Tag Archives: consolidation
Debt Relief Options – Credit Card Debt Consolidation Loan Program
It is when the debt becomes unmanageable that people start a frantic search for debt relief measures like debt consolidation program. Debt becomes unmanageable when the income of the debtor is limited and falls short of servicing the debts of the debtor.
There are several reasons for the debt becoming unmanageable. The current recession has resulted in the income reduction, many job layoffs, and hike in the prices of the basic necessary commodities. As a consequence of the current recession the current applicable rate of interest is also on the rise. These sort of financial circumstances have worsened the financial situation of especially those who are already marooned in debt.
Many people have been indebted just because they do not know about the modus operandi of the credit card operators especially about the rate of interest ranging from 15% to 20%. The people with multiple card debt usually have to resort to credit card debt consolidation loan program.
The financial institutions and lenders in the market can offer professional assistance to make the indebted person debt free. This professional assistance for debt relief can be in the form of debt settlement, debt management, debt consolidation program and finally bankruptcy.
Debt settlement is an option in which the lender or the creditor becomes ready to receive lump sum money to discharge the debt. In this option the debtor has to negotiate with the lender or the creditor about the lump sum that the lender or the creditor would be ready to accept to nullify the debt. Usually the sum is less than the total debt but this has to be paid at one go and not by installment.
Debt management is an option in which the lender or the creditor is ready to accept a sum of money in installments over a period of time for the discharge of the debt. This is usually preceded by the negotiations between the representatives of the debt management company and the lenders or creditors of the debtors. There are many financial situation offering debt management services but the charges for the services vary.
The other option of debt relief is debt consolidation program. Debt consolidation is substitution of multiple debts with a single debt. The benefits of debt consolidation include the reduction of the overall debt, monthly payment and even the applicable rate of interest. Debt consolidation offers mental stress relief because the debtor is relieved from having to remember the dates and amount for servicing multiple debts. Before availing services of any debt consolidation company the debtor should check the authenticity, reliability, effectiveness at reduction of debt and finally the terms and conditions for availing the services.
The first step – Finding out about college loan consolidation (Page 1 of 2)
We might think that for a regular college student the main concern is to attend classes, study for exams and turn in the papers before the deadlines. However, this is not the case in North America. The students in the United States and Canada have to deal with quite complicated financial decisions throughout their years of higher education. The reason is that higher education in these countries is provided by private institutions, which offer quality education but at quite spicy costs. In these conditions, students and their families have to face tough financial decisions when they choose a college to attend. For most of them, the fees are too expensive so the first step is to try obtaining a full scholarship or partial financial aid. For the rest of the expenses, there is the widespread option of contracting a college loan.
Students can contract more than one college loan during their four years of college. If they also pursue graduate studies, it is likely that they will end up with a collection of college loans that they end up paying back for many years after graduation. It thus turns out that a college loan is not something you leave behind at graduation, along with all the other college stories, but it is a life-long commitment. The practice of contracting a college loan is so common that an entire business has developed around it covering financial and legal services for the loan contractors.
A college loan can be offered by either a governmental agency or by a private company that takes care of such financial services. If the student contracts all his student loans from the government, than he can use the option of college loan consolidation. College loan consolidation is extremely advantageous because it actually means replacing a whole set of different loans with various interest rates with just one loan having a unique rate. The main benefit of college loan consolidation is that it gives the chance to lock in the interest rate at its current value (the value at the time when the consolidation is made) thus offsetting changes in interest rates taking place over the next years, when the loan is being repaid. Nowadays, all recent graduates are advised to pursue college loan consolidation as soon as they can because rates for college loans are at an all time low and they will not remain so for too lone. Doing college loan consolidation now means that the student makes sure he or she will pay the same low rate for the following ten or more years, although interest rates for college loans may increase by 10% or more in this period.
College loan consolidation is most commonly done by recent graduates, who are starting to face the difficulties of starting to pay back the loans. Usually, during the college years, the government will subsidize the payment of the rates for students. During the first six months after graduation, young people can still be saved the trouble of having to think about college loan consolidation because they are given a grace period during which no payments should be made. The wisest of them start thinking about college loan consolidation in this time though. They consider alternative options and decide which scheme for college loan consolidation is most beneficial for them. College loan consolidation may be a tough decision to make, the financial packages offered include details that may be tedious to follow and understand. That is why recent graduates may end up postponing thinking about it. However, they are being pressured more and more to become responsible and do college loan consolidation now because of the low interest rates they should be taking advantage of.