Tag Archives: debt
Credit Card Debt Management Consolidations
Credit card debt consolidation can be of two types consolidating all your debts into one debt, or taking a fresh loan to pay off all the existing debts. Technically the latter type is called debt consolidation loan but the term debt consolidation is often used to mean both methods. One should confirm before committing to either alternative and choose whatever method is more suitable to his/her situation.
Mere debt consolidation is not a loan. It is the process wherein you combine all your credit card debts into a single debt with the help of a professional debt management/repayment program of a financial institution. The representative of the program negotiates on your behalf with the credit card companies regarding your outstanding debts. The duty of the representative is to secure a lower rate of interest and reduction in penalties for late payments.
Instead of paying several separate bills every month you make only one consolidated monthly payment of a fixed amount to the debt manager as if there is only one loan. It is his duty to make the payments to the individual creditors and keep your accounts up to date. The programs will require you to stop using your cards till complete repayment of debts. With the systematic guidance of a professional debt management program you can pay off all your debts in a much shorter time than you expect. The service involves fees for securing all these benefits.
The second type of debt consolidation entails taking a fresh loan to pay off the existing loans. It is the oft resorted measure to pay off the credit card debts. A debt consolidation loan facilitates a fixed rate of interest, lower monthly installments and the convenience of servicing a single loan – instead of coordinating between many debts with different rates of interest. Credit card consolidation service providers or help centers extend the necessary assistance to get the loan.
One should be careful before going for a consolidation loan because more often than not they charge a high rate of interest and generally they are secured loans – unlike credit card debts, which are unsecured debts. A default may result in losing the property given as collateral. Choose only a loan with a competitive rate of interest.
Debt consolidation of either type does not revamp your credit rating overnight. But it can help improve your credit history and ensure a debt free future with careful planning. Also, it protects you from harassment of creditors and the humiliation of filing for bankruptcy.
Bad Credit Bank Loans
Bad credit bank loans are still available offline or over the internet. A bad credit bank loan is money you borrow from a lender for your own individual use. The lending institution can be a bank, investment agent, or private lending company. You’ll be able to apply for such a loan in your local area or on the web. Bad credit bank loans can be used for a number of needs including a vacation, auto repairs, college fees, medical cost, home improvements or remodeling, new business, legal fees, and debt consolidation.
The typical bad credit bank loan maximum is $20,000. The amount of money you are eligible for will depend on the lending institutions guidelines for such loans, your income, and your overall credit score. Cash loans are frequently confused with a line of credit. The major difference between the two is that a cash loan is a lump sum amount of money released to you by the lender. A line of credit is similar, but you have access to funds up to your credit line that you can access all at once or just what you need, when you need it.
Bad Credit Personal loans can be either secured or unsecured. Secured loans mean you will offer the lender some type of collateral that they can collect in the event you don’t pay back the loan. This can be a car, land, or other asset you own. Unsecured loans mean there’s no collateral. The rates of interest for unsecured loans are higher because there is a greater risk of non-payment.
The full term of a personal loan is generally one to five years. The terms of your loan will depend on the lender and the sum of money you borrow. It is important that you read the loan terms before accepting the funds. While a longer loan term will result in lower payments, you will end up paying more for the loan over the life of it due to the amount of interest. Keeping that in mind, only borrow the amount you need for your specific purpose and pay it back as quickly as you can. Make sure the set monthly payment is something within your reach on a regular basis so you are not likely to default on the loan.
The most common use of an unsecured loan is to consolidate other debts. This is a great way to have one monthly payment and reduce your monthly expenses. However, this scenario only works if you are willing to set a budget and live within the boundaries of it. Too often, a person who gets a personal loan to consolidate their debt racks up huge debt again quickly. Then they not only have that debt to pay again, but now they have a personal loan payment to meet each month as well. It is wise to enroll in a debt management course if you feel you may be at risk to continue the cycle of accumulating more debt. These can be taken for free at many non-profit credit-counseling centers around the Nation.
Bad credit bank loans are a great way to get at the money you need quickly. The application process is simple. You’ll generally need to verify employment, income, and residence. The lender will pull a credit check. You will likely still qualify for a personal loan if you have bad credit or no established credit. However, be prepared to pay a higher rate of interest.