Lokesh Kumar asked:


You never know when and who would need help from a credit card debt consolidation program. Sometimes unexpected circumstances can lead to financial difficulties which in turn would lead you to consider debt consolidation. Some of these circumstances are loss of job, loss in business, death of an earning member and so on. If you are finding it hard to pay off your credit card loans, then it is wise to consider debt consolidation. This is much better than bankruptcy. This article will help you with steps in finding the right credit card debt consolidation program, make you aware of the advantages and disadvantages of debt consolidation so you can decide whether credit card debt consolidation is the best option for you or not.

Basics of Debt Consolidation

Debt Consolidation is a big loan that will pay off your credit card loans. There are several ways these debt consolidation programs work. The most popular way is to take one lump sum amount of money from you (the borrower) and distribute it to your credit card companies (the lenders). All your loans will be consolidated into one payment usually withdrawn directly from your bank on a fixed date every month. These programs make the card holders life easier.

As a general rule, if you have many credit cards from different companies with high interest rates, then debt consolidation can help you manage your debt with only one bill and much lower APRs. These debt consolidation companies negotiate a lower interest rate for you and this can save a lot of money in the long run. This will work out in your favor if you have credit cards with APRs of around 30% because the debt consolidation programs can reduce these interest rates to between 12% - 18%. These programs require a monthly administration fees, which is usually around and this will come off your savings. Remember if the admin fee does not come off your savings, then it is not a good idea to sign up for a debt consolidation program.

So it looks like everything about the credit card debt consolidation is positive. Well, it is not always the case. There are a few advantages and also disadvantages of debt consolidation programs. You have to find a balance between them. The fact is that credit card debt consolidation companies do help you in paying off your debt. Here are some advantages and disadvantages of these programs.

Advantages

1. Decreased payment amounts: The monthly payments will be less than what you were paying before debt consolidation because you are paying off the loan over a longer duration.

2. Simpler to manage: After you signup in the debt consolidation program, you will have a relief from reading your credit card statements, deciding how much to pay for each credit card and then making the payments one by one. Usually, the company will withdraw the money directly from the bank and you will not have to be concerned about late payments.

3. Decreased interest rates: This is one of the major advantages for many credit card owners. Some of the debt consolidation companies bring down the interest rates much lower than the current ones. This can save lots of money for you.

4. Debt Management tips: Many of the good debt consolidation give lots of free tips on managing your debt. They draw out a plan on debt management. These tips are invaluable. They even mail out booklets on debt management.

Disadvantages

1. Lower FICO scores: Many experts debate that debt consolidation does not have any effect on credit (FICO) scores the fact is that debt consolidation has a negative effect on the credit scores. Enrolling into debt consolidation will always be reflected in your credit history. Most credit repair companies mention that it is difficult to increase your credit score if you are currently working with a debt consolidation program. Your credit scores can be raised after you have paid off the loans and are not currently in any debt consolidation program. Even if you can remove one credit card from the debt consolidation program that can help you increase your credit scores.

2. Higher Payment: Since your payments are made over a longer duration of time i.e. in more number of the years, then you will end up paying more in the long run. One way to prevent this is - if your financial situation has improved, then you can pay off larger sum of money. Most of times there will be no penalty for paying off the debt sooner than the agreed number of months. Before enrolling in a credit card debt consolidation program, you can confirm if there is a penalty or not for paying off the debt sooner than the agreed number of months.

3. Credit cards inactivation: If a credit card payment is enrolled in a debt consolidation program, then that particular card account will be inactivated. i.e., that credit card can no longer be used.

4. Negative Impact on Future Loans: Once you have enrolled in a credit card debt consolidation program, this will remain in your credit history. So, all future loan requests (new credit card applications, home loan, car (automobile) loans etc.) will involve references to your debt consolidation. i.e., the lender will have knowledge about your participation in debt consolidation program. Some people are very uncomfortable about this but it is up to you decide. Your credit history is a private record and will be provided by credit score companies only on a need-to-know basis. If you apply for home loan, then the chances of getting rejected is higher and if you get accepted, then mortgage broker will ask for explanation. Again all these conversations are kept confidential.

So, the question is - when should you consider a credit card debt consolidation? If you are paying high interest rates around 30% on a credit card, you have many credit cards, you are unable to make payments or your are barely able to make just the minimum monthly payments, you are finding it difficult to manage all the payments etc., you must consider signing up for a credit card debt consolidation program. After reading through the advantages and disadvantages mentioned earlier, make decision about signing up or not signing up for credit card debt consolidation program.

How to find a good debt consolidation program / company?

Signing up with the right debt consolidation program is critical for saving money and successfully consolidating your debt. There are a good number of scams in the debt consolidation business so it is in your best interest to proceed cautiously to prevent being victim of a scam. Here are some very good sources of finding the right debt consolidation program.

1. References from friends and relatives: It is best to ask your trusted friends if they have any recommendations for reliable credit card debt consolidation program i.e., if they have enrolled in one of these or know of anyone who enrolled in one and is satisfied. As mentioned before, there are many scams and so with this option, you can feel safe. This should be your first option.

2. Television advertisements: Most of big and established companies run advertisements on TV. These are companies that have a lot of experience and have been successful with debt consolidation. But it is a wise thing to research the company. Look for their website and check for their standing in Better Business Bureau (BBB) and must have been in existence for a few years. Also, search http://ripoffreport.com website for this company - this website where victims of scams post their experiences.

3. Mails: When you are unable to payoff debt on time, you will receive mails from some companies that will offer help with debt consolidation. These companies have permission to access some of your basic information. The good thing here is that your fit their profile of enrollees and that is why you received a mail with their credit card debt consolidation services. As mentioned earlier, research these companies using the same methods described above.

4. Telemarketing phone calls: Typically, telemarketing phone calls that you get is because your debt situation is such that it fits the requirement of their enrollees. If you receive a phone call, remember to never enroll in the first phone call. Note down all the details of this company such as the websites, contact person and phone number to call. Research the company extensively as mentioned above.

5. Online Research: Research the internet for good credit card debt consolidation companies both non profit and profit companies. Once you create a list of possible companies, research the companies extensively. Talk to these companies until you are comfortable about enrolling with them.

For a few months or years, if you can handle the disadvantages of credit card debt consolidation programs, then enroll in a program. Debt consolidation can get you out of your current debt problems and save you a lot of money by lowering your interest rates but if you do not spend judiciously, then you will be back into the same debt problems and this cycle will never end. So the long term solution to debt problems is to change your spending habits and live slightly below your means. Remember you need to manage the money / debt and NOT let the money / debt manage you.



Sue

pomera asked:


I have credit card debt of about $14,000 (always paid on time and always more than mininum amount). I would like debt consolidation and money to repair (roofing, gutter & windows)the house with extra monies left over. I have never re-financed the house and pay 8% interest since “92″

Kansieo.com

Arvind asked:


Non profit debt consolidation services offer you with varied options to go for debt consolidation, though their services may be cheap but are not free of cost.

Non-profit debt consolidation or free debt consolidation services in true sense of the word means fair and honest companies that should normally protect your interests while negotiating your loan consolidation plan. They will educate you to plan your finances or income for a better financial future. A good debt consolidation company can in fact be a contact point for your lenders where they can negotiate a payment plan to lower your debt load and therefore come out with   a plausible solution in repaying your debts. 

Non-profit debt consolidation companies can also help you in seeking Personal debt consolidation loan with a facility to manage a single account, with a single lender, to clear your credit card debts.

Non-profit debt consolidation   services can arrange lowering your monthly bill and interest rates as well with benefits to spread loan payments over a longer period. Debt consolidation loans will not affect your credit score but instead will facilitate you to clear debt with minimum single monthly payment and thus will provide you with sufficient cash in hand every month. As such, if you are planning to opt for any type of debt consolidation loan, you may act fast to consolidate credit card debt or any other unsecured loan into a single manageable debt.

Non-profit debt consolidation services can even help you in seeking Christian debt consolidation loan, which is primarily meant for people in debt who are unable to repay their loans due to job loss, increased medical expanses or any other factor that has resulted in high credit card usage or on account of other unsecured debts. Christian debt consolidation option in fact is not a loan but you still receive the benefit of debt consolidation, enabling you to pay thus considerably less money per month and therefore leaving you with better cash flow for yourself each month. More so, no home equity is required. As such, what are you waiting for, go ahead, opt for debt consolidation loan, and convert your unsecured debts into one single payment. Thus, you will pay off your debt much faster. While approaching non-profit companies for seeking loan consolidation advice, you may always keep in mind that these services are not offered totally free but may be charging less than their profit earning counterparts.



Charlie

Cornie Herring asked:


Debt consolidation is one of the most common debt solutions that can help to reduce your overwhelming debt headache while you work your way out of debt. Unfortunately, no all debtors who go through debt consolidation process will successfully pull themselves out of debt issue. You need to know what you are doing and make the right decision if you are decided to reduce or eliminate your debt problem with debt consolidation. Here are a few tips to help you avoid bad choices while going through the process.

Tip 1: Know the actual cost of paying off your debts

Many debtors are making the common mistake of not knowing the cost they need to pay for in debt consolidation. They simply pick one of the debt consolidation packages which they think is right for them without calculating which one work the best by comparing different quotes, term & condition of debt consolidation packages.

There are many debt consolidation packages that will looked very attractive to you but you must aware that not all packages will suit your current financial situation. You must spend enough time to search the best fit and carefully review their term and condition. The best thing to do is making an appointment with the debt counselor from different debt consolidation companies, and let them explain to your what are the features of their debt consolidation package while you compare these features that benefit you the most and with the most reasonable price. You may be able to save thousands of dollars in the long run just by making the right decision.

Tip 2: Don’t Making up your decision too quickly without comparing other options

Although debt consolidation is the most common solutions for debtors but it may not be the best solution for you. Unfortunately many debtors come to the decision in selecting debt consolidation as their option without further exploration of other debt relief solutions that may better base on their current financial condition.

Before you decide to go for debt consolidation, you need to explore other available options for debt relief and compare which one best suit your need. If you need professional help to analysis your current financial situation and provide you the available options based on your financial condition, then, you should contact a consumer credit counseling service and talk to a counselor. Most of consumer credit counseling services are non-profit organization that provide free of charge counseling service to debtors. Talk to the expert will help you explore the available options to solve your debt issue.

Tip 3: Don’t Re-Trap Into Debt

Most of time, debt consolidation will involve getting a consolidation loan to pay off your existing debt, this mean that all your debt will be consolidated into a consolidation loan and free up your credit cards. You must keep remind yourself that you are not debt free yet because you just transfer all your debt into a consolidation loan that you still need to repay them in monthly basis. Many debtors forget this point and start to use their credit card again for purchases and only pay the minimum monthly due. Their debt will continue to pill up again and they regret on their action when their repayment capability goes beyond their financial affordability. Don’t let yourself to re-trap into overwhelming debt issue while you are working hard to pay off your consolidation loan.

Tip 4: Change Your Spending Habits

Debt consolidation is a solution to get rid of your debt but you need to help yourself to prevent future debt issue. You know that your current spending habit has dragged you into debt problem and you are lucky that debt consolidation help. But, if you still keep your regular spending habit, soon or later, you will back the same debt cycle again. You should control your spending by setting up a budget for yourself; make sure that you are spending within your affordability. If you have swiped your credit card for the convenient for purchasing; make sure you pay the total balance each month.

Summary

You can get rid of your overwhelming debt with debt consolidation but you need to do it right to make a success.



Patricia

melaniemia7 asked:


I have about $7,000 in credit card debt that I’ve aquired during the past 4 years of college. Now I’m graduated, can’t find a decent job, and going back to grad school. I’m having trouble even paying the minimum, and was wondering if I consolidated my debt if this would hurt my credit score. Oh yeah and I owe $30,000 in student loans, but those have already been consolidated.

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imablkqueen2 asked:


We have a high debt to income situation. I am looking for answers to get out of debt.

debt consolidation loan

C.A.T.™13 asked:


I have 2 VISAs and a personal loan I want to consolidate into 1 payment. I don’t really want to lose one of the VISAs b/c it is in connection with my bank and tied to my checking. Also the personal loan is from a company that I am in very good standings with. Is there a way I can consolidate without losing the one VISA and reputation w/ the loan company?

debt consolidation loan

ketshaun asked:


I don’t have any lates ever my fico is in the lower 600s. Where can i Go to get a debt consolidation loan w/o having to close my accounts? I also own 50% of a duplex (i own 1 unit) free and clear that generates about 650 a month in income, but since I don’t own the whole thing I cant refi it. Could i use that maybe as Collateral for a loan? What are my options?

Kansieo.com

iniyaitza asked:


Anyone out there with a good strategy for repaying the money I borrowed for tuition?

I am currently enrolled in debt consolidation program because I lived to frivolously in my youth.

I am also one of the primary homecare providers for a terminally ill parent.

Thank you for your suggestions in advance!

I am gainfully employed but have other monthly expenses such as a mortgage.

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Lesley Lyon asked:


Generally, Christians feel uncomfortable if they are in huge debts and also while choosing debt consolidation loans. That’s why Christian debt consolidation services have sprung up and they offer Christians excellent solutions to get rid of their worries associated with several debts. Many debt consolidation companies specially offer Christian debt consolidation services for Christian clients. This is the latest service that promises debt-related solutions suitable for Christian clients.

Christian debt consolidation loans are exclusively designed by keeping Christians’ concerns towards credits and debts. You will be assigned with a credit counselor who analyses your debt and credit records. After reviewing your financial details, the credit counselor will suggest you options for debt consolidation loan that will help you to combine all your debts in a correct manner. The Christian debt consolidation companies also assist the borrower in establishing a repayment schedule. In addition to this, the counselor provides spiritual counseling that will help you to understand the method of avoiding the chance of debts in the future.

A Christian debt consolidation company offers this service, as it is aware that the people will earnestly try to repay the debt in good faith and obligations. That’s why it offers favorable terms to Christian clients. By offering this service the Christian debt Consolidation Company can play safe by offering loan to you. In the recent years many debt consolidation companies has jumped into this service and competitively offer debt consolidation loans for Christian clients.

One of the greatest advantages of Christian debt consolidation service is that everything is done in a consistent way in accordance with the teachings of Bible and Christian belief. The credit counselor through spiritual counseling lets them know of how best they can avoid debts. The company provides all the services in an appropriate manner like consolidating debts, negotiations with multiple creditors, negotiation of interest rate, establishment of repayment schedule etc.

Like all other debt consolidation loans, the Christian debt consolidation service includes all types of debts like credit card loan, student loan, bad credit, bill related dues etc. A Christian debt consolidation loan has significant advantage over the others as it offers easier terms to Christian clients. The terms and conditions for all the loans like credit card debt consolidation, bad credit debt consolidation, debt and bill consolidation, student loan debt consolidation etc are offered specially for Christian clients with a lot of importance to their religious belief and concerns.

Another best part is that most of the Christian debt consolidation companies are non-profit organizations and hence their primary motive is helping their fellow Christians to come out of the burden of heavy debts.

The average interest rate of these companies ranges between 6 percent and 8 percent and enables you to complete the repayment over a period of 3 to 6 years. They also allow you to pay one payment in a month on any day of your choice. Christian debt counseling will be based on Bible approach and the counselor looks for reasons behind the debt like any accident, illness, loss of job etc. that made you freeze repayment. For Christian debtors, the Christian debt consolidation service is an excellent way for solving their various debt problems in good faith.



Douglas