should be handed over to debt recovery agent at the earliest as the chances of recovery is more when the overdue period is less. Once handed over, the debt recovery agent handles all the correspondence and details of settlement of the account. Some pointers to a debt going bad and when it is time to hand it over to a debt recovery agent are listed below: - The payment terms are not adhered to by the customer like frequent postponement or delayed payment on frivolous grounds - The customer fails to answer reminders through phone calls and / or in writing or secretly changes the contact telephone no and/or address - The customer denies owing any money in spite of written records - Baseless complaints are made by the customer repeatedly regarding the quality of product or service whenever asked for payment
When all in house efforts fail to recover a debt, they are handed over to a debt recovery agent or collection agent. This article discusses how the latter functions and recovers bad debts. Debt recovery agents usually contact the defaulting individual or company through letters initially followed by phone calls. They may use automated telephone systems that keep track of the calls or computers with software that periodically dispatches reminders to the debtor. If the debt is small, phone calls may be too expensive and only letters may be sent. If all the normal mode of debt collection fails to yield any result, the collection agency may resort to legal recourse and approach a court to settle the dispute. Debt recovery agents have reputation of using intimidation and harassment to recover bad debts in the past. But with the passing of Fair Debt Collection Practices Act in the U.S., debt recovery is done in a more humane manner. This act prescribes that the debtors must be treated in a fair way and that they should not be threatened or bullied. Also debt recovery agents have realized that it is better to work with the debtors and discuss means of repaying the loan with payment plans and other options which has greater chances of success than coercion. When all means of persuasion have failed, debt recovery agents can be approached for debts that are overdue by at least a month. The pros and cons of handing over the case have to be thoroughly analyzed depending on each individual case. But once it has been determined that there is no way out, the bad account should be handed over to debt recovery agent at the earliest as the chances of recovery is more when the overdue period is less. Once handed over, the debt recovery agent handles all the correspondence and details of settlement of the account. Some pointers to a debt going bad and when it is time to hand it over to a debt recovery agent are listed below: - The payment terms are not adhered to by the customer like frequent postponement or delayed payment on frivolous grounds - The customer fails to answer reminders through phone calls and / or in writing or secretly changes the contact telephone no and/or address - The customer denies owing any money in spite of written records - Baseless complaints are made by the customer repeatedly regarding the quality of product or service whenever asked for payment
What You Need to Know About Debt Collection Agencies
By: franchises
Every service has its cost, and the tag price attached to debt recovery is determined by debt recovery agents. While it is obvious that a debt gone bad is not a good thing, spending more money for its recovery is not a trifle matter either. It is best to know the fees involved beforehand so be informed by reading on. There are two pricing methods adopted by debt recovery agents. They are as follows: 1. Contingency pricing: This method is dependent on the amount of debt to be recovered and involves a certain percentage (varying from 10 to 50 percent) of the said debt. 2. Fixed pricing: This refers to a fixed amount regardless of the amount of the debt. Contingency pricing compared to fixed pricing is a more difficult approach to understand between the two. The former relies on several factors such as previously mentioned, the amount of debt to be recovered. Moreover, contingency pricing is also affected by the duration that the debt has been overdue. Those debts that have been overdue for a lesser duration attract a higher fee while the so-called older debts are given a cheaper rate. This simply entails that chances of debt recovery is inversely proportional to the age or time overdue of the debt in question. If volume of orders or cases is a topic of consideration for pricing, then the agent will usually adjust the pricing scheme accordingly. The contingency pricing method is often used by agents in individual cases of debt recovery. On the other hand, if an individual or a company has several debt recovery cases to be handled by the agents, a fixed pricing is often applied. To better illustrate this concept, relate the act of buying on wholesale to the fixed pricing method - the more the merrier! Since there are several cases to be handled on an annual basis, it becomes convenient for both parties to settle for a fixed rate. In this case, this benefit of having a fixed price per project is again dependent on the quantity of debt recovery cases to be handled by the said agent. Lastly, take into consideration the rate of recovery of your agent before making your decision. The rate of recovery simply denotes the average percentage that the agent is able to retrieve of the debt cases handled by him/her. A higher percentage of rate recovery will translate to higher returns for you as compared to a low rate recovery.
Every service has its cost, and the tag price attached to debt recovery is determined by debt recovery agents. While it is obvious that a debt gone bad is not a good thing, spending more money for its recovery is not a trifle matter either. It is best to know the fees involved beforehand so be informed by reading on. There are two pricing methods adopted by debt recovery agents. They are as follows: 1. Contingency pricing: This method is dependent on the amount of debt to be recovered and involves a certain percentage (varying from 10 to 50 percent) of the said debt. 2. Fixed pricing: This refers to a fixed amount regardless of the amount of the debt. Contingency pricing compared to fixed pricing is a more difficult approach to understand between the two. The former relies on several factors such as previously mentioned, the amount of debt to be recovered. Moreover, contingency pricing is also affected by the duration that the debt has been overdue. Those debts that have been overdue for a lesser duration attract a higher fee while the so-called older debts are given a cheaper rate. This simply entails that chances of debt recovery is inversely proportional to the age or time overdue of the debt in question. If volume of orders or cases is a topic of consideration for pricing, then the agent will usually adjust the pricing scheme accordingly. The contingency pricing method is often used by agents in individual cases of debt recovery. On the other hand, if an individual or a company has several debt recovery cases to be handled by the agents, a fixed pricing is often applied. To better illustrate this concept, relate the act of buying on wholesale to the fixed pricing method - the more the merrier! Since there are several cases to be handled on an annual basis, it becomes convenient for both parties to settle for a fixed rate. In this case, this benefit of having a fixed price per project is again dependent on the quantity of debt recovery cases to be handled by the said agent. Lastly, take into consideration the rate of recovery of your agent before making your decision. The rate of recovery simply denotes the average percentage that the agent is able to retrieve of the debt cases handled by him/her. A higher percentage of rate recovery will translate to higher returns for you as compared to a low rate recovery.
Friday, February 20, 2009
Credit Card Debts And How To Cope With Them
By: Joe268
Credit cards may be convenient since it gives you the luxury to spend more than what you can actually afford, but they can also land you in serious financial problems if not used properly. The use of credit cards in America is increasing by the day, and unfortunately, many are struggling with debt caused due to over spending. As a responsible credit card user you must try to lead a financially sound life, and you can begin by getting rid of your credit card debts. Never overextend the use of your credit card, as that will land you in a debt with high interest. Getting into credit card debt is very easy, but it may be very difficult to come out of it. Therefore, it is better to be cautious from the beginning, rather than finding yourself in a financial quandary. Stop overspending It is never too late to pull yourself out of the debt you are buried in it. The most important step is to curb your temptation to overspend. Try to limit your expenses as far as possible by keeping one or two credit cards at the most. More cards will mean more balance to pay off. This will quickly put you in a cycle of debt. Do not use your credit card to buy a lifestyle that is unaffordable for you; instead, use cash to make your purchases. If you want to buy something that you cannot afford, then you need to save money until you collect the required amount. In case of an emergency, you will have to use your credit card, of course, but make a strategy for payment of the balance before using the credit card. To do this, you need to make a budget and see that you use your credit card according to the budget. If you find your expenditure going out of budget, then it is advisable to stop using the credit card. Cover your balance Making minimum payments for your credit card bills each month may seem to be convenient, but the truth is that you are pulling yourself into a never-ending debt trap. When you use your credit card try and make full payment for the balance that is created, keeping a check on its use until you actually pay off the balance. So pay the whole amount and that too on time in order to avoid late fees. If you maintain a good credit record you may even get certain considerations from your card issuer. Avoid special services: As a credit card holder you may get tempted to get hold of various special services like travel clubs and life insurance offered by your credit card company, but be advised not to get into this trap, because even though they may seem alluring they are just added expense for you and add to your debt-burden. Never use your credit card to pay your loan or advance, because if you are unable to pay off the balance, it will become a high interest loan for you. So you should use your ATM card or go to the bank. In order to make the most of your credit card you must learn to use it wisely. Remember that staying out of debt is not difficult. All you need to do is to keep a check on how and when you use your credit card.
Credit cards may be convenient since it gives you the luxury to spend more than what you can actually afford, but they can also land you in serious financial problems if not used properly. The use of credit cards in America is increasing by the day, and unfortunately, many are struggling with debt caused due to over spending. As a responsible credit card user you must try to lead a financially sound life, and you can begin by getting rid of your credit card debts. Never overextend the use of your credit card, as that will land you in a debt with high interest. Getting into credit card debt is very easy, but it may be very difficult to come out of it. Therefore, it is better to be cautious from the beginning, rather than finding yourself in a financial quandary. Stop overspending It is never too late to pull yourself out of the debt you are buried in it. The most important step is to curb your temptation to overspend. Try to limit your expenses as far as possible by keeping one or two credit cards at the most. More cards will mean more balance to pay off. This will quickly put you in a cycle of debt. Do not use your credit card to buy a lifestyle that is unaffordable for you; instead, use cash to make your purchases. If you want to buy something that you cannot afford, then you need to save money until you collect the required amount. In case of an emergency, you will have to use your credit card, of course, but make a strategy for payment of the balance before using the credit card. To do this, you need to make a budget and see that you use your credit card according to the budget. If you find your expenditure going out of budget, then it is advisable to stop using the credit card. Cover your balance Making minimum payments for your credit card bills each month may seem to be convenient, but the truth is that you are pulling yourself into a never-ending debt trap. When you use your credit card try and make full payment for the balance that is created, keeping a check on its use until you actually pay off the balance. So pay the whole amount and that too on time in order to avoid late fees. If you maintain a good credit record you may even get certain considerations from your card issuer. Avoid special services: As a credit card holder you may get tempted to get hold of various special services like travel clubs and life insurance offered by your credit card company, but be advised not to get into this trap, because even though they may seem alluring they are just added expense for you and add to your debt-burden. Never use your credit card to pay your loan or advance, because if you are unable to pay off the balance, it will become a high interest loan for you. So you should use your ATM card or go to the bank. In order to make the most of your credit card you must learn to use it wisely. Remember that staying out of debt is not difficult. All you need to do is to keep a check on how and when you use your credit card.
The Pros And Cons Of Debt Consolidation Loans
By: Joe268
Financial issues are the greatest concern in any average household. More than 40% American families spend more than what they earn. An average American household has a credit card debt of approximately 10,000 dollars. What is Debt consolidation? Proper money management with debt consolidation is the most practical solution to your debt problems. These loans can help you maintain sound financial health. It is the most preferred alternative to declaring bankruptcy. It enables you to rebuild your credit rating and make payments without having creditors breathe down your neck or paying high interest rates. Nearly all consolidation loans are given in the form of home equity loans. Once you pay your debt, all your payments are consolidated into one monthly payment to the lender, at a lower interest rate. Borrowing more money to pay your bills will not help you to get rid of your debts but a low interest rate will surely help you to pay your bills faster. Pros of debt consolidation loan: - A debt consolidation loan will combine all your payments into one payment. According to the statistics, an average American citizen pays 11 different creditors, monthly. Making a single payment will help you in figuring out how much and when you need to pay. You will be able to manage your finances easily. - Home equity loan, also called a second mortgage, is the most common type of consolidation loan. The interest rate of this loan is lower in comparison to other consumer interest rates. Since the interest rates are lower, the amount you pay per month will decrease gradually. - You need to deal with only one creditor. If you have any financial issues, you need to call or visit one creditor, instead of several. This will help you to save on time and energy. - The interest that you would pay on a mortgage or a home equity loan could be used to reduce your taxes. - A loan helps to improve your credit rating. Although the idea of getting a debt consolidation loan may sound great, it is important to understand the cons involved. Cons of debt consolidation loan: - You need to qualify for a loan or mortgage. - They are secured debt. A secured debt enables the lender to take away whatever was secured for the loan, if you fail to pay back. - You may end up spending more than what you would have, if you kept to the individual loans. This is due to the fact that the interest rates of these loans are comparatively low. - It helps to make your payments easier and this may make you resume your old spending habits and the use of credit cards all over again. It is important to take a realistic look at all the possible pros and cons before applying for a loan. Debt consolidation loan ads come across as solutions to come out of your present financial problems, but it is advisable to take time and decide whether it will work to your interest.
Financial issues are the greatest concern in any average household. More than 40% American families spend more than what they earn. An average American household has a credit card debt of approximately 10,000 dollars. What is Debt consolidation? Proper money management with debt consolidation is the most practical solution to your debt problems. These loans can help you maintain sound financial health. It is the most preferred alternative to declaring bankruptcy. It enables you to rebuild your credit rating and make payments without having creditors breathe down your neck or paying high interest rates. Nearly all consolidation loans are given in the form of home equity loans. Once you pay your debt, all your payments are consolidated into one monthly payment to the lender, at a lower interest rate. Borrowing more money to pay your bills will not help you to get rid of your debts but a low interest rate will surely help you to pay your bills faster. Pros of debt consolidation loan: - A debt consolidation loan will combine all your payments into one payment. According to the statistics, an average American citizen pays 11 different creditors, monthly. Making a single payment will help you in figuring out how much and when you need to pay. You will be able to manage your finances easily. - Home equity loan, also called a second mortgage, is the most common type of consolidation loan. The interest rate of this loan is lower in comparison to other consumer interest rates. Since the interest rates are lower, the amount you pay per month will decrease gradually. - You need to deal with only one creditor. If you have any financial issues, you need to call or visit one creditor, instead of several. This will help you to save on time and energy. - The interest that you would pay on a mortgage or a home equity loan could be used to reduce your taxes. - A loan helps to improve your credit rating. Although the idea of getting a debt consolidation loan may sound great, it is important to understand the cons involved. Cons of debt consolidation loan: - You need to qualify for a loan or mortgage. - They are secured debt. A secured debt enables the lender to take away whatever was secured for the loan, if you fail to pay back. - You may end up spending more than what you would have, if you kept to the individual loans. This is due to the fact that the interest rates of these loans are comparatively low. - It helps to make your payments easier and this may make you resume your old spending habits and the use of credit cards all over again. It is important to take a realistic look at all the possible pros and cons before applying for a loan. Debt consolidation loan ads come across as solutions to come out of your present financial problems, but it is advisable to take time and decide whether it will work to your interest.
Thursday, February 19, 2009
How Much Do You Need for Retirement
By: Joe268
With an increasing number of people scheduled to begin retirement in the next few years, it is important to begin thinking about the subject. Even if you’re not near the age of retirement yet, it’s a good idea to begin thinking about how you plan to fund your retirement as soon as possible. The sooner you begin to plan for retirement the more you can be sure your retirement won’t be plagued by money issues. So, how much money do you need for retirement? A lot of that answer, of course, depends on what plans you have for retirement. If you plan to travel, want to purchase a RV or you have similar specific plans, you will naturally need more money in order to fund your retirement. Above and beyond those expenses; however, it is important to think about your day to day essential needs. For example, consider whether you will still owe any debt payments when you choose to retire. Of course, many of use would like to think that we’ll be out of debt by then but in reality you may still owe on a vehicle or credit card or even a house. Be sure to calculate those costs into the amount you need for retirement. You’ll also need enough money to cover such costs as utilities, auto and home insurance, groceries and other miscellaneous expenses we all must pay on a month to month basis. Healthcare will be an extremely important aspect of your retirement. Naturally, as we grow older our healthcare needs increase and that means spending more money. If you fail to fund your retirement in a sufficient manner, even one serious health problem could wipe out your retirement fund and you might find yourself facing the rest of your retirement with serious money problems. Just for your healthcare costs alone it’s a good idea to plan on budgeting at least $15,000 per year for every year of your retirement. You also need to consider whether there will be expenses when you first retire that you’ll still need to cover such as support for aging parents (with life expectancy figures today, it’s definitely a possibility) as well as college education expenses for kids. In addition, don’t forget miscellaneous costs which may pop up that we tend to forget. These costs include home repair costs, such as replacing a roof, purchasing another vehicle, etc. After adding up all of the costs you’ll need to cover during retirement, don’t forget to take into consideration the effects of inflation. Figure on costs today rising an average of about 4% a year for every year you have left until retirement and then some. Finally, don’t forget to give serious thought to how long you may need to fund your retirement. Quite surprisingly, many people tend to underestimate how long they’ll live and as a result run out of money. Don’t let that happen to you. The best rule of thumb is to assume you’ll live to at least age 90 and calculate for that.
With an increasing number of people scheduled to begin retirement in the next few years, it is important to begin thinking about the subject. Even if you’re not near the age of retirement yet, it’s a good idea to begin thinking about how you plan to fund your retirement as soon as possible. The sooner you begin to plan for retirement the more you can be sure your retirement won’t be plagued by money issues. So, how much money do you need for retirement? A lot of that answer, of course, depends on what plans you have for retirement. If you plan to travel, want to purchase a RV or you have similar specific plans, you will naturally need more money in order to fund your retirement. Above and beyond those expenses; however, it is important to think about your day to day essential needs. For example, consider whether you will still owe any debt payments when you choose to retire. Of course, many of use would like to think that we’ll be out of debt by then but in reality you may still owe on a vehicle or credit card or even a house. Be sure to calculate those costs into the amount you need for retirement. You’ll also need enough money to cover such costs as utilities, auto and home insurance, groceries and other miscellaneous expenses we all must pay on a month to month basis. Healthcare will be an extremely important aspect of your retirement. Naturally, as we grow older our healthcare needs increase and that means spending more money. If you fail to fund your retirement in a sufficient manner, even one serious health problem could wipe out your retirement fund and you might find yourself facing the rest of your retirement with serious money problems. Just for your healthcare costs alone it’s a good idea to plan on budgeting at least $15,000 per year for every year of your retirement. You also need to consider whether there will be expenses when you first retire that you’ll still need to cover such as support for aging parents (with life expectancy figures today, it’s definitely a possibility) as well as college education expenses for kids. In addition, don’t forget miscellaneous costs which may pop up that we tend to forget. These costs include home repair costs, such as replacing a roof, purchasing another vehicle, etc. After adding up all of the costs you’ll need to cover during retirement, don’t forget to take into consideration the effects of inflation. Figure on costs today rising an average of about 4% a year for every year you have left until retirement and then some. Finally, don’t forget to give serious thought to how long you may need to fund your retirement. Quite surprisingly, many people tend to underestimate how long they’ll live and as a result run out of money. Don’t let that happen to you. The best rule of thumb is to assume you’ll live to at least age 90 and calculate for that.
What is a Reverse Mortgage?
By: msalada
Reverse mortgages or becoming more readily available and popular as a financing option. These mortgages are generally used by older people who have accumulated a substantial amount of equity in their home. Most lenders require the borrower to be at least 62 years of age. Reverse mortgages are a good way for them to subsidize their retirement income. The way a reverse mortgage works is by the lender making payments to you based on the value of the equity in your home as opposed to you making payments to a lender with a traditional mortgage. Taxes and interest are added to the amount that needs repaid, decreasing the equity in the home. The lender gets their money after the house is sold or when the owner dies. Most reverse mortgages do not have to be repaid for a long time and some not at all, as long as you continue to live in the property. The amount you are loaned is based on your age, the value of your home and the current interest rates. Your loan is usually disbursed in one of the following ways: * A lump sum that is given to you or used to pay off debt or a combination of the two. * Fixed monthly payments that will be made to you for a set period of time. * Fixed monthly payments that will be made to you as long as you live in the home. These payments will be smaller than the ones in the previous option. * As a line of credit. * As a combination of a credit line and one of the payment options. Some potential drawbacks of reverse mortgages are: * You can only use your equity once. If you use it to live on and have an emergency later it will not be there. * There can be substantial fees involved with reverse mortgages. There may be upfront fees as high as $5000 dollars. It is wise to do some comparative shopping when it comes to this type of financing. * Your payment amount may not meet your needs. How much good will $100 a month do you if it is going to cost you the equity in your home? * Your ability to receive government pay outs such as SSI and Medicaid may be affected. * Make sure your lender is reputable. The names of reputable lenders can be gotten from the Department of Housing Urban Development. * Upon death, if repayment has not been made, your home will go to the lender. This may not necessarily be a bad thing, but it is something to consider. These are a few of the facts about reverse mortgages. These mortgages can be a big help if you need money later on in life, but they also come at a price. Only you can decide, based on your situation, if that price is worth paying.
About the Author
Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.
Reverse mortgages or becoming more readily available and popular as a financing option. These mortgages are generally used by older people who have accumulated a substantial amount of equity in their home. Most lenders require the borrower to be at least 62 years of age. Reverse mortgages are a good way for them to subsidize their retirement income. The way a reverse mortgage works is by the lender making payments to you based on the value of the equity in your home as opposed to you making payments to a lender with a traditional mortgage. Taxes and interest are added to the amount that needs repaid, decreasing the equity in the home. The lender gets their money after the house is sold or when the owner dies. Most reverse mortgages do not have to be repaid for a long time and some not at all, as long as you continue to live in the property. The amount you are loaned is based on your age, the value of your home and the current interest rates. Your loan is usually disbursed in one of the following ways: * A lump sum that is given to you or used to pay off debt or a combination of the two. * Fixed monthly payments that will be made to you for a set period of time. * Fixed monthly payments that will be made to you as long as you live in the home. These payments will be smaller than the ones in the previous option. * As a line of credit. * As a combination of a credit line and one of the payment options. Some potential drawbacks of reverse mortgages are: * You can only use your equity once. If you use it to live on and have an emergency later it will not be there. * There can be substantial fees involved with reverse mortgages. There may be upfront fees as high as $5000 dollars. It is wise to do some comparative shopping when it comes to this type of financing. * Your payment amount may not meet your needs. How much good will $100 a month do you if it is going to cost you the equity in your home? * Your ability to receive government pay outs such as SSI and Medicaid may be affected. * Make sure your lender is reputable. The names of reputable lenders can be gotten from the Department of Housing Urban Development. * Upon death, if repayment has not been made, your home will go to the lender. This may not necessarily be a bad thing, but it is something to consider. These are a few of the facts about reverse mortgages. These mortgages can be a big help if you need money later on in life, but they also come at a price. Only you can decide, based on your situation, if that price is worth paying.
About the Author
Marjorie Salada is the owner of debtmanagement1.com, a website that contains information on debt consolidation, debt settlement, debt counseling and how to manage credit card debt.
Wednesday, February 18, 2009
Debt Consolidation Services for Loan Reduction
By: arsen1
There are many debt consolidation services that help their client towards loan reduction and financial freedom. Debt consolidation can become the first step in achieving debt free and focusing on positive financial management. Due to consumerism in our todays society, millions of people are forced to overuse their credit cards causing major debts, which result in bad credit rating. These issues escalate every month as interest and fees are increasing and ability to pay debts is decreasing. Improve Quality of Life Debt reduction services are programs to help consumers get their feet back again on their financial life. The programs are meant to assist you to get loan reduction by negotiating with your creditors to lower interest and fees. In many cases debt reduction services help you consolidate all loans under one roof aiming new structure to make you easy pay all debts on a regular basis. These services are personalized to help clients with different financial history. They come up with various ways of resolving debt issues of individual client by counseling with them and mapping out a plan stop the harassment, lower interest, or eliminate debt all together by working as a facilitator between the consumer and the creditor. A debt consolidation professional is trained to assess clients situation and make a plan to produce the best solution to reduce their financial burden. Getting loan reduction is only one of the purposes of debt consolidation. Clients can also expect to receive help in stopping late fees and getting balances down. As this is happening they are on their way to fix their credit rating. Assessment is very important The first step in analyzing whether you will benefit from debt reduction is to calculate all your debts. Make sure that you include all debts from credit cards, car loans, mortgages, and other personal loans. You then have to figure out how much the balance, interest rate and monthly repayment for individual debt. Do a simple calculation to get a rough figure as to how much you will have to pay for each debt at the completion of the loan. Debt consolidation services come into help when you find yourself in a complicated situation to pay off all your debts from different creditors. A debt consolidation program gives you a loan that is equal to the either the total amount of your outstanding debt or to a significant portion of it. You will then have to pay off that new loan so you only have a single debt remaining.
There are many debt consolidation services that help their client towards loan reduction and financial freedom. Debt consolidation can become the first step in achieving debt free and focusing on positive financial management. Due to consumerism in our todays society, millions of people are forced to overuse their credit cards causing major debts, which result in bad credit rating. These issues escalate every month as interest and fees are increasing and ability to pay debts is decreasing. Improve Quality of Life Debt reduction services are programs to help consumers get their feet back again on their financial life. The programs are meant to assist you to get loan reduction by negotiating with your creditors to lower interest and fees. In many cases debt reduction services help you consolidate all loans under one roof aiming new structure to make you easy pay all debts on a regular basis. These services are personalized to help clients with different financial history. They come up with various ways of resolving debt issues of individual client by counseling with them and mapping out a plan stop the harassment, lower interest, or eliminate debt all together by working as a facilitator between the consumer and the creditor. A debt consolidation professional is trained to assess clients situation and make a plan to produce the best solution to reduce their financial burden. Getting loan reduction is only one of the purposes of debt consolidation. Clients can also expect to receive help in stopping late fees and getting balances down. As this is happening they are on their way to fix their credit rating. Assessment is very important The first step in analyzing whether you will benefit from debt reduction is to calculate all your debts. Make sure that you include all debts from credit cards, car loans, mortgages, and other personal loans. You then have to figure out how much the balance, interest rate and monthly repayment for individual debt. Do a simple calculation to get a rough figure as to how much you will have to pay for each debt at the completion of the loan. Debt consolidation services come into help when you find yourself in a complicated situation to pay off all your debts from different creditors. A debt consolidation program gives you a loan that is equal to the either the total amount of your outstanding debt or to a significant portion of it. You will then have to pay off that new loan so you only have a single debt remaining.
Tips for Surviving Credit Card Debt
By: LandonMcGehee
Debt from undisciplined and irresponsible credit card use is a big problem across the world as the economic climate makes consumer come face-to-face with their debt. For some their debt is not from frivolous spending but a medical emergency or some unforeseen event, but most people with credit card debt find themselves dealing with the stress and burden of debt because of unwise spending or use of their credit cards.
There are many ways to take on the task of paying of credit card balances. For example, paying highest interest first or paying the lowest balance owed regardless of the interest rate. Whatever method used it takes extreme focus, dedication, restraint and discipline to pay it off and pass up the check out counter.
Paying off debt of any kind is one step in the process, but what happens once all your debts are marked paid-in-full! Does your spending life change?
Life After Debt
The road into debt is usually littered with a variety of purchases that ever so slowly begin to multiply and poison a consumer's life. These consumers are confused. They confuse fun and pleasure thinking it will make them happy.
No everyone who starts the journey to bury their debt wins and is successful. The path to debt was slow and so will the journey out of the grip of debt. Some make it and celebrate with a buying spree instead of learning debt lifestyle lessons.
The goal of paying off debt should be one step but the next should be of greater or equal importance, which is to remain debt-free. The payoff is a less-stress life. You'll gain a new perspective on buying needs and not financing wants.
The "rules" you need to follow are so basic but it is simple rules far too many consumers ignore and bury their head in the sand. Here's a quick run down to get those credit cards paid down and off.
Consolidate
Take all those multiple cards and consolidate them into a balance transfer creditcard if you are facing high balances and the process will take some time. Move the open credit card balances over to a new low interest balance credit card to consolidate the debt and give yourself one focused bill.
Do Not Overspend
A sale on something you cannot afford is no deal. Stay out of the stores if the temptation is too great.
Stay well below your credit limit. The target is 50%. Whatever your credit limit try to get below 50% of that total.
Pay bills on time and pay extra. It is best to stop charging all together but if you must charge pay off all charges made during the month and then pay the minimum plus more. Remember this takes focus.
No more than 2 cards. That means only 2 accounts. Close all the other accounts.
Start tracking your spending. Write down each expenditure to see where you are spending extra money - everyone does. Stop the extra spending and apply the extra money to the credit card balance. This is above the minimum.
Those are just some very basic items to get started. Look at creating a spending plan as you start seeing where your money is being spent. Attack the debt on those credit cards.
Debt from undisciplined and irresponsible credit card use is a big problem across the world as the economic climate makes consumer come face-to-face with their debt. For some their debt is not from frivolous spending but a medical emergency or some unforeseen event, but most people with credit card debt find themselves dealing with the stress and burden of debt because of unwise spending or use of their credit cards.
There are many ways to take on the task of paying of credit card balances. For example, paying highest interest first or paying the lowest balance owed regardless of the interest rate. Whatever method used it takes extreme focus, dedication, restraint and discipline to pay it off and pass up the check out counter.
Paying off debt of any kind is one step in the process, but what happens once all your debts are marked paid-in-full! Does your spending life change?
Life After Debt
The road into debt is usually littered with a variety of purchases that ever so slowly begin to multiply and poison a consumer's life. These consumers are confused. They confuse fun and pleasure thinking it will make them happy.
No everyone who starts the journey to bury their debt wins and is successful. The path to debt was slow and so will the journey out of the grip of debt. Some make it and celebrate with a buying spree instead of learning debt lifestyle lessons.
The goal of paying off debt should be one step but the next should be of greater or equal importance, which is to remain debt-free. The payoff is a less-stress life. You'll gain a new perspective on buying needs and not financing wants.
The "rules" you need to follow are so basic but it is simple rules far too many consumers ignore and bury their head in the sand. Here's a quick run down to get those credit cards paid down and off.
Consolidate
Take all those multiple cards and consolidate them into a balance transfer creditcard if you are facing high balances and the process will take some time. Move the open credit card balances over to a new low interest balance credit card to consolidate the debt and give yourself one focused bill.
Do Not Overspend
A sale on something you cannot afford is no deal. Stay out of the stores if the temptation is too great.
Stay well below your credit limit. The target is 50%. Whatever your credit limit try to get below 50% of that total.
Pay bills on time and pay extra. It is best to stop charging all together but if you must charge pay off all charges made during the month and then pay the minimum plus more. Remember this takes focus.
No more than 2 cards. That means only 2 accounts. Close all the other accounts.
Start tracking your spending. Write down each expenditure to see where you are spending extra money - everyone does. Stop the extra spending and apply the extra money to the credit card balance. This is above the minimum.
Those are just some very basic items to get started. Look at creating a spending plan as you start seeing where your money is being spent. Attack the debt on those credit cards.
Tuesday, February 17, 2009
How A Budget Can Stop Debt From Piling Up
By: WilliamBlake
If you've managed (or mismanaged) to get yourself into a boatload of debt, there are ways to insure that this never happens again if at all possible, and the cornerstone of these ways is a sound, well-thought-out budgeting program. While this may not seem like a very sexy answer to what appears to be a huge problem, it is in fact the most essential part of your future going forward from here.
If you don't manage your money better, you'll only end up in the same position all over again. I have known many who have dipped their toes in this well far too often, and it has been not only their financial ruin, but sometimes also at the cost of their families. Debt and sensible budgeting are definitely things to get a handle on! Let's look at some of the ways you can do that.
First of all, if you are married, this needs to be a joint effort. Nothing will bring ruin to a marriage faster than a spouse running rampant with the finances. You need to be in agreement here, both on the totals and the categories of spending. There needs to be give and take. There needs to be some hard questions. There needs to be an accounting of your financial lives that takes into account your needs, and what you can live without. You need to be totally honest with one another, or this is simply a waste of time.
Many people who are in debt trouble resort to the envelope system, where you put each month's allotment for certain expenses into an envelope in cash, and when this is gone, so is the budget for the month for that item. Obviously, things like your mortgage won't fit in this envelope, nor should automatic payments. This is intended for controlling discretionary spending that has gotten out of hand and needs to be tracked.
It is surprisingly effective. Some of the categories you might consider are clothing, entertainment, eating out, even Starbucks. I know people who were shocked to discover that they spent several hundred dollars a month there!
The main point about implementing a budget needs to be the long-term aspect of all this. It will do you next to no good to do this for a month or so. Sound household budgeting is really no different than using a budget for your business. Most people wouldn't consider running a business that way, so neither should you run your home that way. It is YOUR business!
In this day and age when prices keep creeping up and saving is getting harder and harder to do, make it easy on yourself and find the extra dollars to save and invest in the money you already have.
There are free budgeting forms available all over the web. Find one you like and start using it, and maybe, just maybe you'll find more money at the end of the month this time.
If you've managed (or mismanaged) to get yourself into a boatload of debt, there are ways to insure that this never happens again if at all possible, and the cornerstone of these ways is a sound, well-thought-out budgeting program. While this may not seem like a very sexy answer to what appears to be a huge problem, it is in fact the most essential part of your future going forward from here.
If you don't manage your money better, you'll only end up in the same position all over again. I have known many who have dipped their toes in this well far too often, and it has been not only their financial ruin, but sometimes also at the cost of their families. Debt and sensible budgeting are definitely things to get a handle on! Let's look at some of the ways you can do that.
First of all, if you are married, this needs to be a joint effort. Nothing will bring ruin to a marriage faster than a spouse running rampant with the finances. You need to be in agreement here, both on the totals and the categories of spending. There needs to be give and take. There needs to be some hard questions. There needs to be an accounting of your financial lives that takes into account your needs, and what you can live without. You need to be totally honest with one another, or this is simply a waste of time.
Many people who are in debt trouble resort to the envelope system, where you put each month's allotment for certain expenses into an envelope in cash, and when this is gone, so is the budget for the month for that item. Obviously, things like your mortgage won't fit in this envelope, nor should automatic payments. This is intended for controlling discretionary spending that has gotten out of hand and needs to be tracked.
It is surprisingly effective. Some of the categories you might consider are clothing, entertainment, eating out, even Starbucks. I know people who were shocked to discover that they spent several hundred dollars a month there!
The main point about implementing a budget needs to be the long-term aspect of all this. It will do you next to no good to do this for a month or so. Sound household budgeting is really no different than using a budget for your business. Most people wouldn't consider running a business that way, so neither should you run your home that way. It is YOUR business!
In this day and age when prices keep creeping up and saving is getting harder and harder to do, make it easy on yourself and find the extra dollars to save and invest in the money you already have.
There are free budgeting forms available all over the web. Find one you like and start using it, and maybe, just maybe you'll find more money at the end of the month this time.
Second Chance Bank Accounts
By: MaryBush
Second chance bank accounts are made for individuals who are unable to get a traditional savings or checking account. It's one of the best solutions when your name has been added to Chex Systems or Telecheck. It offers individuals a brand new start and new responsibility. Just like cleaning up a bad credit report, you must take care of your banking issues also.
Having a bank account provides us a safe and convenient means to save money and earn interest on our savings and checking accounts. Individuals whose names have been added to Chex Systems and/or TeleCheck indicate problems maintaining their financial responsibilities and by having their names added, other banks will not let them open an account.
Chex Systems and Telecheck are somewhat like the credit bureaus of the financial banking industry. Get your name on their lists and the majority of banks will turn you away and your current bank may even close your account if they get wind of your financial problems.
There really are very few guidelines to opening a second chance bank account. A very low minimum amount is required to open this type of account, which follows the same rules of the mainstream banking industry. And one of the fortes of a second chance bank account is that no credit check is required. Individuals with bad credit and/or bad banking history are approved. No Chex Systems inquiries are offered at the time of opening second-chance bank accounts.
The procedures to open one of these accounts are simple. Complete an application form with a copy of your ID and a small minimum deposit. Once the account is opened, the account holder is free to make transactions as they would with traditional accounts.
A number of companies have begun to offer second-chance bank accounts. There are several programs designed to provide assistance in re-establishing a banking relationship. Some banks will allow you to open a regular savings account for a specified time to show responsibility.
While there are banks that do not use Chex Systems or Telecheck, you must research to see which of those banks do not have that relationship. In any case, when you do get yourself on the right track, you must use good financial sense to prosper or you'll find yourself right back where you started.
Second chance bank accounts are made for individuals who are unable to get a traditional savings or checking account. It's one of the best solutions when your name has been added to Chex Systems or Telecheck. It offers individuals a brand new start and new responsibility. Just like cleaning up a bad credit report, you must take care of your banking issues also.
Having a bank account provides us a safe and convenient means to save money and earn interest on our savings and checking accounts. Individuals whose names have been added to Chex Systems and/or TeleCheck indicate problems maintaining their financial responsibilities and by having their names added, other banks will not let them open an account.
Chex Systems and Telecheck are somewhat like the credit bureaus of the financial banking industry. Get your name on their lists and the majority of banks will turn you away and your current bank may even close your account if they get wind of your financial problems.
There really are very few guidelines to opening a second chance bank account. A very low minimum amount is required to open this type of account, which follows the same rules of the mainstream banking industry. And one of the fortes of a second chance bank account is that no credit check is required. Individuals with bad credit and/or bad banking history are approved. No Chex Systems inquiries are offered at the time of opening second-chance bank accounts.
The procedures to open one of these accounts are simple. Complete an application form with a copy of your ID and a small minimum deposit. Once the account is opened, the account holder is free to make transactions as they would with traditional accounts.
A number of companies have begun to offer second-chance bank accounts. There are several programs designed to provide assistance in re-establishing a banking relationship. Some banks will allow you to open a regular savings account for a specified time to show responsibility.
While there are banks that do not use Chex Systems or Telecheck, you must research to see which of those banks do not have that relationship. In any case, when you do get yourself on the right track, you must use good financial sense to prosper or you'll find yourself right back where you started.
Monday, February 16, 2009
What types of student loans are available?
By: DennisPowell
So you've worked your tail off for the last several years eating Ramen and pulling all nighters while living on your student loans that almost covered the bills, and now you've got a great job, a new life and a mountain of debt. Life next pop quizWhat do you do? Fortunately for today's education Loan borrowers there are plenty of options to help you get your new life started without having the old one hanging around your neck like an anchor. There are plenty of student loan consolidation options available for the savvy borrower, and one of them will probably fit your life.
Federal family education loan consolidation is probably the first place many borrowers will look. FFEL consolidation offers programs to consolidate both subsidized as well and unsubsidized loans. In some cases it is possible to get an FFEL consolidation loan even if you have been in default on your loans in the past. FFEL consolidation loans often offer fixed rates, and extended terms which help those just entering the workforce to lower their monthly payment.
In addition to traditional federally funded loans, many students finance their advanced education with a variety of private loans. Private consolidation of these loans offers borrowers many of the same benefits as federal consolidation - fixed rates, longer terms, and lower payments. Conditions may be stricter for a private consolidation and you cannot usually combine private and federal loans under a single consolidation package. You may end up with two consolidation loans, one for your federal debt, and one for private; be sure to shop around for the best rates.
Many parents use the PLUS loan program to borrow for the children's education. PLUS loans can be consolidated using a PLUS consolidation program much which offers similar benefits and potential pitfalls of FFEL and private consolidation - fixed rates, and lower payments spread over a longer term. Plus loan consolidations are great for some people but parents need to take a good look at all of their options before consolidating.
Even if none of the traditional consolidation methods work for your situation, there are still alternatives to help students get started on the right foot towards financial solvency. Some people take out second mortgages on their home and use the money to pay off all of their loans. ( An added benefit of this method is that you may be able to retain some of the tax benefits of regular consolidations) Private personal loans from family members can also help those with poor credit, and some companies offer tuition reimbursement programs which may help off set up to 100% of your education costs.
New technologies have come to the lending world where the idea of peer-to-peer programs and micro-financing has taken root. Peer to peer financing allows the borrower to present a request for funding to a group of potential "micro-investors" who then bid on the loan by offering different rates and terms. Once a deal is struck the network services the loan, ensures payments are made and the necessary paperwork is taken care of. For borrowers with needs outside the comfort zone of traditional banks a P2P loan may help them get started down the path to getting their loans paid off.
You did it! You managed to finish school and are about to make your way into the "real" world. Thanks to the variety of consolidation programs available for the modern education loan, you can get started on the right track with manageable debt load and a solid plan for your financial future. Find the package that works for you, make a plan and stick with it, and you'll be paying down those student loans in no time.
So you've worked your tail off for the last several years eating Ramen and pulling all nighters while living on your student loans that almost covered the bills, and now you've got a great job, a new life and a mountain of debt. Life next pop quizWhat do you do? Fortunately for today's education Loan borrowers there are plenty of options to help you get your new life started without having the old one hanging around your neck like an anchor. There are plenty of student loan consolidation options available for the savvy borrower, and one of them will probably fit your life.
Federal family education loan consolidation is probably the first place many borrowers will look. FFEL consolidation offers programs to consolidate both subsidized as well and unsubsidized loans. In some cases it is possible to get an FFEL consolidation loan even if you have been in default on your loans in the past. FFEL consolidation loans often offer fixed rates, and extended terms which help those just entering the workforce to lower their monthly payment.
In addition to traditional federally funded loans, many students finance their advanced education with a variety of private loans. Private consolidation of these loans offers borrowers many of the same benefits as federal consolidation - fixed rates, longer terms, and lower payments. Conditions may be stricter for a private consolidation and you cannot usually combine private and federal loans under a single consolidation package. You may end up with two consolidation loans, one for your federal debt, and one for private; be sure to shop around for the best rates.
Many parents use the PLUS loan program to borrow for the children's education. PLUS loans can be consolidated using a PLUS consolidation program much which offers similar benefits and potential pitfalls of FFEL and private consolidation - fixed rates, and lower payments spread over a longer term. Plus loan consolidations are great for some people but parents need to take a good look at all of their options before consolidating.
Even if none of the traditional consolidation methods work for your situation, there are still alternatives to help students get started on the right foot towards financial solvency. Some people take out second mortgages on their home and use the money to pay off all of their loans. ( An added benefit of this method is that you may be able to retain some of the tax benefits of regular consolidations) Private personal loans from family members can also help those with poor credit, and some companies offer tuition reimbursement programs which may help off set up to 100% of your education costs.
New technologies have come to the lending world where the idea of peer-to-peer programs and micro-financing has taken root. Peer to peer financing allows the borrower to present a request for funding to a group of potential "micro-investors" who then bid on the loan by offering different rates and terms. Once a deal is struck the network services the loan, ensures payments are made and the necessary paperwork is taken care of. For borrowers with needs outside the comfort zone of traditional banks a P2P loan may help them get started down the path to getting their loans paid off.
You did it! You managed to finish school and are about to make your way into the "real" world. Thanks to the variety of consolidation programs available for the modern education loan, you can get started on the right track with manageable debt load and a solid plan for your financial future. Find the package that works for you, make a plan and stick with it, and you'll be paying down those student loans in no time.
Credit Debt Consolidation, Are We All Sitting On A Time Bomb Waiting To Explode?
By: sgsmorgan
OK listen up folks, do you have a mountain of debt on your credit cards that would probably put a third world developing nation to shame? Suddenly does it seem to you and you alone that there is nothing in the classifieds but advertisements from Companies all promising competitive rates on Credit Debt Consolidation? Are becoming obsessed with hiding the credit card statements before your wife gets to the post in the morning? You do? Well do not be too despondent because it would appear that you are not alone in all of this. Does this not make you feel better? You feel like going out and treating yourself to something new right away! See, that is the problem. It appears that the average person in the US is about $8,000 to $10,000 in unsecured debt at any one time. Now for a certain part of the population that may or may not be a problem but for the average household it is and the knock on effects of this could be devastating on the economy. One of the reasons for this mountain of debt, it is argued is the difference between the average wage and the average cost of living, Basic balance of payments issue in Macro economic terms and the gap between monthly income and monthly expenditure in micro economic terms. In summary, living la dolce vita! Sound familiar? Yes full marks to the guys at the back, we are living beyond our means and sooner or later it is going to catch up with us all big time! If we take a look at the basic issue at stake here we have a mountain of debt that the average person only services the bare minimum of. So let us look at the basic mathematics. Person A has an income of $40,000 per annum and credit card debt of $10,000 that they clear at the rate of the bare minimum (usually 5% per month) so this roughly equates to $500 per month out of a disposable income of roughly $2,500 per month. This means that twenty percent of their income goes straight out of the door to service existing debt before they have had a chance to cover the ongoing expenses for the month. Throw into the mix the unexpected hospital visit, pet care expenditure or domestic crisis or automobile problem and before you know it the problems merely increase You do not have to be a fiduciary genius to spot the potential flaw in this whole exercise. As a major national charity for the Homeless once said we are all a mere 3 missed pay checks from being without a roof over our heads. OK this may be slightly on the over dramatic side but by studying the information above it is quite easy to see how very easily this could happen. Financial habits like these are all well and good in days of low interest rate but when the economy starts to cool and the markets react badly then we have to change our ways or go under. If you are going to do something positive about this then make sure that whatever decision you reach, whatever route you plan to take is the right one for you and one that you see yourself accomplishing in its entirety. Do not let this force you into some rash and foolish credit debt consolidation exercise that might cost you more in the long term.
OK listen up folks, do you have a mountain of debt on your credit cards that would probably put a third world developing nation to shame? Suddenly does it seem to you and you alone that there is nothing in the classifieds but advertisements from Companies all promising competitive rates on Credit Debt Consolidation? Are becoming obsessed with hiding the credit card statements before your wife gets to the post in the morning? You do? Well do not be too despondent because it would appear that you are not alone in all of this. Does this not make you feel better? You feel like going out and treating yourself to something new right away! See, that is the problem. It appears that the average person in the US is about $8,000 to $10,000 in unsecured debt at any one time. Now for a certain part of the population that may or may not be a problem but for the average household it is and the knock on effects of this could be devastating on the economy. One of the reasons for this mountain of debt, it is argued is the difference between the average wage and the average cost of living, Basic balance of payments issue in Macro economic terms and the gap between monthly income and monthly expenditure in micro economic terms. In summary, living la dolce vita! Sound familiar? Yes full marks to the guys at the back, we are living beyond our means and sooner or later it is going to catch up with us all big time! If we take a look at the basic issue at stake here we have a mountain of debt that the average person only services the bare minimum of. So let us look at the basic mathematics. Person A has an income of $40,000 per annum and credit card debt of $10,000 that they clear at the rate of the bare minimum (usually 5% per month) so this roughly equates to $500 per month out of a disposable income of roughly $2,500 per month. This means that twenty percent of their income goes straight out of the door to service existing debt before they have had a chance to cover the ongoing expenses for the month. Throw into the mix the unexpected hospital visit, pet care expenditure or domestic crisis or automobile problem and before you know it the problems merely increase You do not have to be a fiduciary genius to spot the potential flaw in this whole exercise. As a major national charity for the Homeless once said we are all a mere 3 missed pay checks from being without a roof over our heads. OK this may be slightly on the over dramatic side but by studying the information above it is quite easy to see how very easily this could happen. Financial habits like these are all well and good in days of low interest rate but when the economy starts to cool and the markets react badly then we have to change our ways or go under. If you are going to do something positive about this then make sure that whatever decision you reach, whatever route you plan to take is the right one for you and one that you see yourself accomplishing in its entirety. Do not let this force you into some rash and foolish credit debt consolidation exercise that might cost you more in the long term.
Sunday, February 15, 2009
The Best Low Interest Credit Card for Debt Consolidation
By: AdrianFletcher
It may seem like a contradiction to get another credit card if you are trying to solve a debt problem. Surely a new credit card is one more temptation to spend money that you haven't got and get yourself into more financial difficulties. This is true to some extent as credit cards are so convenient to use and are many goods and services actually make it easier to use a card than cash at times. However, a low interest credit card for debt consolidation can help to reduce your debt provided it is used right. This article will give you some pointers on how to do this.
The credit card industry is highly competitive so banks try to make better offers to potential customers and trump their competitors all the time. New incentives are dreamed up to encourage a certain niche to use their credit card. So air miles might appeal to business people that jet all over the place to hold meetings. Whereas credit or money back on clothing purchases may appeal to avid fashionistas.
For people with large debts, a low interest credit card with a balance transfer feature is probably an attractive option. For someone in debt, the major advantage of such a card is to transfer all the debt to the new card. A feature of these cards is a low or zero interest rate for any balance transfers for an introductory period.
With this done, you should be determined to pay of the debts before the balance transfer introductory period is up. In this way, you will save money on interest payments. It will also help you to stay focused on paying off the debt because you know you will save money if you don't hit the deadline. The debt payment will only be once a month too, making it easier to stay organized and not miss payments, as you may do with many cards.
Of course, the one important assumption that seems to pass many people by is that you will work towards paying off the debt. If you think that no interest for six months gives you a six month vacation from your debts then you are approaching the low interest credit card for debt consolidation from the wrong direction.
So in reality, you don't really need a low interest credit card for debt consolidation. You could try to get some other form of credit, like a bank loan instead. A bank loan will probably have a lower repayment rate than a credit card. However it is unlikely to have a 0% repayment rate for the first six months.
However, it is vital that you pay off the debt within the six month introductory period or you won't be better off. This is something you have to decide about before consolidating your debt. If you don't think you can pay off the debt within six months then maybe a low interest credit card with balance transfer is not for you. You may save more money by getting a bank loan.
Even if this is the case, getting a low interest credit card could be far easier than getting a bank loan. It may be a speedier and cheaper option in terms of the application too. Indeed, provided you stick to your goal of clearing your consolidated debt within the time period allocated, a low interest credit card with balance transfer could save you money and get you out of debt faster.
It may seem like a contradiction to get another credit card if you are trying to solve a debt problem. Surely a new credit card is one more temptation to spend money that you haven't got and get yourself into more financial difficulties. This is true to some extent as credit cards are so convenient to use and are many goods and services actually make it easier to use a card than cash at times. However, a low interest credit card for debt consolidation can help to reduce your debt provided it is used right. This article will give you some pointers on how to do this.
The credit card industry is highly competitive so banks try to make better offers to potential customers and trump their competitors all the time. New incentives are dreamed up to encourage a certain niche to use their credit card. So air miles might appeal to business people that jet all over the place to hold meetings. Whereas credit or money back on clothing purchases may appeal to avid fashionistas.
For people with large debts, a low interest credit card with a balance transfer feature is probably an attractive option. For someone in debt, the major advantage of such a card is to transfer all the debt to the new card. A feature of these cards is a low or zero interest rate for any balance transfers for an introductory period.
With this done, you should be determined to pay of the debts before the balance transfer introductory period is up. In this way, you will save money on interest payments. It will also help you to stay focused on paying off the debt because you know you will save money if you don't hit the deadline. The debt payment will only be once a month too, making it easier to stay organized and not miss payments, as you may do with many cards.
Of course, the one important assumption that seems to pass many people by is that you will work towards paying off the debt. If you think that no interest for six months gives you a six month vacation from your debts then you are approaching the low interest credit card for debt consolidation from the wrong direction.
So in reality, you don't really need a low interest credit card for debt consolidation. You could try to get some other form of credit, like a bank loan instead. A bank loan will probably have a lower repayment rate than a credit card. However it is unlikely to have a 0% repayment rate for the first six months.
However, it is vital that you pay off the debt within the six month introductory period or you won't be better off. This is something you have to decide about before consolidating your debt. If you don't think you can pay off the debt within six months then maybe a low interest credit card with balance transfer is not for you. You may save more money by getting a bank loan.
Even if this is the case, getting a low interest credit card could be far easier than getting a bank loan. It may be a speedier and cheaper option in terms of the application too. Indeed, provided you stick to your goal of clearing your consolidated debt within the time period allocated, a low interest credit card with balance transfer could save you money and get you out of debt faster.
Tips on Avoiding Bankruptcy
By: JosephThen
By the time you finish reading this, you will be equipped with the knowledge to avoid bankruptcy and how to avoid it. It is true that people nowadays depend a lot on 'plastics' and most of the time; this is the reason that leads to bankruptcy.
I don't know anything about you but I bet you own a credit card or even credit cards. Do you know that if you don't pay your credit card bills on time, it will eventually lead to a big problem?
If you have ever been in this state you know how it feels. However, if you have not, let me just tell you how it is. Imagine how you would feel to lose all you money, property and assets? I bet you'll feel helpless.
You may have heard of it but you may not know exactly what it means. Well, in this article you will discover bankruptcy. Bankruptcy is a legally declared inability or impairment of ability of an individual; or organizations to pay their creditors.
There are many negative effects of bankruptcy. With the negative effects of bankruptcy, I am sure no one wants to be caught in such a situation. Well, if you do not want to be caught in such a situation, the tips below are here to help you. The most important thing you should remember is that you should never, in any circumstances, pay your credit card bills with another credit card.
Given the negative effects of bankruptcy, I am sure no one wants to be caught in such a situation, you should follow these pointers. The first thing you should remember is that you should never pay your credit card bills with another credit card.
The next thing you should remember is that you should always remember to pay your bills on time. It does not matter if the amount of your bill is small. No matter how small it is you need to pay it, every month. Avoid delaying the payment of your monthly bills.
Another advice that I can give you is that you should avoid getting loans. A loan can be helpful at times when you need financial loans but it can be a big problem if you do not have the habit of paying your bills on time. Always remember that loans with high interest can be a financial burden to you in future. However, if you find that taking a loan is necessary, you should always loan what you need and not anything more.
By following these pointers, you can avoid bankruptcy. Bankruptcy can have many negative effects. Once you are declared a bankrupt, it will be difficult to apply for loans from banks and many more problems will arise. Therefore, you should remember and take note of the pointers above.
In conclusion, if you prioritize your cash flow properly, you would not have financial problems that would lead to bankruptcy. And, you should also avoid getting yourself into debts. With that, I hope you heed the advice and take the pointer seriously. Remember, bankruptcy has a lot of negative effects.
About the Author
Bankruptcy is no fun. Becoming a bankrupt means that you have trouble taking loans and other financial services. If that is not bad enough, the bankruptcy record will stay with you for up to 10 years! Find out how you can avoid Bankruptcy by visiting this website NOW ==> http://www.outofbankruptcy.info
By the time you finish reading this, you will be equipped with the knowledge to avoid bankruptcy and how to avoid it. It is true that people nowadays depend a lot on 'plastics' and most of the time; this is the reason that leads to bankruptcy.
I don't know anything about you but I bet you own a credit card or even credit cards. Do you know that if you don't pay your credit card bills on time, it will eventually lead to a big problem?
If you have ever been in this state you know how it feels. However, if you have not, let me just tell you how it is. Imagine how you would feel to lose all you money, property and assets? I bet you'll feel helpless.
You may have heard of it but you may not know exactly what it means. Well, in this article you will discover bankruptcy. Bankruptcy is a legally declared inability or impairment of ability of an individual; or organizations to pay their creditors.
There are many negative effects of bankruptcy. With the negative effects of bankruptcy, I am sure no one wants to be caught in such a situation. Well, if you do not want to be caught in such a situation, the tips below are here to help you. The most important thing you should remember is that you should never, in any circumstances, pay your credit card bills with another credit card.
Given the negative effects of bankruptcy, I am sure no one wants to be caught in such a situation, you should follow these pointers. The first thing you should remember is that you should never pay your credit card bills with another credit card.
The next thing you should remember is that you should always remember to pay your bills on time. It does not matter if the amount of your bill is small. No matter how small it is you need to pay it, every month. Avoid delaying the payment of your monthly bills.
Another advice that I can give you is that you should avoid getting loans. A loan can be helpful at times when you need financial loans but it can be a big problem if you do not have the habit of paying your bills on time. Always remember that loans with high interest can be a financial burden to you in future. However, if you find that taking a loan is necessary, you should always loan what you need and not anything more.
By following these pointers, you can avoid bankruptcy. Bankruptcy can have many negative effects. Once you are declared a bankrupt, it will be difficult to apply for loans from banks and many more problems will arise. Therefore, you should remember and take note of the pointers above.
In conclusion, if you prioritize your cash flow properly, you would not have financial problems that would lead to bankruptcy. And, you should also avoid getting yourself into debts. With that, I hope you heed the advice and take the pointer seriously. Remember, bankruptcy has a lot of negative effects.
About the Author
Bankruptcy is no fun. Becoming a bankrupt means that you have trouble taking loans and other financial services. If that is not bad enough, the bankruptcy record will stay with you for up to 10 years! Find out how you can avoid Bankruptcy by visiting this website NOW ==> http://www.outofbankruptcy.info
Saturday, February 14, 2009
How To Find Cheap Loans
By: ChrisChanning
Loans are nice to have when buying necessities like cars, homes, and other high prices items. But where possible, consumers need to find the best rates on the cheapest loans available in order to achieve financial success. The problem comes to be filtering all the good loans from the bad ones- something that is more difficult than what it would seem.
The first step to be taken before finding loan options is to check one's credit score. Only with a good credit score can a consumer ever hope to obtain a reasonable loan. Once the credit score is received, consumers should try to fix any errors or negative sources of impact within their credit report. This process can take up to a couple of months, but if time permits, it will save hundreds or thousands in the long run.
Knowing tactics in common business can greatly aid a consumer in finding the best loan. When going in to consult a lender, make it noticed that you are shopping with their competitors. For fear of losing business, lenders will very often provide discounted rates that they would otherwise not offer. After all, lenders only make money through the money the lend, and they go out of business if competitors are taking all of the market share.
A loan has many faces. It can be as specific as obtaining a house loan, or as ambiguous as opting for a general personal loan. Whatever the case, it is a good idea to find the most specific and secure loan available. Where possible, try to use collateral so as to keep interest payments minimal. The high interest rates of unsecured loans can add thousands of dollars to extended loans of high value, so always investigate any options in obtaining a loan.
A new form of loan has become apparent thanks to the Internet. It is now possible to obtain loans from other Internet users or companies via financial websites that connect lenders and borrowers. While giving out loans or taking loans over the Internet can be risky, rates are often much lower and is always an option for those who are Internet savvy.
In addition to the previous solution to cheap loans, the Internet allows actual credited lenders to broadcast their services nationwide. But as many creditors can do this, there is much more competition to endure. Therefore, it is very likely a consumer will find better rate online rather than simply only shopping around town for a good rate.
Final Thoughts
Cheap loans are easy to obtain so long as enough effort is put into the process of finding them. If technology has taught us anything, it is that innovation brings newer and better options to consumers. Never forget the Internet's role in obtaining a cheap loan, and always investigate multiple resources before ultimately deciding on going with a certain lender or not. It may take time, but the time is well spent when considering hundreds can be saved each year from responsible searching.
Loans are nice to have when buying necessities like cars, homes, and other high prices items. But where possible, consumers need to find the best rates on the cheapest loans available in order to achieve financial success. The problem comes to be filtering all the good loans from the bad ones- something that is more difficult than what it would seem.
The first step to be taken before finding loan options is to check one's credit score. Only with a good credit score can a consumer ever hope to obtain a reasonable loan. Once the credit score is received, consumers should try to fix any errors or negative sources of impact within their credit report. This process can take up to a couple of months, but if time permits, it will save hundreds or thousands in the long run.
Knowing tactics in common business can greatly aid a consumer in finding the best loan. When going in to consult a lender, make it noticed that you are shopping with their competitors. For fear of losing business, lenders will very often provide discounted rates that they would otherwise not offer. After all, lenders only make money through the money the lend, and they go out of business if competitors are taking all of the market share.
A loan has many faces. It can be as specific as obtaining a house loan, or as ambiguous as opting for a general personal loan. Whatever the case, it is a good idea to find the most specific and secure loan available. Where possible, try to use collateral so as to keep interest payments minimal. The high interest rates of unsecured loans can add thousands of dollars to extended loans of high value, so always investigate any options in obtaining a loan.
A new form of loan has become apparent thanks to the Internet. It is now possible to obtain loans from other Internet users or companies via financial websites that connect lenders and borrowers. While giving out loans or taking loans over the Internet can be risky, rates are often much lower and is always an option for those who are Internet savvy.
In addition to the previous solution to cheap loans, the Internet allows actual credited lenders to broadcast their services nationwide. But as many creditors can do this, there is much more competition to endure. Therefore, it is very likely a consumer will find better rate online rather than simply only shopping around town for a good rate.
Final Thoughts
Cheap loans are easy to obtain so long as enough effort is put into the process of finding them. If technology has taught us anything, it is that innovation brings newer and better options to consumers. Never forget the Internet's role in obtaining a cheap loan, and always investigate multiple resources before ultimately deciding on going with a certain lender or not. It may take time, but the time is well spent when considering hundreds can be saved each year from responsible searching.
Mortgage Rates: Are They Going Up?
By: PamellaNeely
Once you start watching mortgage rate activity, you will quickly find that they tend to fluctuate. You are then left to make the decision about when to lock in a particular rate. Should you wait to see if the rates fall, or should you take advantage of the current rates? It is a tough decision, because once you have locked in a particular rate, you cannot undo that action.
To be good at figuring all of this out, you should educate yourself on the interest rate markets, and learn about their associated risks. Find out what stimulates the interest rates and then monitor those reports carefully.
How do you know what to watch? Mortgage rates are determined by the activity of investors buying and selling loans. Those investors can be guided by the uncertainties and fluctuations of the economy. If investors are uneasy about the market and begin selling home loans, then the mortgage rate will adjust.
Some news reports come out with information that causes people to take action and refinance, or make an offer on a house. These activities affect the interest rates as well. By the time people hear the information and react to it, the interest rate has already risen.
Rather than using the media for interest rate information, it is best that you do your own investigating. Try to hit the keyboard and start researching on the internet. You might also contact a reputable banking professional to confirm your findings.
Watching the unemployment data is also a good indicator of mortgage rate trends. High unemployment and recession cause interest rates to go down. You can keep track of this type of data through a variety of different financial reports that are available to the public.
Rate drops are logical in the bigger picture, bearing in mind that when the public has less money, the interest rates slump to encourage them to borrow money. This does seem a bit odd, though, since many of the people borrowing have a harder time paying back the money. They are a risk for the investors. High risk borrowers force the interest rates to rise.
Once you start watching mortgage rate activity, you will quickly find that they tend to fluctuate. You are then left to make the decision about when to lock in a particular rate. Should you wait to see if the rates fall, or should you take advantage of the current rates? It is a tough decision, because once you have locked in a particular rate, you cannot undo that action.
To be good at figuring all of this out, you should educate yourself on the interest rate markets, and learn about their associated risks. Find out what stimulates the interest rates and then monitor those reports carefully.
How do you know what to watch? Mortgage rates are determined by the activity of investors buying and selling loans. Those investors can be guided by the uncertainties and fluctuations of the economy. If investors are uneasy about the market and begin selling home loans, then the mortgage rate will adjust.
Some news reports come out with information that causes people to take action and refinance, or make an offer on a house. These activities affect the interest rates as well. By the time people hear the information and react to it, the interest rate has already risen.
Rather than using the media for interest rate information, it is best that you do your own investigating. Try to hit the keyboard and start researching on the internet. You might also contact a reputable banking professional to confirm your findings.
Watching the unemployment data is also a good indicator of mortgage rate trends. High unemployment and recession cause interest rates to go down. You can keep track of this type of data through a variety of different financial reports that are available to the public.
Rate drops are logical in the bigger picture, bearing in mind that when the public has less money, the interest rates slump to encourage them to borrow money. This does seem a bit odd, though, since many of the people borrowing have a harder time paying back the money. They are a risk for the investors. High risk borrowers force the interest rates to rise.
Subscribe to:
Posts (Atom)