The Finance Blogger

How to Apply for an Unsecured $30,000 Consolidation Loan

October 21st, 2016 ernie Posted in Debt Consolidation No Comments »

how to apply for an unsecured $30,000 consolidation loanIf you are wondering how to apply for an unsecured $30,000 consolidation loan, it is actually quite easy. First of all you need to gather all of your personal financial information together, since the loan officer will need this. Next you need to decide which lenders you will apply to. You should apply to at least 3 to compare interest rates and terms. This is one of the best ways to secure a competitive rate in addition to maintaining an excellent credit rating. Apply at the bank you normally deal with as well as at several online companies that provide loans. Stick with well known lenders to avoid any scams that may be offered.

How to apply for an unsecured $30,000 consolidation loan

You will need evidence of all of your current mortgages, loans and credit cards along with the balances on each. You should also have a pay stub with you that shows your gross pay along with any deductions that are automatically taken from your pay. Finally you will need a copy of a recent bank statement that shows your regular withdrawals.

The bank statement is needed for several reasons. It should be the account that the loan payments will be with drawn from and will show the account number, bank number and branch number. It will also show if you have any checks written when there was insufficient funds in your account. They are looking for a good record of managing your finances.

BY applying to several lenders, and also letting them know that you are comparing, you should get a competitive rate. This is by far one of the best ways to get a competitive product.

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Debt Consolidation Relief – $10,000 – $80,000

May 7th, 2016 ernie Posted in Debt Consolidation No Comments »

Debt Consolidation Relief - $10,000 - $80,000Consumers looking for debt consolidation relief in the $10,000 to $80,000 are in luck since these limits are usually within the range of what many people can afford and what lenders are willing to consider. This assumes of course that your credit rating is at decent levels. That it is not in the tank due to poor payment commitments and overdue loans. Some lenders will demand that they pay the debts off using the funds that they are advancing to you. They do this to ensure that the money is actually used for what it was intended for. They do not want the money spent on other things and you still owe the original debt. There should be nothing wrong with this approach. Since your asking for the loan in the first place for debt consolidation.

Debt Consolidation Relief – $10,000 – $80,000

Many consumers are carrying thousands of dollars in credit card debt for example. They are paying 19% interest on the overdue balance. There is a good chance you will save a great deal of money if you ask for and get debt consolidation relief. A debt consolidation loan at a reasonable interest rate can save you thousands of dollars in interest.

The fastest way to repay that debt is then to take the interest you saved and apply it to the principle that you owe. You will be surprised at how fast you can pay off the loan when you apply the money you are saving to the loan in addition to the regular monthly payment. Try it, you will be amazed.

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Debt Consolidation Loan for 5K 10K 20K For Bills

March 30th, 2016 ernie Posted in Debt Consolidation No Comments »

Debt Consolidation Loan for 5K 10K 20K For BillsDebt Consolidation Loan for 5K 10K 20K For Bills. Whether you need a debt consolidation loan for 5k 10k or 20 k for bills, it is your credit rating that is going to determine if you can get a loan and how much you will pay for that loan. Consumers with a good credit rating over 600 will have no problems getting a loan for those amounts at competitive interest rates. Below 600 and above 500, your credit rating is going to start giving you problems. There will be fewer lenders to loan money to you. They are just not willing to take the risk of lending you money. If they do lend you money, they will demand a higher interest rate. They may also charge fees that are quite hefty.

Debt Consolidation Loan for 5K 10K 20K For Bills

Once you have a credit rating below 500 it becomes very difficult to find a lender willing to lend money, let alone negotiate the rate and terms. You may also be restricted on the amount that lenders are willing to lend, with many leaning towards lower amounts.

Consumers who have various bills that they want to consolidate would be better off to focus on paying those bills down as fast as possible, curtailing their spending and working towards improving their credit ratings. Loans for debt consolidation are also more difficult to obtain if you do not have any equity to provide.

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Debt Consolidation Relief Plans in the United States

March 14th, 2016 ernie Posted in Debt Consolidation No Comments »

Debt Consolidation Relief Plans in the United StatesThe first thing that consumers should be aware of is that debt consolidation relief plans in the United States are never free. There is always a cost of some kind in terms of fees, interest charges and impact on your credit rating. Yes, there are companies that will negotiate a lower amount for you to repay, but this comes at a cost. There is a dollar cost to this in addition your credit rating will take a long-term hit. The best approach by far is to consolidate your debt and then repay it as quickly as you can. If you do need debt relief, hiring a company to negotiate on your behalf with your lenders can reduce the amount you owe. But it is relief, not elimination and that is another point that many consumers are surprised about.

Debt Consolidation Relief Plans

Debt consolidation relief plans in the United States also include various levels of bankruptcy. Including protection from your creditors while you get your act together and develop a plan on how to repay your debt.

True debt relief will hold your creditors at bay while you find a job, get reestablished etc. But you will still need to repay your debt. This is by far the best solution compared to bankruptcy. It takes many years to remove this stain from your credit rating. It also means no loans or mortgages until you have successfully reestablished your credit.

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How Can I Consolidate My Debt – Car Loan, Credit Cards, and Court Fines

March 7th, 2016 ernie Posted in Debt Consolidation No Comments »

How Can I Consolidate My DebtWe all have debt like this, a car loan, credit card debt, a mortgage or rental payments, and maybe even court fines. We wonder How Can I Consolidate My Debt when I have all this money that I owe. How will I ever get ahead of the monthly payments? Or in some cases how will I even meet the monthly payments? This is a serious problem for many people. Especially if they are paying credit card interest rates on any debt associated with the debt on the credit cards.

How Can I Consolidate My Debt

The first step is to take stock of all of the debt that you have, the total amount owed, the monthly payments, and especially the interest rate that is being charged on each. If you can reduce any of the loans or debt to zero, do it now since that will immediately improve your cash flow. Many experts suggest that you should repay the highest interest debt first and in most cases, you should. However, if cash flow is an issue, this is the next best thing to do.

Once you have this information, you will know how much you need to borrow to repay everything. Next, meet with a loan officer to determine if you are eligible for a consolidation loan. They will address the basic question of whether you are eligible or not. They can also tell you how much money in interest charges you will pay and how much you will save each month. If your interest rate is lower, your cash flow is going to improve making more money each month available to repay your loans.

If your credit is bad, you may have to search further to find someone who will help you consolidate your debt. Before you proceed always compare your total interest costs to your existing payments before you make your final decision.

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Best Debt Consolidation for Consumers

March 1st, 2016 ernie Posted in Debt Consolidation No Comments »

Best Debt Consolidation for ConsumersThe best debt consolidation for consumers is to never get into debt in the first place, but since this is not realistic we will explore other means. Our approach is to list a few debt consolidation techniques and depending on your own situation you may find that one or more of these will work for you. The reason that we are taking this approach is that consumers have a variety of incomes, debt levels, debt payments, interest levels on debt and of course their credit ratings will vary as well. If your credit rating is not good for example, finding a lender to lend debt consolidation money to you will be almost impossible and if they do the interest rate and fees will be high.

Best Debt Consolidation for Consumers – Solutions

The following are steps consumers can take to get their debt under control. Use these singly or in combinations as appropriate for your situation:

  • Always meet your monthly payment requirements to maintain credit rating
  • Use extra money to repay high interest debt first
  • Take out a low interest loan to pay off high interest debt
  • Do away with credit cards
  • Avoid new debt until existing debt is fully paid
  • Ask entire family to pitch in to decrease monthly costs and pay off debt
  • Use equity in your home to secure a low interest mortgage and pay down debt
  • Never make a purchase on a credit card if you cannot pay in full at the end of the month
  • Reduce the number of credit cards you have to no more than two
  • Talk to your creditors and explain how you will meet your debt load
  • Never miss a payment
  • Never declare bankruptcy
  • Take an extra job
  • Take a serious look at your monthly expenses and make reductions
  • Develop a budget and balance your expenses to your income

There are potentially lots more. But if you are going to take debt consolidation seriously, these items above are at the top of the list. Most people are looking for a quick fix answer. Unfortunately there are none, especially if you want to keep / improve your credit rating.


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Loan Consolidation vs. Debt Relief Program – Pros and Cons

February 21st, 2016 ernie Posted in Debt Consolidation 3 Comments »

Loan Consolidation vs. Debt Relief Program - Pros and ConsIf you have several loans, perhaps a mortgage or even credit card debt, you could find relief through loan consolidation or even a debt relief program. Before you jump on one of these solutions consider Loan Consolidation vs. Debt Relief Program. Evaluate the Pros and Cons to select the best solution for your situation and needs. They are not the same and they have different costs as well as impacts on your credit rating.

Loan Consolidation vs. Debt Relief Program  – Pros and Cons

Loan consolidation means that you take all of your current debt, loans, credit card debt and mortgage and combine it all in one low interest loan. check the math and the results to make sure that your monthly payment is lower and that the total amount of interest you will be paying is also lower. the objective is to end up with a more reasonable monthly payment, lower interest costs and the ability to repay your total debt more quickly.

Debt relief programs involve renegotiating your total debt as well as potentially consolidating your debt. Some debt relief programs involve pressuring the lender to lower the amount owed, which can also impact your credit rating. The Creditor company may agree to a lower amount, but they will also report your inability to repay the total debt to the credit rating agencies.

While you might owe less money and you may have a lower monthly payment with lower interest rates / costs, your ability to borrow money in the future will definitely suffer.

In addition, these same companies often charge a hefty fee to arrange the debt relief program. Once you do all of the calculations it might not be worth your while to pursue this option. Instead, paying off the original debt and negotiating a debt consolidation loan could be the right answer.

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Credit Card Consolidation vs. Debt Relief Program – Pros and Cons

February 7th, 2016 ernie Posted in Debt Consolidation No Comments »

Credit Card Consolidation vs. Debt Relief Program - Pros and ConsCredit card consolidation vs. debt relief program – pros and cons is a large subject that troubles many consumers who are dealing with debt from credit cards and wondering if there is any way out of this financial nightmare. Consolidation of your credit card debt is definitely a good thing to do, especially if you can negotiate a low interest loan. A loan like that will lower your monthly payment, it will lower the total amount of interest you pay each month and you will be able to repay your debt much more quickly. almost anyone can meet with a lender and negotiate a loan and negotiate a better deal.

Credit Card Consolidation vs. Debt Relief Program  – Pros and Cons

Debt relief programs on the other hand entail reducing the total amount of debt that you currently owe, lowering the payments, interest rates etc. Sounds good right. You got something for free and did not have to pay for all of it. However there can be a down side to a debt relief program.

First of all a debt relief program involves negotiating a lower balance owed with your creditors. Some companies will strong arm these companies. While successful in lowering the total debt, they can do irreparable harm to your credibility, to your credit rating. They often charge a hefty fee for their services. At the end of the day, you owe less money, but your credit rating drops and you have to pay them. Is this a good deal.

For some it might be a good deal, but you have to crunch the numbers. Also assess if it really matters if your credit rating tanks. As long as you are not applying for a loan, a car loan or a mortgage in the next 5 to 10 years you probably will be ok. Think twice about going into debt and also about using a debt relief program.

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Consolidation Debt Loan

November 21st, 2013 Debt Posted in Debt Consolidation No Comments »

Consolidation Debt LoanConsolidation Debt Loan, secured and unsecured personal loans along with mortgages on homes are really the only types of loans. All the other names are just marketing names. Lenders use them to entice consumers to come to them and borrow money. For example car loans are secure loans for people buying cars. Personal loans are unsecured loans that can be used for just about anything as long as you can get approval. Payday loans are also unsecured high interest loans that unfortunately many people use. They pay a very high interest rate on these loans.!

Lower interest rates can be obtained by people with the best credit ratings and with something placed as security. For example cars and homes are used as security for mortgages and loans. Low credit ratings and no security carry the highest interest rates. That assumes you can find a lender willing to lend you the money! These typically are payday loan lenders and other unscrupulous lenders that charge very high rates of interest.

Consolidation Debt Loan

One payment is usually the main benefit of consolidating debt. If you happen to consolidate credit card debt into a low interest personal loan, then the monthly payment will also be lower. You will be paying a great deal less interest than you would to the credit cards. One payment a month is much easier to handle for many people. As well since it is less complex and less danger of missing a payment due to forgetfulness.

Refinance your mortgage. Use the proceeds to consolidate your debt on personal loans and credit cards. The result is usually much less interest payable. Also a lot lower monthly payment in total since your interest rate is lower. The amortization is a lot longer which gives a much lower monthly payment.

Lower Monthly Payments

Longer amortization usually means two things. First the monthly payment is lower since you are taking a longer time to repay the loan or mortgage and the amount of principle that you repay on each payment is lower. Secondly the interest rate is usually lower on a mortgage, but the total amount of interest you pay will be a lot more in total simply because you are taking longer to repay the loan or mortgage.

Lower monthly payments are great especially when you have a lot of bills to pay each month. However it will take you longer to repay the loan and it will mean that you pay more interest in total. Any time you can repay a loan in total and get out from paying a loan or mortgage, you will be saving money which can be used for other things.

Better cash flow can be attained with lower monthly payments as well and sometimes this is really what is important. When you have a lot of other bills to pay each month, anytime you can improve your cash flow most people are probably better off. If you do have extra cash from time to time, throw it on the loan and reduce your principle so that you pay less interest and you repay your loan more quickly.

Close credit card accounts to improve credit ratings and to also reduce the chances of using them and getting yourself into a debt consolidation situation. Most people should only carry one credit card for daily use and one for backup purposes. Any others should really be closed.

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Debt Loan Consolidation

November 7th, 2013 Debt Posted in Debt Consolidation No Comments »

Debt Loan ConsolidationDebt and loan consolidation is extremely important for people who are trying to get their financial affairs back in control. If you have a loan for the car and a couple of credit cards max’d out. Or personal loan and a mortgage, then just maybe you are in need of some debt consolidation.

What is Debt consolidation?

Basically, a consumer who has a lot of debt such as credit cards and personal loans with relatively high-interest rates can consolidate the debt into one personal loan. With a term that lowers the monthly payment due to a longer-term and a lower interest rate. You want to be able to pay less interest than you were before to save you money and put more in your pocket for other things or to just reduce your debt even further. When you take out a personal loan, there are two types.

The first is a non-secured loan and the second is a secured loan. A secured loan usually means you can obtain a lower interest rate which will reduce the amount of interest you pay. You must provide something as collateral for the secured personal loan to secure it, such as your home. A non-secured personal loan is totally open and you must have an excellent credit rating for the lenders to lend money to consumers for a totally open unsecured loan.

What are Typical interest rates?

Credit cards will carry interest rates as high as 21 % for most cards and up to 29% for many other store-type cards when you carry a balance on your account past the end of the month. These high-interest rates can add a lot to your monthly payment.

Personal loans and mortgages are down around the 3 to 5% range which is very affordable at this time. There is a rumor that in 2014 interest rates will go up so be careful on how much debt you take out.`

Car title loans have recently been getting a lot of attention along with payday loans and other types of loans that people take advantage of when they have no credit rating or cannot get a loan through regular lenders. These types of loans are all over the map in terms of interest rates with the worst being upwards of 300% per year or 25% per month. This is atrocious and far too high. Anyone taking out a loan at these rates is being robbed and paying far too much in the way of interest. At these rates, a consumer will never repay their loans.

Can I consolidate my Debt on My mortgage?

The answer is yes, however, there are some requirements. You must have sufficient equity left in your home to accommodate the increased amount of the mortgage. You must have a good to the excellent credit rating and a source of income to support the increased payments for your new mortgage.

In addition, there will be legal costs, appraisal fees and there will be administration costs. It would not make sense to increase your mortgage for a thousand dollars for example and have to pay all of these costs. Increasing by ten thousand or more would be more reasonable.

Whenever you can consolidate your debt and obtain a lower interest rate as well as lower monthly payments, most people should try to take advantage of this approach.

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Loan Consolidation

October 7th, 2013 Debt Posted in Debt Consolidation No Comments »

Reducing ExpensesLoan consolidation is one way to reduce the overall amount of interest that you pay and make more money available for you to pay down debt. Consolidate your loans and credit card balances into one payment. Your total payment will be lower. The amount of interest that you pay on your debt will also be lower. This is really fantastic when you save money. Most people however are just not facing up to their debt issues. They are not taking action about the problem when they know they should be doing something about it.

Credit card Debt and Loan Consolidation

Most credit cards are at a 20% interest rate or close to it. While store credit cards can be as high as 29%. Car title loans and payday loans can be as much as 300%. Although some groups are trying to pass laws to bring them down to a maximum of 36% which is still very high. Either way, these are prime candidates for loan consolidation. Significantly reducing the amount of interest you pay if you find the correct low-interest loan consolidation product.

Loans are much lower. Depending on your credit rating and whether you use your home as security you can get interest rates for consolidating your debt as low as two or 3% today. Interest rates are forecasted to rise. However, even if they go to 5%, they will still be significantly lower than the high rates for credit cards, etc.

Lower Monthly Payments

Another advantage of consolidating your debt is that you will also have a lower monthly payment. With a high-interest rate credit card, the interest component of your monthly payment is a significant amount compared to the value of the monthly payment. A personal loan at two or 3% has a much lower monthly payment relieving some of the stress and pressure on your cash flow.

The extra money can be used for any number of things. Financial advisers will recommend that you take this extra money and use it to pay down your loans even further. This will reduce your overall cost of borrowing money. If you can repay the loan quickly you will end up with a much better cash flow. Since you now have a loan payment that is no longer needed.

Other consumers will use the money saved to pay for things they have been delaying for some time simply because their money was so short. This is definitely ok. However we strongly urge consumers not to drive up the balances on their credit cards once again. If you do, now you have the loan consolidation payment as well as the credit card payments to make. This can get pretty difficult. Consolidate your high-interest loans with a low-interest loan. Then cut up those credit cards or put them somewhere you cannot easily get them. You really want to remove the tendency to utilize them.

Try to focus on repaying all of your loans to avoid paying too much interest and consolidate your loans to reduce your overall interest cost and monthly payments.

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Consolidation Debt

August 21st, 2013 Debt Posted in Debt Consolidation No Comments »

Consolidation DebtMany consumers carry a great deal of high interest debt and just by consolidating debt that they have they can save a great deal of interest cost and reduce their monthly payments as well. Consolidation of debt is one of the smart money steps that can be taken by consumers. It is financially smart and relatively easy to do as well. Secured mortgages is one way to consolidate debt with very low interest rates and save a bundle.

Carrying a Balance on Your Credit Card

Consider the person who is carrying a balance on their credit cards and paying 19% or more on this unpaid balance. Everything that is charged to the account as long as you are carrying a balance costs money. Consider consolidating this debt into a mortgage that is secured with the equity in your home. You may be able to lower the interest rate to less than 4% at the time of writing. It will depend on the credit rating you have and the lender that you are dealing with.

Let’s assume that you have equity available in your home. Also the lender is willing to increase your mortgage or add a second mortgage to your home. The interest rate for this mortgage will be much lower than the rate charged on your credit card. Consumers may have to pay for an appraisal fee to establish the value of the home. They may have to pay for legal fees to register the mortgage. Some of the processing costs and charges associated with the mortgage may also need to looked after. When you compare these costs with those of what you would pay in high interest charges most people will come out ahead of the game.

Consolidation Debt – The Real Challenge

The real challenge for most of us after we have rearranged all of our debt is to not resume the same pattern. We need to avoid charging large amounts to our credit cards. Eventually if we are not careful we will end up with unpaid balances on our cards again. There is no question that credit cards are a convenient way to pay for various items, but if we cannot pay the balance at the end of the month the cost of those items is just going to increase.

Following a guideline that essentially says I will use my credit card as long as I have the money in my bank account to pay for what I am charging to my credit card will prevent the purchase of a lot of items until we have the cash and ensure that an unpaid balance is not built up. Most of will find this difficult to follow, however it does work if you practice this approach. You will likely never be in a position to need to consolidate debt again.

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Consolidation Loan

August 7th, 2013 Debt Posted in Debt Consolidation No Comments »

Consolidation LoanCarrying a lot of debt, particularly if it is high interest credit card debt can be a serious problem for many consumers. With high interest rates, come large monthly payments and large interest costs. These kinds of debts can be brought under control with low interest consolidation loans. They focus more of your money on paying off the loan instead of paying interest. We will illustrate with a few examples. This will help our readers understand why it is important to pay off these debts with a low interest consolidation loan. But first there is no sense in taking this step of consolidating your credit card debt. If you are only going to reload your credit cards once again. Now you may not be able to consolidate your credit card debt a second time.

Consolidation Loan – Credit Card Debt

Let’s assume that you have a credit card that is charged up to the maximum of $5000. The interest rate is 19.5%. We will assume that you will take 5 years to repay this amount and you just keep paying this high interest rate. In addition we want to keep this simple. We will assume that you have seen the light and will not charge anything in addition to the credit card.

Your monthly payments over five years at 19.5% will be $122.92. You will pay a total of $2,477.66 in interest costs during this five year period. This is quite a bit considering the amount that we are talking in terms of what you need to repay. It is almost half of your principal. You will pay a total of $7,477.66 over the five years if you do not charge anything in addition to your credit card.

Consolidate Your Debt

Now if you arrange for a consolidation loan at a lower rate of say 10%, with the same term and the same total amount. The monthly payment will be $103.08 a savings of $19 a month. The total interest charges will be $1,270.59 for a savings of over $1200! This is quite a bit of money. Many people can use this kind of money including paying off the loan that much quicker.

If you were to find a lower interest consolidation loan to consolidate your debt, the payments would be even less and the savings even greater. It is also helpful to have one payment per month rather than have to remember to pay all of your loans every month plus your credit cards. By consolidating all of your debt into one easy low interest loan, you have one payment to make and the interest rates is much lower as well saving you money. The money you save could be put on the debt as well and you get to pay off your loan that much more quickly saving even more money in terms of interest cost. Something to think about.

On our next post will discuss consolidating your debt using a secured loan or a secured mortgage which has some of the lowest interest rates going.

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Consolidation of Debt

May 21st, 2013 Debt Posted in Debt Consolidation No Comments »

Consolidation of DebtEvery person and every couple at some point in their lives needs to think about consolidation of debt. This is debt that they owe to other people and companies. It is usually in relatively small amounts. They need to bring it together into one loan. Usually at a lower interest rate compared to other debts that they have.  The usual culprits are credit cards. But sometimes it is a combination of car loans, mortgages, personal loans. As well as credit cards that you may use every day. Consumers usually use credit cards for their every day expenditures. In addition to larger purchases that they may buy from time to time.

Consolidation of Debt – Interest rate on Credit Cards

Credit cards are great tools as long as you can repay them at the end of the month. Not so much if you trigger interest charges on any unpaid balances. If you do they are going to charge you 18% to 20% on the unpaid balance. This is really were consolidation of debt can pay off. Consolidation can save consumers a lot on money in terms of interest charges. You are still going to have to repay the balance. But while you do you will be charged a lower interest rate after consolidation of your debt.

Combining your credit card debt into one low-interest loan will decrease your monthly payments, lower the interest that you are paying and provide you with some relief in terms of your cash flow. You should be able to focus the extra cash flow on repaying your debt that much more quickly. Some people will remortgage their homes and consolidate their debt into a new mortgage payment at a low-interest rate. Not only do  you save money in terms of the interest that you pay, your payments on a monthly basis are also much lower since they have been amortized over a longer period as well.

Consolidation of Debt – Improve Credit Rating

This is a win win situation for all concerned and many people benefit from consolidation of their debt every day in this manner. It is also interesting to note that taking this step can also improve your credit rating since you have less debt instruments charged to you and your potential  payments are less as well.

Your bank manager or bank loans officer can help you with a consolidation loan, however there are more and more online lenders offering consolidation loans as well. We suggest you be very careful with  these sites and providing a lot of private information until you are sure you are dealing with a reputable site. There are just too many sites that collect personal information and then resell it to be used in creating fraud situations. If you are concerned about this deal with the old brick and mortar banks to obtain your debt consolidation loan. Consolidation of debt should cause your total monthly payments to decline and this step should also mean you pay less actual interest to the credit card companies.

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Debt Collection

March 21st, 2013 Debt Posted in Debt Consolidation No Comments »

Debt CollectionHave you ever had a debt collector come after you for debt collection? The writer has for a rather surprising event that took place in our lives. We had to use a hospital that was out of state. We were unfamiliar with their procedures relative to billing. All of the insurance information was provided when we checked into the hospital.  During our stay we had x-rays. Also a number of other tests that needed to be completed to diagnose what the problem was. Each test is billed separately and invoiced separately which was a big surprise to us.

Separate Businesses Not Passing Information for Billing Purposes.

Little did we know that the hospital and the x-ray department were actually separate business entities within the hospital. The hospital did not pass the insurance information along to them. Six months later  someone coming after us by phone for debt collection. The amount was only $250, however the x-ray department deserves to be paid for the services they provided. But what a surprise when you receive an automated call for debt collection. You have no idea what it is for.

We hung up on the automated caller five or six times. Then decided that they were not going away so we had better deal with this. We accepted the call and were connected with a debt collector agent who rudely explained the problem to us. From his perspective we were deadbeats who were not paying our bills. Once he understood that he was not going to get paid unless he provided us with the information needed to get our insurance company involved, he was much more polite.

Debt Collectors have a Tough Job, but Do not be Rude

These guys have a tough job to do with debt collection activities. They do run into a lot of people who really do not want to pay their debts or possibly do not have the money to pay what they owe. Talking to rude people who have no interest in talking with you is a tough job in my books anytime. Never the less, once he found out that he would be able to collect, and just had to provide the proper information he was fine.

Debt Collection Can Take Many Forms

The example we discussed was relatively simple compared to many situations. Sometimes just finding the person who owes money can be a difficult thing to do. Once you have found them, there is the challenge of getting them to acknowledge that they owe money and that they need to pay it back. Most people are honest and when you confront them will work towards making arrangements to repay their debts.

Unfortunately there are other consumers who have no desired to pay their bill and in fact plan to escape the debt collection process whenever possible. These are the tough ones to deal with and many times debt collection involves some form of harassment including taking them to court to make them pay up.

They will harass you on the phone, send threatening letters and if it is a large amount of money may even start recovery procedures if there is equity involved such as a car or a house. Picking up a car and selling it to recover the debt owed is a common approach for many collection agencies. Taking over homes is more problematic, to recover the cash involved in the mortgage, however you need to get the people out of the house before it is sold. Court orders are sometimes needed to make people move out so that the house can be sold.

Debt Collection Process

All this is very difficult, however it is part of the debt collection process and each situation will be different. Knowing the laws in your town or city can also help with regards to understanding what a debt collection agency can do and cannot do. Know your rights. Understand the alternatives when it comes to debt collection. Eviction can make a huge difference in your life in terms of the assets you retain during a debt collection process.


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Consolidation Loans

February 21st, 2013 Debt Posted in Debt Consolidation No Comments »

Consolidation LoansConsolidation loans are a really great tool for consumers and business people who would like to reduce their payments into one easy to manage monthly payment and usually save money at the same time. You may have several loans at various interest rates. Or perhaps a couple of credit cards with unpaid balances. You are likely paying too much interest and your monthly payments may also be higher than they need to be. Consumers in this situation can apply for consolidation loans. If you have a good to excellent credit rating you can save hundreds or thousands of dollars a year.

Debt consolidation may also help to improve a consumer’s credit rating as well. With only one loan instead of several and lower monthly payments, they will be more affordable. The ability of the consumer to meet all of their monthly payments is quite a bit higher which reflects positively on their credit rating. Anytime you miss a payment, your credit rating will slip several notches. This makes it more difficult to obtain a loan and driving the interest rate up as well. Demonstrating that you can meet payment requirements over an extended time frame also helps your credit rating.

Secured Consolidation Loans

A popular method by consumers to enable debt consolidation is to use the equity in their home as collateral. This ensures that the consolidation loan is secured. It allows the lender to provide a much lower interest rate to the consumer.  With low rates, the consumer may even find that their monthly payments decrease by several hundred dollars a month. This reduction can be very helpful with their monthly budget.

Consumers must realize that if they are unable to pay their monthly payments they could lose their homes. If they have used their home as equity for the mortgage or the loan, they could lose their homes. The lender will have the right with a secured loan or mortgage to sell your home. This happens in situations of nonpayment to recover the remaining amount that is still owed.

This can be very catastrophic for everyone and consumers should make every effort to meet all of their monthly payments. If you find yourself in this situation, talk to your lender and attempt to work out a solution that keeps you in your house without losing it. Eventually, you will need to make all of the payments on what you owe.

Avoid Credit Car Debt

Use consolidation loans wisely and once you have consolidated all of your debt into one loan, avoid running up the balances on your credit cards again, or you will be faced with exactly the same problems you just got out of. Credit cards have very high-interest rates and consumers end up paying a great deal of money for interest charges if the unpaid balance goes beyond the due date.

In addition, as soon as you pay less than the full balance by the statement due date, interest is calculated on the unpaid balance from the date the items were first charged to the card. The amount of interest is often much larger than most people expect and then it is even more difficult to pay the total amount owed.

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Consolidate Debt

January 7th, 2013 Debt Posted in Debt Consolidation 1 Comment »

Consolidate DebtMany consumers are just not aware of how much money they can save when they consolidate a combination of personal loans, mortgages and credit card debt.  Consolidation of this debt can save hundreds of dollars in interest and reduce your monthly payments as well significantly. This step can make your financial life a lot easier. It can release money on your monthly budget for other things that you or your family may need.

What Kind of Debt can be Consolidated

Basically any kind of debt can be considered for consolidation. Sometimes the lenders will not even ask what the money will be used for. They are more concerned about your ability to repay the loan. Credit card debt carries a very high interest rate, varying from 18% to as high as 28% recently. If you are paying interest at these levels, it will cost a lot in interest. It can take you much longer to repay the debt.

Unsecured personal loans are next in line  in terms of interest rates and are much lower than credit cards. They are still high, due to the fact that they are unsecured. The monthly payments can be high as well due to the short terms associated with these kinds of loans.

Secured Personal Loans

Secured personal loans are secured by equity from a car or home. They are the lowest interest rate loans you can obtain,. Next to mortgages which are always secured against your home. These loans also have a short payback time compared to mortgages. Typically they are five years in length, where as a mortgage can have a 25 year amortization. Secured loan monthly payments will be lower than unsecured loans. But still much higher than a mortgage payment for the same amount of money that you borrow.

Finally mortgages are secured by your home’s equity. As a result they have the best available interest rates in general. They also have the longest term with 25 years being the longest you can have in Canada. We have seen 30 and 35 year mortgages advertised in the US. The longer the amortization, the lower the monthly payment.

How Much Money can I save When I Consolidate Debt

The answer is that it really depends on the amount of debt you have, the current interest rates you are being charged and the amortization of the debt. It also depends on what kind of debt consolidation loan you can arrange or negotiate. If you have a lot of credit card debt which is consolidated with a mortgage, most people will see a significant drop in their monthly payments and the interest that is being paid.

Chat with your lender and ask them to calculate for you the amount of interest you will save if you consolidate all of your debt into one low interest rate loan or mortgage.

How Do I Obtain the Best Consolidation Loan or Mortgage

There are two ways to find the best consolidation loan or mortgage. One is to surf online and search for loans and mortgages that offer the lowest rates or to meet with various lenders at banks that you deal with. In both cases, this will take a bit of work and time for you to meet with these people or surf the net applying at several online lending companies and then waiting to see what is offered to you. If you have the time and knowledge, most people will find this very rewarding and helpful in terms of saving interest and reducing your monthly payments.

The other method is to hire a mortgage broker or a loan broker to find the best financial loan product for you. They will take all of your information and review with their lenders who can provide the best terms and rates. In most cases they will be able to find borrowers with good credit ratings, loans to consolidate their debt and save them a great deal of money. Many clients use this approach every day to save them money on their debts. Customers of lenders can also do a quick online check or check with their local bank to compare what is being offered and satisfy themselves that they are in fact getting the best deal.

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Debt and Consolidation

December 7th, 2012 Debt Posted in Debt Consolidation 1 Comment »

Debt and ConsolidationWhat is it about Debt and Consolidation that consumers do not understand? Every day almost I am reading something about this subject online and talking with people who do not see to understand that if you consolidate your debt you are going to make your life easier by only having to make one payment and it is going to be lower than the total of all of the other payments due to the lower cost if interest as well. The reason for this is simply because with a debt consolidation loan, your interest rate will be less especially if you are consolidating credit card debt.

Why is Credit Card Debt So Expensive

Credit card debt is usually charged at a rate of 18% approximately for cards such as Visa and Mastercard and as much as 27 or 28% for cards from department stores like Sears and others who have their own credit cards. With these rates, if you carry a balance over each month, you will be paying more interest than you are paying principle. This really means that you will take a very long time to pay off the debt if you are only paying the minimum payment each month. Most people just do not get this point and keep on paying and paying, wondering why they have no money left to do other things.

One of the reasons for this web site is that we are hoping to provide readers with information to help them manage their expenses better when it comes to dealing with credit card debt and other types of debt. The best way to illustrate and help people is to show an example.

Credit Card Debt and Consolidation

Let’s assume that a consumer has a credit card with a $5000 limit on it and he has run his card up to the limit so that now he owes $5000. He cannot repay the credit card and has decided to pay it off over 5 years time with monthly payments. The interest rate is 18% and he plans to not charge anything more to the card, which may be unrealistic, since most people will charge more to their card once they have a bit more room on it.

He also has another card, Mastercard that has $2000 on it with the same terms and interest rate. The payments for these two cards are:

Visa – $5000 at 18% = monthly payment=$119.79, and total interest payments = $2,287.07

Mastercard- $3000 at 18% = monthly payment=$71.87, and total interest payments = $1,372.24

Total Monthly Payments = $191.66 and total interest payments = $3659.31

Personal Loan for Debt and Consolidation

Personal loan rates vary a great deal. They depend on whether the loan is secured or not and the level of your credit rating. You can plug in whatever rate you would like. However we will use 9% and assume the same five year term for the personal loan. The results are quite interesting and really demonstrate why consumers should always consolidate credit card debt. Use a personal loan to pay them off in total, if they are unable to pay this debt otherwise.

At 9%, the monthly payment declines to $161.58, a $30 savings per month and total interest paid is $1,829.66, which is almost half the interest payment. Now if you consolidated the loan, and put the $30 savings to the personal loan, this loan will be discharged even faster than the five years and the amount of interest paid would also be lower.

If this does not convince you to consolidate your debt, we are not sure what will.

Avoid Running Up Your Credit cards in the First Place

This is really the issue that we all face as consumers. We want to have everything now and we want to buy things when we really cannot afford it. Most consumers run into this problem of having too much debt and then have to dig themselves out of the debt. We try to follow the following motto, learned after many years of paying too much interest on too many things. Only purchase what you can afford to repay at the end of the month! Seems to work for us and now we have to do without a lot of things, but that is ok with us. Good luck on your debt and consolidation objectives.


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Debt Consolidation

November 21st, 2012 Debt Posted in Debt Consolidation 1 Comment »

Debt ConsolidationWhat exactly is debt consolidation and why would you want to consolidate debt that you already have to make more debt? We will try to explain this term. Also some of the reasons why a consumer or even a company would want to consider consolidating their debts into one loan of some type or a mortgage.

Fundamentally, consumers who have multiple debts would apply for a new loan. It is with the understanding that this new loan would then be used to pay down completely the existing debt. This includes any debt on the credit cards and the personal loans that they might have. There are a number of advantages associated with taking this approach.

Advantages of Debt Consolidation

The most straightforward reason is reduction  multiple payments to multiple creditors each month. You now have only one debt and one payment to make each month. This is of course assuming that you do not continue to use your credit cards. Avoid driving up the balances again to a point where you cannot repay the balance each month. Unless you have made a substantial payment on the debt consolidation loan, there is little chance of consolidating your debt a second time.

The main reason why consumers would take this approach is actually more about saving money. Especially if you have credit cards. Credit cards as a debt instrument are very expensive. Attracting very high rates in the range of 18% for most credit cards. Upwards of 27% for store type credit cards. Consumers who only pay the minimum amount each month will be paying primarily interest and very little principle. We watched one show one night and it was going to take 10 years for this person to repay a credit card debt. This assumed that they only paid the minimum each month and did not charge any additional debt to the card.

Personal loans on the other hand range from 4% to 12% at the present time. This depends on your credit rating as well. Also whether you have a secured loan or a non secured loan. Either way there is a substantial savings in the amount of interest that you would pay each month.

Using Your Home’s Equity for Debt Consolidation

This has been a very popular approach for many consumers whose homes increased in value and / or they had paid a substantial amount down on the mortgage leaving a great deal of equity in their homes. By borrowing against this equity they are able to have a secured mortgage with a very low interest rate and they can use this money to pay off all of their other debts and reduce the amount of money the need to pay each month. Personal debt is usually based on a loan term of 5 years were as mortgages can be stretched into 25 year terms making the monthly payment much lower and enabling the borrower to have a much better cash flow.

Most people would prefer to just repay all of their debt and be debt free. If you are nearing retirement this is a goal that everyone should strive for. However many people still have debt and sometimes the best approach is to take the debt consolidation approach to limit your interest payments. Never the less the quicker you can reduce your debt to zero the better off you will be.

Bad Credit Debt Consolidation

Even if you have bad credit and find it difficult to find a lender, it is worth the effort to find a loan to pay off your debts. Any time you can save money, you will be better off. People with bad debt may have to pay a little more in terms of interest rates and possibly fees, however they will still save substantially and you may improve your credit rating as well by reducing the amount you owe as you pay the loan off each month.

If you are still confused, we will be adding more posts later this year and we encourage you to watch for them. We also suggest you speak with a lender and ask them for an explanation as well that is related specifically to your situation. They should be able to demonstrate just how much interest you will save after you consolidate your loans and credit cards.

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