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Loan Refinancing: Debt-freedom or Debt-slavery?

Many loan agents promote home loan refinancing as the path to debt freedom. Refinancing can be either a way to reduce your debt, a way to reduce the amount of your monthly payments or a cheap source of finance. However, depending on your home loan terms and the new loan conditions, refinancing can contribute to reducing or augmenting your debt.

You need to be extremely careful when considering refinancing since it is a very complex financial operation and there are many variables involved that if not considered carefully, they can affect the results turning the financial transaction into an extremely onerous decision that may increase your debt against your will.

Daily Finance Eased

Refinancing your home loan can alleviate your daily finances. By refinancing your home mortgage with a longer repayment program and / or a lower interest rate, you can lower your monthly payments and thus, the amount of money you destine towards debt payments will be considerably reduced.

However, this does not always come at no-cost. If you get a lower rate and a longer repayment program, you may be saving money but you will have to be indebted for a longer period of time. If you get a higher rate and a longer repayment program, you may get lower or higher monthly payments depending on the intensity of the increments and you may also get some ease for your finances but you will also be attached to the loan for a longer period of time. Only an equal loan term and a lower interest rate can save you thousands and not oblige you to a loan for longer periods.

Long Term Commitment To Mortgage Payments

The opposite of the above is also true. If you want to hasten the date where you will finally be debt free, you will have to compromise your income to debt ratio. Shortening repayment programs will raise your monthly payments as a higher rate would do. This can be compensated by a reduction on the interest rate but this cannot always be achieved.

By refinancing for shorter repayment programs you will be affecting your income since you will have to destine higher amounts towards debt payments. So, when it comes to refinancing, you will need to ponder all and reach equilibrium between all these variables so you do not extend your debt-slavery too long and you do not affect your income to debt ratio either.

The Right Path Towards Debt-Freedom

What you need to do is reduce your overall debt and since home loans are the cheapest sources of finance, it is wise to extend the repayment programs (even if the rate goes up) because by lowering the installments you will be able to use the surplus to repay other debt. Of course, this requires discipline on your behalf since a chaotic credit behavior will worsen your situation.

If you can get approved for a cash-out refinance home loan, you will be able to use the extra money to cancel outstanding and more expensive debt which will contribute to achieving debt freedom sooner. Remember, exchanging your expensive debt for cheaper financial sources is the smartest and most intelligent thing to do.

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="http://www.speedybadcreditloans.com/bad-credit-personal-loans.html” rel=”nofollow”>Quick Loans For Bad Credit and <a href="http://www.speedybadcreditloans.com/unsecured-loans.html” rel=”nofollow”>Unsecured Personal Loans you can visit her site http://www.speedybadcreditloans.com/
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Debt Consolidation in the Perspective of Debt Negotiation

Debt consolidation versus debt negotiation are two options that are available to you if you need debt assistance. When your monthly bills become too much for you to handle, it makes sense to use debt consolidation or debt negotiation for solving debt and credit problems.

Debt Consolidation

Debt consolidation services have prearranged debt repayment plans with most credit card and collection companies. When you sign up with a debt consolidation company you are offered a lower overall monthly payment based on a lower interest rate they have arranged with the creditor.

This payment is lower than what the credit card companies offer you, saves you money every month and is often the best way to consolidate debt.
One benefit of a debt consolidation repayment plan is it will stop you from getting harassed by your creditors as long as you make the new, lower monthly payments.

The downside of the debt consolidation repayment plan is that you have to cancel all credit cards that you include in the plan. You are also charged your first payment you make toward the program and an additional monthly administration fee. This administration fee ranges from flat fees of $10-$50, while others charge a $5 fee for each creditor. That means you’ll pay about $30 a month that doesn’t go to paying off your debts.

The debt consolidation program benefits you if you have high interest rates or have higher credit card bills than you can manage. Some people like to make only one payment to one company for all of their debts.

Debt Negotiation

Is sometimes referred to as debt settlement. This is most often offered to people who can’t handle a debt consolidation program. If you can’t make the minimum payments of a repayment plan or haven’t made payments in the past 3 months, a debt negotiation program is the next step for solving debt and credit problems.

One benefit of a this program is you stop making payments to your creditors. The debt negotiation company either takes monthly payments from you and keeps it in an account, or lets you keep the money in your own account.

While you are making these monthly payments to the debt negotiation company, they negotiate with your creditors for a lower payoff of around 40-50% of your total amount of debt. Once the negotiated settlement is agreed upon with your creditors, the debt negotiation company makes a one time payment to them.

A downside of this program is, it lowers your credit score for as long as you are in the program. However, most debt negotiation companies require the creditor make the credit report show paid in full so it doesn’t show up as a negative on your report once your account is settled.

Some debt negotiation companies include a credit repair service that will remove the negative items caused by the debt negotiation program. You pay for this service as part of their program.

Now that you have an idea what debt consolidation versus debt negotiation is choose which one will work best for solving debt and credit problems for you.

Christians Debt Solutions Can Change Your Life

Christian debt solutions can help a Christian to avoid bankruptcy through negotiations and consolidation of financial obligations. Some of the services they offer can teach you to learn to live within a budget. In cooperation with creditors you can work to lower interest rates and reduce the principle. The work of credit recovery involves the consolidation of invoices, and learning what the word of God says regarding debt- “No one should have nothing but love for a debtor,for who loves another has fulfilled the law”(Romans 13:8).
Negotiation of cash below a balance includes less interest. Consolidation can lead to a lowering of interest rates and a monthly payment of lessl instead. Credit Repair can help to improve your credit ratings, so that lenders offer lower interest rates and interest. A Christian debt repayment plan can help their finances in accordance with the churches teachings.
Consumers who are in financial difficulties need to pray and ask God to help them successfully manage the debts and to avoid future debt once all their bills are paid. You should consider a solution of the debt as a Christian solution to financial problems. In today’s world there are several options for those who need help. There are many companies including Christian Debt Solutions. The children of God often seek help from the companies listed on the word of God, the ethics and are honest and trustworthy. Those who pray for you are the kind of friends who to go ask for help.
Unexpected help sometimes occurs when life places the children of God in situations that are undesirable and stressful. Society encourages consumers to spend. Poor money management overruns good intentions. To many, the credit card offers great value and convenience. Most consumers apply for credit cards and find debt in a few months, which was created by a person that was employed and a good consumer. Once interest rates begin to climb and they become unemployed then is almost impossible to pay the bills. Other things that can contribute to the financial downfall can be higher house and car payments, fuel and the increase inliving costs and try to pay phone bills, cable bills, utilities. A Christian debt solution can be a good starting point for the search for answers on how to deal with creditors and reduce debt related stress.
One of the first things that most people think when they have financial difficulties is they don’t want to be left in bankruptcy. Chapter seven bankruptcy allows a person to cancel their debts including interest. Before a consumer can declare bankruptcy, he or she has to attend a class of consumer credit in a certified course. A certificate on completion of the class must be brought before the court. Bankruptcy can be very expensive, a lawyer must be retained and legal expenses must be paid. After the failure may be on the debtor of the credit report. This will be remembered as a public register of seven to ten years. A Christian debt solution can offer consumers a range of options for dealing with financial problems, so that he or she is not required to file for bankruptcy.
The Regulation and negotiating skills are necessary for dealing with financial obligations. Companies such as christian debt consolidators offer these services. Some creditors go to work much earlier to solve some of the problems to help the debtor avoid filing for bankruptcy. Companies will work in close collaboration with many creditors to negotiate a settlement for less than what is actually owed. In addition, the lender agrees to put an end to all fees and interest. Settlementscan be anywhere from 40% to 75% of what is actually owed. If the customer can furnish a lump sum to be paid immediately in an agreement to accept a lesser amount. It may include the negotiation of an agreement, in which the debtor pays monthly until the debt is completely paid in full. The important thing to remember is that this type of agreement requires that the customer must be ready to ensure that the payments are made on time or creditors may not honor the agreement.
Learning to live by a budget is essential to overcome the problems caused by poor management of money. A Christian debt solution employs professionals who understand how to create a budget for the customer, so that he or she will change their buying habits. The customer must be ready to write all the expenses and track every cent and budget all revenue and total debt. If the person has less than is in the budget he or she must do without in order to save elsewhere. Spending too much on food means less money for other things like entertainment.
Consolidation of debt is another service, which can help consumers pay for the purchase of a loan. Saving for a monthly payment and no more. We hope that the interest on the loan will be much lower while the debts are being paid off. When the monthly payment is significantly less, it is easier to manage getting the total debt paid off. You could apply for a second mortgage if there is enough equity, or you can use a credit line to pay the bills. Real estate property loans tend to have lower interest rates compared to personal loans. Christian debt consumer solutions provide valuable information to make the best decision and may provide the maximum benefit in the long run.

BJB: A Rule To Rule Your Debts

It is essential that you get in control of your finances from an early stage – but does that mean not having any debt? When is it right to take out a new loan?

Quite often when I speak to people in debt I find that they didn’t know what they should or shouldn’t borrow money for. They could benefit from this simple but very powerful rule for their personal finances. It allows them to plan, feel in control and not resent their debts. Quite often it is the feeling of not being in control that gets people down.

This nice simple rule has worked for me for years and helps to decide what you can and cannot afford, when it is right to borrow and when it is not.

It draws from my economics background and my professional accountancy training – but despite that it’s very simple!

Accountants talk about things such as “amortisation” and “useful economic lives”. This means that if you buy an asset such as a building or piece of equipment the cost gets spread over several years – over its “useful economic life”.

Economists have a different language (you may have noticed!) and they talk about ‘utility’ – ie the satisfaction you get from consuming a particular product or service.

But what has this got to do with debts and loans?

Well my simple rule comes from both of these concepts combined.

The result is what I call the rule of “Benefit-Justified Borrowing”!

Of course being an economist at heart, I shorten this to the “BJB” rule.

So what does it mean? Quite simply this: only borrow money to fund something that will continue to give you some satisfaction or benefit over the life of the loan that is funding it.

In other words borrowing should only be justified by the benefits that will flow to you in the future from what you have purchased.

Think of it like this – you are buying a reservoir of satisfaction, benefit or enjoyment that will last for several years and this is the reason that you can justify a loan to fund it. To the economist you are deferring your consumption and you are deferring the funding of it. A perfect match!

That’s all a bit abstract – so let’s look at some examples:

Buying a house – it’s unlikely that you can pay cash for it – so you have a mortgage. This fits the BJB rule because you will derive benefit from living in the house over the life of the debt.

Furniture – let’s say that a piece of furniture will last you for 10 years and you fund it by a loan. Again this fits the BJB rule very well. The next question is how long the loan term should be. You could choose to have a loan over any period up to 10 years, although in reality you would probably want it to be less than 10 years – as it would be sensible to take into account what the furniture might be worth in the future. If it was likely to be worth nothing after 5 years then this would be the sensible maximum term of the loan.

Vacations – this is a great example. Many people go on vacation and thoroughly enjoy it but then have expensive credit card debts for months afterwards. This is where the resentment can kick in – you get to a point where you are desperate for the next vacation but can’t afford it as you are still paying off the last one! This is depressing – and cancels out the original enjoyment!

If you follow my BJB rule you will never fund a vacation with debt because when you are paying off the debt you are no longer getting any satisfaction or benefit from the purchase you have made – the vacation is over.

This is where good old-fashioned discipline comes in – save up first for things that do not have a future benefit.

Imagine you have followed the BJB rule. You are going on vacation, knowing that it is all paid for, with cash in your pocket in accordance with the budget you have set. You can go away with a clear conscience to enjoy a relaxing break – and then when you come back there is no debt hanging over you to pay off!

The last example is your usual day to day living costs. You will hopefully realise that this would not meet the BJB rule! It should never be funded by debt. If you are building up long term debt to fund your day to day food and living costs then you urgently need to address this issue and should seek some help and advice without delay.

So does this rule mean never use a credit card? Not at all – short-term loans can have their place – but it does mean only use it when you understand how you will pay off the debt.

So like all good rules the BJB rule has this one exception. Occasionally it is necessary to use short-term debt such as a credit card to get over temporary and short-term cash-flow difficulties. Life rarely goes according to plan and you may just be a month away from having completed your savings plan.

A good example is back to the vacation – clearly it would be ridiculous to cancel it because you were short of savings by one month! Using a credit card means that you don’t have to have saved up every last penny before packing your cases.

However using a credit card should be in the context of a solid plan to pay off your debt within a couple of months of your vacation. You have already mentally spent that money for the next month or two.

Clearly this exception to the rule is about a small shift in timing and is quite different from building up medium to long-term debt that is not benefit-justified!

So from now on follow the “Harper BJB rule” and match the debt to your enjoyment and you shouldn’t resent a debt again!

Copyright (c) 2006 SimplifyLoans.com

Debt Consolidation Loan: What is this Program?

A debt consolidation loan program combines traditional debt negotiation with a debt consolidation loan so the borrower can get a reduction on his debt via negotiation while at the same time getting lower rates and a single and lower monthly installment with a repayment schedule suit for his budget.

Debt Negotiation

When you fail to repay a loan, the minimum payments on your credit cards or even regular bills, you usually incur in penalty fees and extra interest rates that contribute to a continued growth of your debt. Creditors tend to increase the amount that is owed to them by these means because they have additional costs when you fail to repay but also because they know that eventually they may be forced to resign a portion of the money, thus by increasing your debt they make sure to get as much as possible.
However, since this is a common practice among lenders, borrowers can easily fall into a debt trap with all those penalty fees and abusive interest rates. Debt consolidation agencies provide expert negotiators that know exactly how to deal with creditors and can agree with them a solution to your debt problems. If you have to file for bankruptcy, then they won’t be able to recover but a small portion of their money, so they are more than willing to show flexibility when a negotiator gets in touch with them.

Agreements can reduce your debt by up to a 60%. The main reduction is obtained by eliminating the interests charged over the debt’s principal and the capitalization of interests. Sometimes you can even get a reduction on the principal itself. And though it is not a reduction, you can get an ease on your debt by rescheduling the loan payments into longer repayment plans.

Debt Consolidation Loans after Negotiation
Once a reduction on your debt is achieved you can get even better terms by applying for a debt consolidation loan. The money you get from the loan will be used to cancel outstanding debt so you’ll end up with a single and lower monthly payment. By doing so your debt won’t be a huge burden anymore and you will afford the installments without making sacrifices. There is however, a limitation that you should be aware of.

Secured and Unsecured Loans

Unsecured Consolidation Loans cannot be used to consolidate secured debt. If you have different kind of debt you must resort to either a unique secured consolidation loan to cancel all your debt or an unsecured consolidation loan to consolidate unsecured debt and a refinance loan in order to consolidate secured debt like mortgage loans and home equity loans.

Not All Debt is Bad

So you are in debt-who isn’t these days? We live in a society that encourages people to go into debt. Credit card commercials tell us that a trip to Jamaica is just what we need, regardless of whether we can afford it. (That’s what your gold card is for, right?)

Loan brokers want us to borrow up to 125 percent against our home equity. Even the federal government just had its first balanced budget in a generation and now faces the enormous task of paying off over trillions of dollars in debt.

Yet not everyone is in debt. Many people know how to deal with money. Their debts are manageable, and they have money in the bank. That sounds nice, doesn’t it money in the bank? That is what you deserve. In order to get there, however, you are going to have to change some of your thinking about money and learn a few new methods of dealing with it.

Why Are You in Debt?People who are not in debt think about and treat money differently than the rest of us. They know a few things about money and debt that escape the rest of us. Let’s call them the “financially literate.” If you can begin to relate to money as they do, you will be well on your way to a life that is not only debt-free, but also prosperous. What we hope to do in this book is to show you some of their secrets so you can adapt a few of these ideas and tools to help you get out of debt.

Do not feel too badly if you are not good with a dollar, a lot of people aren’t. Money literacy is not taught in schools, and too often parents are too busy trying to dig themselves out of their own financial hole to help much either. Yet, unfortunately for many of us, we learn more about money from our parents than anywhere else. The good news is that learning how to get out of debt and become more financially literate is not all that complicated.

The first step in the process is to figure out how you created so much debt, because if you don’t figure out how and why you got yourself into this pickle, you might get out of debt, but you certainly won’t stay out. So the first question to ask yourself is: Why did you go into debt in the first place?

Sometimes going into debt is unavoidable, but often it is not. When money is tight, you have several options; going into debt is just the easiest. Instead of choosing more debt, you might have decided to work overtime and make more money, or possibly you could have tightened your belt and spent less money. Debt was not your only choice.

There are many reasons people go into debt: some are good reasons, and some are bad. It doesn’t matter. Did you buy luxuries you could otherwise not afford? Did an illness or a divorce set you back financially? Was debt your way of dealing with some other sudden, unexpected expense? When you look at the reason why you went into debt, the important thing is to notice whether your spending habits follow a pattern. If you can see a pattern, you need to address that pattern as much as the underlying debt.

Consider Mark and Diane. They both make a good living: he’s a psychiatrist, and she’s a psychologist. They have two kids to whom they are devoted. They send both to private school, which costs a total of $15,000 a year, and both kids go to summer camp. This expense adds up.

Mark and Diane don’t buy luxuries, they don’t travel much, and, except for the kids’ expenses, they are very frugal. Yet the only way they can pay for everything is by going into debt. They use their home equity line of credit and credit cards to stay afloat. Although they would like to move to a less expensive neighborhood, they can’t because they have no equity in their home, so they are stuck.

What are they to do? If they are going to get out of debt, something in their lives is going to have to change. The private school is going to have to go, camp may be out, or they are going to have to start making more money. The same is true for you. If you want to get out of debt, you are going to have to identify why you went into debt and change that behavior or pattern.

Good and Bad DebtDebt in and of itself is not a bad thing. Both of us (the authors) were able to start our own businesses because of debt; Steve began his own law practice, and Azriela began her own entrepreneurial consulting business. So we understand what debt is and why some debt is great debt.

Debt allows you to do things you otherwise normally could not do, such as start a business, go to college, or pay for a home. Debt constructs buildings and funds investments and entire corporations-even the government is funded by debt. The trick is to foster debts that help the cause and banish the ones that don’t. Not all debts are bad debts.

Good DebtDebt that helps you, enriches your life, is manageable, and is not a burden can be called good debt. For example, student loans are good debt if they enabled you to get through school and further your life goals. They are bad debt if you dropped out of medical school after one year to become a writer. A good debt helps; a bad debt hinders. We want to help you get rid of that bad debt.

Other examples of debt that may be considered good include:1. Home loans. A mortgage can be a great debt. Not only does it permit you to own your own home, but it also allows you to build home equity. People who are financially savvy earn interest and equity. People who are not financially savvy pay interest and create money for others. For example, charging groceries means that you will pay about 17 percent interest on items that will be consumed within a week. A financially literate person would never do that.

2. Car loans. A car loan can be a fine debt because you get something long-lasting out of the debt. If you need a nice car for your job (if you are a real estate agent, for example), a car loan may be considered good debt because it helps you in your career. However, a car loan that you cannot afford is a bad debt because it detracts from your life.

3. Business loans. If you can service the loan, and it helps you make more money, the loan is good debt, but if the loan is nothing but a source of problems for you, the debt is bad.

4. Credit cards. Credit cards are fantastic. They are convenient and easy. They can help finance a business or even medical emergencies. The problem with them, as you probably know only too well, is that it is too easy to fall under their siren spell and get in over your head before you know it. That’s when they begin to hurt your life more than help it.

Bad Debt BluesHow do you know if your debt is good debt or bad debt? Easy. Bad debts cause stress. You sleep poorly because of them. They cause fights and foster guilt. Supreme Court Justice Lewis Powell was once asked to define obscenity. Hard-pressed to come up with a definition, Powell uttered the famous line, “I know it when I see it.” The same could be said for bad debt: You know it when you see it, and it certainly can be obscene.

Bad debt seems impossible to pay back. You create bad debt when you charge things you don’t need or when you borrow for things that you consume quickly, such as clothes, meals, or vacations. The things quickly disappear, but the debt has a nasty habit of sticking around, seemingly forever. Bad debts can become very bad debts because of interest and penalties. For example, if you buy a CD player for $200 and don’t pay it off by the end of the year, and your credit card company charges a usurious 20 percent APR (20 percent per year), you owe $220 by the end of the year. If you do this with five items, you owe $1100, and that’s a lot of money.

Money TalksTight for money? Here are some simple ways to save a little extra: Don’t use ATMs at other banks and avoid $2 user fees; cancel your movie channels on cable and save about $20 per month; put all of your change at the end of the day in a jar and save about $50 a month; hold a garage sale and make about $200; cancel your cell phone and save $50 a month.

You can create bad debt when you agree to pay these crazy interest rates that some creditors charge, because the debt seems to grow exponentially. Credit cards are the prime culprit, but they are by no means the only one. High interest can also come with personal loans, business loans, or unpaid taxes.

You know what the bad debt dance looks like, anyone reading this book does: New bills are coming in before you’ve cleared out those from last month. You’re surprised to find that the phone bill is still unpaid. Somehow the dentist was never sent his check. You know what past-due notices look like. Your Visa and MasterCard bills include late payment penalties. The hardware store sends a letter telling you you’re past due and requests that you send a check at once. There is more month left at the end of your money, and payday seems far away. Worst of all, these things don’t surprise you anymore.

Avoidance is a common coping mechanism to deal with a budget that doesn’t balance. The problem is, it can create even more problems than you already have:

Your property could be repossessed. The finance company can come take your car. The electronics store can come take its TV back. You could get sued. If that happens, your wages could be garnished, or your bank account could be levied upon. Imagine your surprise when you go to get that $1,000 out of your checking account to pay your mortgage and you find that it has been seized by one of your creditors.

A lien can be placed on your real estate. Failure to pay a bill now means that a creditor can get a judgment against you and force you to pay it later when you sell your house, only then you will pay it with 10 percent interest per year.

Loss of services. You could lose your insurance or your utility services if you avoid paying those bills.

Yet, as much as you have been avoiding the problem, the truth is that your debts are neither crushing nor hopeless. They are simply a problem-one for which there is a solution. But no one ever eliminated a problem until he or she recognized and admitted that there was a problem. You began to do that the moment you read this articles. As you read it, you will need to begin to formulate a debt-reduction plan that will work for you. As you do, you need to determine which debts are necessary and which are not.

Debts You Want to KeepSteve, one of the authors of this book, is a bankruptcy attorney. One day, an old acquaintance named Bill came into his office and said that he needed some help getting out of debt, but he also wanted to avoid bankruptcy if at all possible. They talked, came up with a plan of action, and Bill went on his way. About four years later, Steve ran into Bill again and asked how things were; Bill relayed the following story.

Bill had $30,000 in credit card debt and was behind two months on his mortgage when he left Steve’s office. That day, Bill finally decided that something had to change. He wanted to pay everyone back, put some money in savings, and keep his house. His mortgage was his largest, and favorite, debt because he loved his house.

Bill’s first order of business was to prioritize his debts. Wanting to save his house, Bill called his lender and found out that it had a program that would enable him to roll his mortgage arrears onto the end of his loan. He was therefore able to keep his most important debt and focus his energies on getting rid of the debts he didn’t want anymore.

Bill put together a credit card repayment plan. He started living a bit more frugally, making some extra money by moonlighting, and paying more on his credit cards than the minimum. He was diligent, but not always perfect. Although it took him several years, he finally did get out of debt. He also kept his house and even created a little nest egg. Bill did it, and you can too.

Debts to Get Rid OfIf you want to prosper financially, there are plenty of debts that you will want to wipe out. The most obvious are those where you are paying high interest and penalties, things such as credit cards, lines of credit, taxes, or any other debt that is much higher than inflation. In this articles, you will see how to formulate a plan that will enable you to get out from under these burdensome debts. But as you contemplate this plan, you also need to prioritize certain debts and pay them on time:1. Rent or mortgage. Make paying your rent or mortgage a top priority. Payments on a home equity line of credit or second mortgage are also essential because you can lose your house if you don’t pay.2. Car payments. Make the payments. If you don’t, the car will be repossessed.3. Utility bills. These services are important, and the bills usually have heavy late payment penalties.4. Child support or alimony. Not paying these debts can land you in jail.5. Taxes. Taxes may be put off for awhile if necessary, and we show you how to do so later on in the book, but if the IRS is about to take your paycheck, bank account, house, or other property, you should set up a repayment plan immediately.

The First Rule of Holes: Stop Digging!The goal of this articles is to help you get out of debt within the context of making your life work. You will not be asked to make radical, unreasonable changes in your life because doing so rarely works. Instead, important, sometimes gradual, small but significant changes can make a big difference.

If you are going to start getting out of debt, you have to stop going into debt. One way to start is to begin to wean yourself from the credit card teat if you think that is part of your problem. You don’t have to cut up all your credit cards; that would be impractical and unreasonable. Start slowly, but build up to it and get strong. You can do it. The only way to stop going into debt is to stop going into debt. You might as well start now because the sooner you start, the sooner you will get out of debt. The longer you wait, the longer it will take.

We will show you how to easily trim your budget (well, almost easily) so that you need not incur more debt to stay afloat. But begin now. You are going to have to stop sooner or later. Down the road you will see that this is one of the most important steps you can take in getting out of debt. You will thank yourself for this gift. Remember the first rule of holes: Stop digging!

Long-Term GoalsNow is the time to begin to think about your long range financial vision. What is it you hope to accomplish by getting out of debt? Changing some habits?

Paying off your MasterCard? Probably what you really want is a less stressful life, one that’s free from money worries. But you can have even more. Getting out of debt is one thing, but prosperity is another thing altogether.

You have read this once already, and you will read it again in this book: If you don’t begin to do some things differently, to change the way you think and treat money, you might get out of debt, but you won’t stay out of debt. If you do make some simple changes to your thinking and your behavior, not only will you get out of debt, but you also will get ahead. You will get what you deserve: a life of abundance.

The Least You Need to Know1. Going into debt for essentials makes financial sense; doing so for nonessentials does not.2. Not all debt is bad debt.3. You may want to keep debts that enhance your life and get rid of the rest.4. Stop adding to your debt right now.5. Cultivate a long-term plan of action.

www.Citicredit.asia offers comprehensive guide to credit reporting, including information on repairing or rebuilding your credit history.

 

 

 

 

 

www.Citicredit.asia offers comprehensive guide to credit reporting, including information on repairing or rebuilding your credit history.
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Advice for Deciding When to Consolidate Student Debt

When consolidating student debt, the loans principal won’t be modified. Nevertheless, you’ll be able to save thousands of dollars on interests and reduce your monthly payments by extending the loans length. Moreover, consolidating at a fixed interest rate will let you keep the same monthly installment amount through the whole life of the consolidation loan.

That being said, consolidating student debt is not always worth the trouble. Only if you can obtain a substantial reduction on your debt or if you can make your monthly payments more affordable you can say that consolidating student loans is appealing enough. In order to determine this you may want to follow the following tips:

Consolidating during the grace period

Be especially careful not to consolidate during the initial grace period unless the consolidation loan includes another grace period or you can do without it, because otherwise you will have to start paying your debt right away. Grace periods usually last between 4 months and a year. During this period, the borrower is not required to start paying off the loan. The main reason for this benefit is that the graduated student might need such a time to find a job and get used to a new lifestyle.

Interest Rates

If you can get a lower interest rate than the average of all your outstanding loans, that would be great. However, you’ll probably get an interest rate just a bit higher than the average interest rate of all your student loans. The reason why you would want to consider consolidating even with a higher interest rate is that the length of your loan will be extended and the loan installments reduced. Besides, the interest rate will be locked so if market conditions worsen you would still be paying the same amount, as opposed to federal student loans which rates

fluctuate with the market.

Contact government agency for cancellation
Prior to consolidating your federal student loans or other government loan, you might want to contact the government agency that issued the loan. It is possible to fully cancel the loan without reimbursing the money if certain requirements are met. Since you have nothing to loose, before searching for a lender to consolidate your student debt, make sure you can’t get the government to condone the whole or part of the debt. After consolidating, you won’t be able to apply for this kind of government forgiveness.

Set aside special loan programs

There are certain loans that you might want to maintain with its original terms. There are loans where the government pays for the interest and you only pay for the principal, others where the loan can be renewed upon cancellation or even before. If you consolidate this kind of loans with the rest of them you’ll loose this special attributes. So make sure you won’t have use for them before rushing in. There is always time for consolidating, so you might as well make a conscious decision on this matter.

How To Get Out Of Debt

Every year consumer debt in the UK increases and so more and more people are asking themselves the question how do I get out of debt?. At this point it may seem like an impossibility which is why this article provides some very sensible guidance to help you get your-self out of debt and the financial nightmare that you are presently in.

Currently interest rates are low due to the low state of the bank of England base rate. This has encouraged people to take on more and more credit in the belief that these debts are affordable. What this actually means is that at present even those people that think they can afford the repayments of credit may begin to struggle should interest rates begin to rise which is what they are predicted to do shortly according to leading experts in this field. If however, you are already struggling with your debts the situation is only likely to get worse.

Today is the time to begin to think about how you are going to get out of debt and build an action plan to reach your goal of making yourself ‘debt free’.
Congratulations! The very fact that you are reading this article means that you have made the first step to facing the problem and getting rid of your debt. Make no mistake your credit is your debt. You should begin to call it this as this will help you to realise your situation.

How bad is your debt situation?
The next step is to build a table of your current financial situation. List on the left hand side all your monthly incomings including your wages (after deductions like tax and national insurance), benefits, rent and any other income you have. Next on the right hand side list all your monthly outgoings apart from your debts. This should include your mortgage, rent, bills, food expenses, car or travel expenses, insurance, childcare and any other outgoings that you have. Now deduct your total outgoings from your total incomings and the figure that you have is your ‘maximum disposable income’ (MDI). Next write down all your debts and your monthly repayments. This may be scary but the sooner you face up to these and acknowledge these the sooner you can begin to do something about it. Now compare your total debt repayments to your maximum disposable income figure (MDI). You will find yourself in one of the following three situations;
1) Your MDI figure is more than your monthly debt repayments.

Should you find yourself in this situation you should consider increasing your debt repayments. Do not increase them to more than your MDI figure or you will be over committing yourself. However, by increasing your repayments you will pay off your debts sooner and so will pay less overall interest. This is far more cost effective that putting this extra money into a savings account.

2) Your monthly repayments exceed your MDI figure.
If you are in this situation you will be in a ‘state of increasing debt’. This is a worrying and scary place to be. You are probably struggling with your repayments which are likely to be causing you significant stress. If not, you are perhaps only at this stage realising the situation you are in. Don’t panic as this is the time when we will begin to recontroll your finances effectively. Often those in this situation resort to drawing cash on one credit card to make minimum payments on another. This is what we call ‘robbing Peter to pay Paul’. STOP! This is not effective management of your finances don’t kid yourself. In fact what you are doing is making the situation worse. Credit card companies charge high fees for withdrawing cash from cards. You are also paying interest on this money twice. You are therefore getting yourself in more debt and this will snowball your finances further out of control. Let’s have a look at how to turn this around.

3) The two figures are more or less the same.
Don’t for one moment congratulate yourself. You are in debt. You are just about managing to make your repayments. You need to ask yourself some of the following questions;
* Where is money going to come from to deal with emergencies? Your credit card is not the answer.
* How would you cope if interest rates rise? This will increase all your repayments.
* What would you do if child care costs rise.
* What would you do if your travel costs increase train, petrol and insurance prices?
Any of your outgoings could and probably will rise. Wages don’t tend to rise at the same level as rising interest rates. They mostly tend to get left behind with inflation. You could soon find your self in situation number 2. You are effectively walking a tipe rope and need to get yourself on safe ground.
Let’s have a look then at how you can improve your situation with the following guidance.
Guidance Increasing your income
* Ask for a pay rise. If you don’t ask you won’t get!
* Consider working more hours or doing regular overtime.
* Look for a promotion or to change jobs to higher paid employer.
* Look for a second job to supplement your income.
* Claim every state benefits as you can call the benefit enquiry line on 0800 88 22 00.
* Consider a lodger a great source of additional income to the household.
* Sell any unwanted items. This could be through a car boot sale or over the internet on www.ebay.co.uk or www.amazon.co.uk/marketplace
*
Guidance Reducing your outgoings
* Reduce your food bill by buying stores own branded products instead of more expensive brands.
* Use supermarket vouchers and coupons and take part in their award schemes.
* Cut down on takeaways these are expensive and unnecessary.
* Take a packed lunch to work. This is far cheaper than buying lunch from the local sandwich shop every day.
* Give up smoking this will save you a small fortune.
* Cut down on child care costs by asking friends and family to help.
* Switch utility providers. Shop around for the cheapest deals on phones, electric, gas and water it costs nothing to change suppliers.
* Set up direct debits. This can gain you substantial discounts particularly with utility companies.
* Shop around for insurance you will be surprised at the savings you could make.
* Ask yourself ‘do you really need all the things listed on your outgoings list?’. Cancel things like gym memberships. It is a lot cheaper to pay for the facilities at your local authority leisure centre when and if you use them.

Guidance credit cards

There are two main credit reference agencies in the UK. These are Experian and Equifax. You can write to these and request to see a copy of your credit file. Under the Data Protection Act you can ask to see any information companies have on you at any time. These two agencies normally ask you to send a £2 cheque for administrative purposes with your request for the file. Go through your file carefully. If there is incorrect information on the file about you there is an appeal process you can follow to get this information removed. You can also ask that notes be entered on your file therefore giving explanations to issues that show on the file. Visit their websites for more information.
If you have exhausted the above advice and guidance and you are still struggling with debt you may find the following contacts useful;

Debt Consolidation is Possible for Non-Homeowners

There are different ways of consolidating debt and even without the aid of a consolidation loan, a debt reduction of up to 60% is easy achievable. There are professional negotiators that can agree with your creditors new repayment programs along with reductions on the interest rate you pay for your outstanding debt and sometimes even a cut on your debt’s principal.

Debt Consolidation Agencies

Before contacting a debt consolidation agency you need to be aware of what they are capable of doing and compare that with your financial needs. Using the services of a debt consolidation agency is a decision to be taken as last resort. Once the fact that you’ve got into a debt consolidation program is reported, your credit history will reflect this and your ability to get finance will be considerably diminished.

However, if your current bills, loan installments, unpaid credit card balances and all other debt have become an unbearable burden, then a debt consolidation program might be your only chance to avoid other more extreme measures like bankruptcy.

A debt consolidation agent will be assigned to your case. He will gather all the information available about your credit, your outstanding debt, your income, your assets, etc. and with that information he will design a plan. He will contact your creditors and negotiate with them. Since your creditors want to get paid, they’ll agree more flexible conditions and they will resign to charge high interests on your debt. They know now that if a consolidation agent is taking care of your debt chances are that if they don’t cooperate, they might get nothing.

There are mainly two different options after negotiation. You may obtain new repayment schedules with lower rates and lower monthly payments you’ll be able to afford or sometimes the agent agrees with the creditors a reduction on the whole amount of debt in exchange of immediate cancellation of their bills, balances and loans. If the agent takes this second path, he probably has arranged for you to get approved for a consolidation loan. The money obtained will be used to repay the new negotiated debt and you’ll end up with a single monthly payment: The loan installments.

Consolidation Loans

With the aid of a debt consolidation agency, it is much easier to get a consolidation loan in order to cancel your debt. The lender knows for sure that the money will be used to repay and cancel all your debt. Probably, the agency will arrange for the money to be directly transferred to the creditors. The lender will then be your only creditor which lets him in a privileged position when it comes to recovering his money if he has to take legal action in order to do so. And that is the main reason why with the help of a consolidation agent non-homeowners can get approved for debt consolidation loans too.

Is Non-Homeowner Debt Consolidation Possible?

There are different ways of consolidating debt and even without the aid of a consolidation loan, a debt reduction of up to 60% is easy achievable. There are professional negotiators that can agree with your creditors new repayment programs along with reductions on the interest rate you pay for your outstanding debt and sometimes even a cut on your debt’s principal.

Debt Consolidation Agencies

Before contacting a debt consolidation agency you need to be aware of what they are capable of doing and compare that with your financial needs. Using the services of a debt consolidation agency is a decision to be taken as last resort. Once the fact that you’ve got into a debt consolidation program is reported, your credit history will reflect this and your ability to get finance will be considerably diminished.

However, if your current bills, loan installments, unpaid credit card balances and all other debt have become an unbearable burden, then a debt consolidation program might be your only chance to avoid other more extreme measures like bankruptcy.

A debt consolidation agent will be assigned to your case. He will gather all the information available about your credit, your outstanding debt, your income, your assets, etc. and with that information he will design a plan. He will contact your creditors and negotiate with them. Since your creditors want to get paid, they’ll agree more flexible conditions and they will resign to charge high interests on your debt. They know now that if a consolidation agent is taking care of your debt chances are that if they don’t cooperate, they might get nothing.

There are mainly two different options after negotiation. You may obtain new repayment schedules with lower rates and lower monthly payments you’ll be able to afford or sometimes the agent agrees with the creditors a reduction on the whole amount of debt in exchange of immediate cancellation of their bills, balances and loans. If the agent takes this second path, he probably has arranged for you to get approved for a consolidation loan. The money obtained will be used to repay the new negotiated debt and you’ll end up with a single monthly payment: The loan installments.

Consolidation Loans

With the aid of a debt consolidation agency, it is much easier to get a consolidation loan in order to cancel your debt. The lender knows for sure that the money will be used to repay and cancel all your debt. Probably, the agency will arrange for the money to be directly transferred to the creditors. The lender will then be your only creditor which lets him in a privileged position when it comes to recovering his money if he has to take legal action in order to do so. And that is the main reason why with the help of a consolidation agent non-homeowners can get approved for debt consolidation loans too.

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