Tag Archives: consolidation
Means to Free Yourself from Debt
Some debts are fun when you are acquiring them, but none are fun when you set about retiring them. Ogden Nash
True to this adage of Ogden Nash, we feel great delighted the moment we obtain cash from a loan. The reason is that we all are able to hold on to ample sums of money to shell out for our needs, and sometimes even for our wants and simple desires in life. But paying off the money we owed is another story. We always find it difficult to set aside huge portions of our monthly earning for the repayment of our debts.
Because of these things, we suddenly find ourselves missing out on our loan and credit repayment. We may also incur late fees that can add up to the burden of repayment. Because of these two reasons, we end up receiving poor credit scores. But, it is by no means too late to repair bad credit histories and retire all our financial obligations. The particular remedies outlined below are a few of the effective means with which we could free ourselves from all forms of debt and credit.
Bad Credit Consolidation Loan
The most famous form of loan intended for people with bad credit history are bad credit debt consolidation loans. These types of loans consolidate or sum up all debts accumulated by a person as a result of unforeseen circumstances, domestic problems and even repayment delinquencies.
Once the total value of the money owed has been computed, together with the interest to be charged on the loan, the final amount will be subdivided into monthly installments that could stretch from one or more years. There are two primary kinds of bad credit consolidation loans: secured and unsecured loans. How do these two types of loan differ from one another? Let us see.
Two Types of Bad Credit Consolidation Loans
Secured debt consolidation loans are loans that have lower interest rates, lower yearly charges, and higher amounts available for loan than their unsecured loan counterparts. The majority of secured loans provide a maximum amount of $150,000 payable in 25 years. The only catch with this kind of loan is that it requires a certain property for collateral, to make certain the repayment of the loan.
On the other hand, though unsecured bad credit consolidation loans have slightly higher interest rates and annual charges, and lower amounts available for loan, as compared to most secured loans. The money loaned needs to be repaid for a maximum period of 10 years. Still, this kind of loan does not require any form of collateral from debtors. Debtors will just be required to process the documents to apply for the loan and after a few weeks 60 days, the applicant will soon receive the amount he or she applied for.
Yes, people have the option of selecting from these two kinds of debt consolidation loans that will help them settle their debts and soon repair their bad credit history. So choose any of these means and eventually you will be able to settle all your debts towards a credit-free life!
How Credit Counselors Can Damage Your FICO Credit Score! (Page 1 of 2)
Credit Counselors and Debt Consolidators are dominating the Internet, newspapers, magazines, radio, and television with ads promising to give you a miracle cure for your poor credit history and your poor FICO credit rating. This appears to be great news. Let’s see if it really is good news.
Of course there are some credit counseling agencies and debt consolidators that can actually help get people out of debt. But there are many such services run by con artists who are after your money, money you probably can’t really afford to spend. And, sadly, they have no intention of helping you.
There are trustworthy companies and shady companies among the hundreds of credit counselors and debt consolidators, and, good or bad, all appeal to your emotional distress to get out of debt. Let’s consider the differences.
The Best Credit Counselors.
These services will actually help you clean up your credit history while improving that all important FICO credit score. They will help you realize where you went wrong with your credit decisions and then devise a plan to start correcting your bad habits.
Once your spending is under control, they will help you create a budget so you can change your money management style and stay out of debt and live a more stable financial life.
The Debt Consolidation Shell Game.
These companies operate with a slightly different agenda and my advice is: You should only consolidate your debts when you have exhausted all other avenues. It’s true that debt consolidators also help you get out of debt, but they do so by making deals with your creditors to combine all of your obligations into one large loan with one monthly payment.
The pitch they make is deceiving. Yes, the payment on the consolidated loan will total less per month than the total of your current payments but, usually, the interest rate on the consolidated loan is high because you are high risk. This means you will end up paying back more in interest in the long run.
Again, avoid debt consolidation and, if you need outside help, go with a debt counseling service instead. They will monitor you and keep you from falling back into the habits that damaged your credit history in the first place. Consolidators, on the other hand, will only be concerned about you making your monthly payments on the new loan for which they collect a fee.
The ‘ Fix My Credit ‘ Crooks!
These crooks are obvious. Any ‘ fix your credit ‘ offer that claims they can magically erase your debt without you lifting a finger (except pay them) is a scam. Think about their claim. Creditors would have to forget you owe them money. Why would they do that? Some of these scams are designed to force you into bankruptcy. Sure, your debts will be gone but the record stays in your credit report for up to 10 years and your FICO credit score will plummet.
How do you find a reputable credit counseling company?