Do you know the difference between debt review and debt consolidation? Watch our video and phone a consultant to find out more on 0861 043 627 https://www.iemasfinancialservices.co.za/ #IemasFinancialWellness #IemasCares
In need of debt help? Should You Get A Debt Consolidation Loan? That will likely depend on your situation. So how do you know for sure what your best option is? Doug Hoyes, a Licensed Insolvency Trustee, with Hoyes, Michalos and Associates talks about the pros and cons of debt consolidation and what you can do if your consolidation options are not very favorable due to bad credit or if you’re already maxed out on monthly payments.
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Q. I have a bad credit score. Can I get a debt consolidation loan?
A. Your credit score is a reflection of how you handle credit and debt. A bad credit score shows that you haven’t handled your credit accounts responsibly so a new creditor is unlikely to offer you a debt consolidation loan with a low interest rate.
Even though you may not qualify for a debt consolidation loan there is a way you can reduce your debt and save some money in the process.
It’s called debt negotiation also known as debt settlement. You can negotiate with the creditor or debt collector to settle your debt for less than what you owe. Of course, your lender will need to accept the settlement and agree to cancel the remainder of your debt. Most of them will agree to settle since they would get nothing if you decided to file for bankruptcy.
Plus, debt negotiation is not as severe a hit to your credit score as a bankruptcy filing.
If you don’t want to hassle negotiating with your creditors, you can hire a BBB accredited debt negotiation company to do it for you. Visit https://www.nationaldebtrelief.com to learn how to consolidate your credit card debt without bankruptcy.
Why you should consider using a personal loan to payoff high interest rate debt. The standard deduction is now $12,000 per person or $24,000 for a married couple filing jointly. As a result, there is likely no tax benefit to borrowing against your home, and a better option could be a personal loan to pay off high interest rate credit card debt. Make the same payment you are making now but refinance it to a low single digit rate and pay it off in 3 to 5 years, saving 15 years of payments. Here is a link to comparison shop https://www.lendingtree.com/personal/ #creditcards #creditcarddebt #payoffdebt
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Life can be stressful when you have many creditors and not enough sources of income to repay the debts. To make matters worse, it can be hard to keep up with the repayment schedules if you owe different creditors.
For more details, visit their page at: http://www.debtmediators.com.au
In the following video Nicolette explains Debt Consolidation
What is DEBT CONSOLIDATION? What does DEBT CONSOLIDATION mean? DEBT CONSOLIDATION meaning – DEBT CONSOLIDATION definition – DEBT CONSOLIDATION explanation.
Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license.
Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others. This commonly refers to a personal finance process of individuals addressing high consumer debt but occasionally refers to a country’s fiscal approach to corporate debt or Government debt. The process can secure a lower overall interest rate to the entire debt load and provide the convenience of servicing only one loan.
Debt generally refers to money owed by one party, the debtor, to a second party, the creditor. It is generally subject to repayments of principal and interest. Interest is the fee charged by the creditor to the debtor, generally calculated as a percentage of the principal sum per year known as an interest rate and generally paid periodically at intervals, such as monthly. Debt can be secured with collateral or unsecured.
Although there is variation from country to country and even in regions within country, consumer debt is primarily made up of home loans, credit card debt and car loans. Household debt is the consumer debt of the adults in the household plus the mortgage, if applicable. In many countries, especially the United States and the United Kingdom, student loans can be a significant portion of debt but are usually regulated differently than other debt. The overall debt can reach the point where a debtor is in danger of bankruptcy, insolvency, or other fiscal emergency. Options available to overburdened debtors include credit counseling and personal bankruptcy.
Other consumer options include:
debt settlement, where an individual’s debt is negotiated to a lesser interest rate or principal with the creditors to lessen the overall burden;
debt relief, where part or whole of an individual debt is forgiven; and
debt consolidation, where the individual is able to acquit the current debts by taking out a new loan.
Sometimes the solution includes some of each of these tactics.
The bulk of the consumer debt, especially that with a high interest, is repaid by a new loan. Most debt consolidation loans are offered from lending institutions and secured as a second mortgage or home equity line of credit. These require the individual to put up a home as collateral and the loan to be less than the equity available.
The overall lower interest rate is an advantage of the debt consolidation loan offers consumers. Lenders have fixed costs to process payments and repayment can spread out over a larger period. However, such consolidation loans have costs: fees, interest, and “points” where one point equals to one percent of the amount borrowed. In some countries, these loans may provide certain tax advantages. Because they are secured, a lender can attempt to seize property if the borrower goes into default.
Personal loans comprise another form of debt consolidation loan. Individuals can issue debtors a personal loan that satisfies the outstanding debt and creates a new one on their own terms. These loans, often unsecured, are based on the personal relationship rather than collateral.
Don’t just move the problem around, fix it and get your debt paid off. Contacting a certified debt counselor to help you handle your money and set up a budget will get you started.