Reasons Why You Should Take On a Debt Consolidation Loan

Many people have been told that a debt consolidation loan is the worst thing that they can do because it affects their credit score.

While there is some truth to the credit score thing, it is nowhere near as much damage as continuing to make late payment after late payment.

Even if you are making your payments on time, if your debt to income ratio does not look all that good, your credit score is being affected.

All it would take is one unexpected expense to come up and you would be in trouble.

Another thing to consider is that future lenders do not look just at the credit score as they also look at your individual debts and what they are. For example, unpaid medical bills really do not affect you as unpaid credit cards do.

If a lender looks at your credit report and notices that you took on a debt consolidation loan, they will view it more as you did a responsible thing rather than thinking that you are not a good applicant.

In the end, all of the lenders got paid so it is not like anyone was left out of their money. This is something that they will think about.

So how do you know whether or not you should take on a debt consolidation loan? The best thing to do would be to look at your expenses. Look just not at your monthly bills but the whole picture.

Take a look at how much you are actually reducing your debt each month when you make your payments. Are you really making all that much of a dent in your debt? If not then you are simply making monthly payments to a company in order to continue to be allowed to owe them money. This is not a good thing.

In addition, can you afford the little extras in life that make the days just a little more enjoyable? Can you afford to rent a movie, order pizza on a Friday night or simply spend a little extra gasoline money to take a drive through the countryside?

If not, then you are over extended and you really should look into your loan consolidation options. When you take out a loan for the consolidation of your bills, you will be surprised at how much extra money you will have each month.

Just think of all of the wonderful things you can accomplish with the extra money each month. Many people have found that they have anywhere from one hundred to eight hundred extra dollars each month.

This is a lot of money that can be placed back on your debt to wipe it out faster or you can put all of the extra money into a savings account. Then again, maybe you can finally take your family on a dream vacation.

So step back and take an objective look at your finances. Would you advise someone else in the same situation to take out a debt consolidation loan? If so, then what are you waiting for?

For more information on debt consolidation or for a debt consolidation loan don't hesitate to contact us

Use the Correct Method When You Consolidate Your Debt

No matter what the reason is that you are in looking for help to consolidate your debt, it is a very stressful situation. You might have lost your job, gone through an expensive divorce, become disabled due to an accident, or incurred credit beyond your financial means. To make it all worse, many believe that the only way out is to file for personal bankruptcy.

The optimal way to consolidate your debt is by using equity in your property. When comparing the repayments on a mortgage, with other, short term debt, you will easily see why.

Since mortgage is a secured loan, with your property as security, you will benefit by being able to pay it off over a longer term. And the interest the bank will charge you will be much more beneficial. But, generally you need to have a good credit history to be able to qualify for a second bond.

So, if you are not a home owner, or if you don’t have a good credit history, what can you do?

Granted, sometimes bankruptcy is the only answer, but should be avoided as far as it is possible. It will reflect on your credit record for up to ten years, and can cause additional problems at a later stage.

Others will go to a debt counselor, or choose debt administration to tackle their debt problem. This can be a dragged out procedure, and in the end rather costly. Making use of a debt counselors help means you will go through your budget with him or her. After calculating how much you can actually afford to pay back every month, this amount will be divided into installments to all your creditors.

This means you will make smaller repayments, over a longer period of time. This can sometimes drag out, as the repayments are much less. Also, the debt counselor will charge for their service throughout. This means that the full amount that you pay to the debt counselor monthly will not be used to pay off your debt. The debt counsellor will keep a portion of it for their expenses.

The positive aspect of debt counseling is that your creditors can not take legal action against you, while you are under debt counseling. The downside is that you will not have access to any credit during this period.

Unfortunately there are always individuals who will take advantage of others that are struggling. So if you decide to make use of a debt counsellor’s services, learn your rights first. Also, find out exactly how the will go about it, and what the fees involved are. A little bit of research can prevent a headache at the end.

If you are a home owner, and want to apply for a debt consolidation loan you will have to fill out a short application form. You will then receive a FREE quote from well established, nationally recognized lenders. You do not need to decide now whether the debt consolidation loan is for you.

Just apply and compare the repayments to your current situation. There is no obligation on your part. If you decide that it is not for you, you simply do not have to accept the offer. You have nothing to lose and everything to gain.

Debt Consolidators – What Can They Offer?

When finding themselves in a situation where it is difficult to service all financial commitments, many will turn to a debt consolidator for assistance.

A debt consolidation consultant will help you consolidate all your existing debt into one account. There are many benefits to this, including having only one monthly payment, instead of several. This will give you more control over your finances, and easier to pay off sooner.

Many debt consolidation consultants will use a client’s mortgage as the main tool to consolidate debt. Since a mortgage is the “cheapest” kind of debt available, it is the recommended method. It provides a longer repayment term, and a lower interest rate, as it is a secured loan. This means it will be easier for the client to meet the minimum payments.

Some debt consolidation consultants will make use of unsecured loans to assist with consolidation. Even though these are more expensive than a home loan, they could offer the relief a non-home owner is looking for.

When choosing a debt consolidator it is important to remember that they are performing a service that is in place to help you to get into a better financial situation. You need to be comfortable with what they are offering you, and be sure that you will be in a better financial situation after the consolidation.

Some debt administrators will wrongly call themselves debt consolidation consultants. Since debt administration includes legal costs, debt collection costs, and debt collector’s fees as well as a different procedure, this is very misleading. As the client, you need to make sure what service it is you are asking for.

If you are a home owner, and want to apply for a debt consolidation loan you will have to fill out a short application form. You will then receive a FREE quote from well established, nationally recognized lenders. You do not need to decide now whether the debt consolidation loan is for you.

Just apply and compare the repayments to your current situation. There is no obligation on your part. If you decide that it is not for you, you simply do not have to accept the offer. You have nothing to lose and everything to gain.