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October 18th, 2009:

Debt Consolidation Loans: Paying it All With One

The dream of anyone who is buried in debt is to get rid of all those bills and credit card balances. However, though debt can not magically disappear, you can improve your situation by obtaining a consolidation loan, repaying all your debt and ending up with a single lower monthly payment easily afforded that can save you money and hassles.

The idea is simple, you get a single loan for a fair amount with which you repay all your outstanding debt and obtain all the benefits associated with this procedure. Not only the process is simple but also the requirements needed to get approved for a debt consolidation loan are definitely easy to achieve.

Benefits Of Debt Consolidation Loans

Debt consolidation loans can easily reduce the number of payments you have to do each month. Since the money obtained from a debt consolidation loan is used for repaying all your outstanding debt, then, the only debt left is the consolidation loan which implies a single lower monthly payment each month instead of the multiple payments that you had before which combined were surely a lot more expensive.

The interest rate charged for the money you will owe on your consolidation loan will be significantly lower than the overall average rate charged for your credit card balance payments, cash advance payments, unsecured personal loan payments, etc. Thus, the resulting monthly installments will be significantly lower.

In the long run, a lower interest rate reduces the overall interests paid for your debt. Thus, by consolidating, you will be saving thousands of dollars over the whole life of the loan. If you destine these savings to repaying your debt, you can get debt-free sooner and with less hassles than if you decided to repay your debt as it was.

Requirements And Approval

The approval process for debt consolidation loans is fairly simple. You just need to fill some online forms as most lenders have online sites featuring their financial products. After you submit your application, it will be considered and in a matter of minutes, a response will be sent to you as to whether you have been pre-qualified.

Then, you will be required to submit some documentation backing up your application statements like copies of your pay checks, tax receipts, etc. With this documentation the final loan review will take place and you will be contacted as soon as the loan has been approved. The money will be then made available either in cash or by depositing it into your bank account.

However, if you work with a consolidation agency, they will retain the amount and proceed to cancel all your outstanding debt with it. This is due to the fact that consolidation agencies want to make sure that the money is used for the purpose it was intended to and not for incurring on other expenses.

As to the requirements, you need to have a fair credit and income. Some credit delinquencies can be overlooked but the income requirement is essential. You need to prove that you will be able to meet the monthly payments on your consolidation loan without sacrifices. Moreover, in most cases, to get a low interest rate on your consolidation loan you will need to have equity available on your home in order to secure the loan.

Melissa Kellett is an expert loan consultant who has worked for twenty years in the financial industry and helps people to repair their credit and get approved for home loans, unsecured personal loans, student loans, consolidation loans, car loans and many other types of loans and financial products. If you want to learn more about <a href="” rel=”nofollow”>Fast Christmas Loans and <a href="” rel=”nofollow”>Loans for Bad Credit you can visit her site
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20 Way’s to Decrease Your Debt

1. Pay your bills first: It’s important to put the money aside to pay your bills as soon as you get paid. That way you will be sure to have enough money to pay them. Don’t go out and buy things, not even groceries until you’ve put the money aside for your bills. Most of your day to day expenses are likely to have some flexibility in them, you can limit how much you spend on coffee a day or buy a less expensive cut of meat, but the power company wants all their money.

2. Make your payments on time: Every late payment can hurt you, and in more than one way. Many utility companies report your payments to the credit reporting agencies, so ahistory of late payments can hurt your credit score. It also costs you more if you pay late. Late fees may be small but when you’re working on reducing debt, every dollar counts. Three dollars a month in late payment charges on three bills works out to over a hundred dollars a year.

3. Write down what you spend: Managing and paying down debt is all about taking control of your money. You can’t control what you don’t know, so it’s important to keep a journal of how much you are spending and what you’re spending it on. Do it before you make your budget and you’ll be able to see what you really do spend money on, rather than guessing and coming up short because you forgot to account for something when you wrote up the budget.

4. Know your credit report: Your credit report is your scorecard in the fight against bad credit. If you don’t know where you stand it’s hard to move forward. Most countries let consumers see their reports for free at least once a year. Take advantage of this, you might find a debt on there that you already paid which wasn’t reported to the agency. Reports of unpaid debts can really hurt your credit, so it’s important to make sure those are accurate.

5. Pay creditors who report to agencies first: Some creditors report each payment you make to credit reporting agencies, while others only report information if they send your debt to an outside collection agency. If you have to postpone one of your bills past the due date, it’s always better for your credit score (all else being equal) if you pay the one that reports regularly as it will have the biggest impact on your credit score.

6. Pay your bills when you have the money: don’t wait until the due dates: A lot ofpeople think the due date on a bill is the day you are supposed to pay it, not the day by which the creditor wants to have received the money. Paying bills as soon as you get paid removes the temptation to take some of the money back to spend on something else. Once it’s gone, so is the temptation to take the money and spend it elsewhere.

7. Ensure your creditors notify credit agencies when bills are paid: If you do have unpaid bills, it’s important not only to pay them but also to make sure those payments are reported to the credit agencies, otherwise those payments won’t help repair your credit. Talk to the creditor about this, and if necessary don’t hesitate to follow up with the credit reporting agency yourself.

8. Always pay something: Even if you can’t pay all of your bills at one time, always make a payment of some kind on each bill. This not only shows your good faith to the creditor by proving that you are not ignoring the debt, but it also reduces the amount you’ll have to pay when the next bill comes due. If one month is hard to pay now, two months will be harder to pay in future. Making partial payments helps reduce the effect of late payments piling up on each other.

9. Make a budget: Budgeting is an important part of controlling your money. It helps you see the big picture and gives you a plan with defined steps to focus on. It moves the what of reducing your debt and improving your credit into a plan of attack. Budgeting is the how of debt reduction, it’s where you write down the plan you’re going to follow to get your finances under control. You have to start somewhere, and budgeting is a good place to start.

10. Save your pennies and other coins: It’s amazing how much money we carry around as loose change in our pockets, and it’s money we often don’t think of as money. Half the time it gets spent on a candy bar because we’re bored rather than anything one needs. Turn it into an asset by dumping your change into a jar every night once you get home. It’s amazing how fast it will add up, and that’s money that can be used for emergencies, or to pay down a debt that suddenly jumped to the top of the pile.

11. Communicate with lenders: This is one many debtors ignore. Your creditors only want your money, and most of them are more than happy to work with you so long as they get their money in the end. The catch is that you have to keep them in the loop. Telling them what’s going on and offering payment plans helps convince them that you’re not planning to default on the debt. Yes they want their money, but that doesn’t mean you have to put them in an adversarial role.

12. Know your rights: Both debtors and creditors have rights, but creditors are usually much more aware of their rights than debtors are. Knowing your rights gives you as a debtor a way to deflect harassing collection calls and a measure of control in the situation. It also lets you tell when an overzealous collection agent is making threats they can’t back up.

13. Set goals: Every task needs milestones, something to let you feel you’re progressing and prevent the enormity of the situation from becoming overwhelming. Repairing yourcredit and reducing debt is no different. Setting manageable goals like paying off one credit card within a year will help keep you focused and moving forward on debt reduction. If you’re looking to build credit, getting a credit card within a year is a good goal. It doesn’t matter what the goal is so much as making sure it’s attainable and working towards it.

14. Leave some money for extras: No matter how much debt you’re carrying, always make sure to put some money in the budget for extras and entertainment. Yes there are free alternatives to entertainment, but never having money for treats such as a five-shot Mocha, a night at the movies or a new book or CD is sure to frustrate you and get you off your budget. Put in some money, not a lot, but enough so that you can treat yourself on occasion and it will be a lot easier to stay on your budget.

15. Pay cash: Don’t buy things with the swipe of a card if you can avoid it. Pay cash before using debit or credit. The thing about debit and credit payments is that the expenditure is invisible so you don’t really notice how much you’re spending. If you pay cash you have a much better feel for how much money you are spending which lets you keep more control of your money.

16. It’s not a good deal if it’s more than you can afford: How many times have you gone into a store and seen a ten-pound bag of something at only twice the price of the two poundbag? It may be a great deal, but it’s not always a good buy. Remember, you’re still spending more money, and that has to come from somewhere. Also, if you’re not going to use it all before it goes bad you might find you’ve bought ten pounds and thrown away eight- and then you’re wasting money. Buy based on your needs, not just how good the deal looks.

17. Pay off high rate cards first: If you’ve got two credit cards that you need to pay off, take the one with the higher interest rate and pay it off first while making the minimum payment on the other card. Interest is lost money, so the faster you pay off the card with the higher interest the more debt you’re losing for the same amount of money spent. Even a 2% difference in credit card interest rates can make a huge difference.

18. Consolidate your loans: Loan consolidation is a great tool if you have access to it. If you can get all your debts combined into one monthly payment you’ll often find you’re paying everything off much sooner. Not only will a bank often give you a lower interest rate than credit cards, which means more of your money is going to reduce the debt rather than just service it, but making a single payment is usually cheaper than writing out half a dozen checks every month.

19. Cut up your credit cards: An important part of getting out of debt is making sure you don’t incur more debt, and this is where cutting up your credit cards comes in. You can’t cancel the account before you pay it off, but cutting up the card makes you that much lessable to use it, especially if the CVN on the back isn’t on your statement. Then you won’t even be able to use it online. Part of taking control is reducing temptation.

20. Ask to have your credit limit lowered: Credit cards are useful to have, but it’s important to stay out of trouble when using them. One way to keep control of your credit card spending is to keep a low limit like $500 on the card to make it that much harder to get into trouble. If you get a card with a high limit and are concerned you’ll run it up and not be able to pay, call the company and see if you can get the limit lowered to something you can keep ahead of.

Stephan Clingman: writer, webmaster, knowledge seeker. I’ve been on the web for a number of year’s and have learned valuable SEO lesson’s thru trial and error. The web is an ever evolving entity that you must keep up with if you are going to survive.Pay Off My Debt
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Credit Card Debt Information and Help

You’ve probably heard the frightening statistic that the average American owes more than $8,000 in credit card debt. Fortunately, that statistic isn’t completely accurate. Here are true credit card debt info and statistics.

Average Credit Card Debt The average credit card debt is actually around $2,200. This is still a lot of money when you consider that the average income is $48,600, but it’s not a dire figure.

However, only 45% of Americans have credit card debt. 23% of Americans don’t even have credit cards. The remaining 32% pay their credit cards in full every month. 8.3% owe more than $9,000 on their credit cards.

If you carry a balance on your credit cards, you can become one of the 32% who doesn’t. Although it seems challenging with rising fuel and food prices, resolving to cut back on your spending can make a real difference in your ability to pay debt without truly restricting your enjoyment of life.

Total Consumer Debt Info You may be wondering how these statistics are derived. They’re derived in part from the Federal Reserve’s Survey of Consumer Finances, which is conducted every three years.

As of June 27, Americans had a total of $2.46 trillion in consumer debt, but this figure includes mortgages, auto loans, student loans, and other non-revolving debt. Revolving debt, which is usually credit card debt, was only $904 billion. While this figure is still high, it’s not the devastating figure you’re more likely to hear on the news.

What Can You Do? If you’re one of the people with revolving debt, you might be wondering how you become one of the people without it. It’s not easy, but it can be done. The key lies in learning to control your spending. American society doesn’t make that easy because our economy relies on spending, but if you have the willpower to do what’s right for your personal finances, you can do it.

There are three basic steps to controlling credit card use:

Avoid buying things you want, but don’t actually need. Food is a need. Dinner in an expensive restaurant is not. Shoes for your children are a need. $200 designer sneakers your child will grow out of in three months are not. Transportation is a need. Unless you live up a steep, unpaved road, a $40,000 SUV is not. Impulse purchases are usually wants, not needs. Wait at least two weeks before buying anything. If you still want it after two weeks, it might be a need, or it might simply be something you really want. If it’s something you need, buy it. If it’s something you really want, buy it only if you can afford to pay cash without limiting your ability to pay off debt or save for retirement. If you’re still paying off your credit cards, avoid buying things you want, no matter how much you want them. Once you learn to control your spending and differentiate between needs and wants, you can pay off debt more quickly. Soon you’ll be one of the 45% of Americans who pays off their credit cards every month, and you won’t be contributing one dime to the $904 billion in revolving debt.


Justin has more than 5 years experience as a financial adviser, his key areas are loan consolidation, debt relief, mortgages etc.
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