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Debt Management for Personal Loans
Personal loans can offer individuals a way to have the funds for an array of uses. Some are necessary while others are for pure enjoyment. It is important that you consider the financial obligation that comes with personal loans. Too often, individuals access money quickly then struggle to repay it. If you dont have a good budget in place you may find yourself unable to make the payments on your personal loan.
An area where many individuals get into trouble with personal loans is debt consolidation. Within a year most people who use personal loans for this find themselves in even worse financial shape. This is because they have not altered their spending habits any. The result is they charge their credit cards up to the limit and now have those payments to make again as well as a personal loan payment. They may soon find they are drowning in the swimming pool of debt.
Enrolling in a debt management plan may be a great alternative for you to help you meet your financial obligations. Most debt management plans involve working with your creditors to reduce interest rates as well as working with the individual to establish a realistic budget and work to change spending habits.
The first step in the process is to do some research on the debt management programs available. Find out how long they have been in business and check for any reports from customers with the Better Business Bureau. Once you have chosen one, call to discuss your situation with them and schedule an appointment. You will need to bring statements for all of your bills as well as verification of your income.
With a debt management counselor you will discuss your monthly obligations. They will work with your creditors to reduce the interest on your debt. This will reduce your monthly payments. You will then make one monthly payment to the debt management agency. They will then disburse the funds to your creditors. You will continue to get monthly statements from your creditors for your records.
It is important that you understand you cant use any of your credit cards that you place into a debt management program. Keeping that in mind, you might want to choose one with a very small limit that you pay separately. You will avoid making any additional charges on that credit card unless it is an absolute emergency. You will want to discuss this with your debt management counselor.
Most creditors are willing to accept the terms of a debt management program because it shows you are accepting responsibility for your debt. They want to recoup the money you owe so this is a very realistic way for that to happen. Most debt management agencies have policies in place about missing payments. Generally, if you miss two payments in a row they will drop you from the program. It is important you notify the debt management agency if you are having difficulties with making a payment.
Obtaining credit is often too easy, yet repaying it can be a struggle you have for a large portion of your life. If your personal loans and other debt have spiraled out of control, contact a debt management program to see if they can help your situation.
What is Federal Modification Loan
I have been asked so many questions regarding federal modification loan. So, here again is a primer for those who are interested in this.
Federal modification loan for homes are made to help those whose houses are in threat of immediate or gradual foreclosure. These are the people whose mortgage is too big that they are definitely having trouble with the payments if they choose to try to stop foreclosure. In short, these are people who will have to give up an arm and a leg to complete the payment. The emphasis on their financial struggle is an important prerequisite to be eligible for federal modification loan.
The program is called “Making Home Affordable” and it was put into place by President Obama. This is expected to give much neede4d aid to the millions of Americans who need to have their monthly mortgage payments rates to be lowered. The questions that most people ask is: does the program have any catch? Most people also want to know what this program does to your taxes and how exactly does it change the monthly payments.
Generally speaking, refinancing plans will leave your credit score unscathed because it will just revise some of the terms in your mortgage loan. The thing that does scathe your credit score is missed payments. If you missed a payment during the year before, then you will not be eligible for federal modification loan.
I had a friend once who was having some problems regarding this matter. He was a very good friend. He had a great wife. She was still young, just around her late twenties. They had a cute 5 year old girl. The guy had it all until he suddenly lost his job because of the recession. The economic downward spiral hit them hard and it hit them without any warning. They were totally unprepared. This was just a new family so they obviously was far from paying their loans. They bought a really nice home near Henderson Nevada, the spot where the big real estate problem first went bonkers. If not for this federal plan, they would have lost so much. The marriage would in all likelihood not have survived at all. Good thing they were able to take advantage of the government plan. You can too if you are smart enough. You just need to make sure that all the necessary requirements are met.
These things happen. It can happen to just about anybody. Do not give in to despair. Rise up, the government can help you but you need to help yourself first and foremost.