Sometimes your debt levels get high enough that you need a little help managing them. It happens to all of us — maybe you needed to fix the car to get to your job, perhaps there was an emergency in the home or maybe a medical situation caused an expense outside your budget.
Regardless of the reason, you might feel like you’re in a tight spot and in desperate need of debt relief. Debt consolidation services are among the first lines of defense when it comes to handling any credit issues you might have, so they are well worth your consideration.
What Is Debt Consolidation?
Debt consolidation involves combining all of your monthly payments on credit cards, store credit and personal bank loans into one monthly payment with a lower interest rate. As a result, you will be able to pay off your debts sooner, your monthly payment may actually be lower, and you will have your bank and loan fees waived.
Debt consolidation services typically handle hundreds or thousands of accounts with creditors, so they are able to use their clout to negotiate and get a lower interest rate. Those savings translate directly to you, with many services reporting thousands of dollars saved over the course of a loan’s life. A loan that might normally take 30 years to pay off can be paid off up to six times faster using debt consolidation services.
Debt consolidation is a powerful tool that helps you keep your finances healthy and gives you the opportunity to pursue your dreams that much more quickly. Be careful, trustworthy firms like CreditGuard will not offer risky debt consolidation loans, but instead use debt management principles and credit negotiation to bring down your debt. Debt can feel like it prevents you from living freely and spontaneously. But it doesn’t have to be that way. By consolidating your debt, you can get the debt relief you need to return to a good financial place.
Credit Counseling as a Management Technique
Of course, once you’ve consolidated and paid off your debt, you still need to manage your money on a daily, weekly and monthly basis. To learn how to do that, you need credit counseling. Most debt consolidation services also offer credit counseling to teach individuals and families how to keep a budget, how to set aside savings and how to plan for the future. Money management is all about being conservative with your spending, living within your means and keeping a rainy day fund for emergencies. If you’re ready to get stable and be secure in your finances, consider debt consolidation services today.Read More
The effects of the 2008 recession continue to impact the finances of middle class Americans as total consumer debt nears $2 trillion. In fact, almost 30 percent of those with credit card or installment loan debt have had at least one payment over 60 days past due. Late payments and loan defaults can have a devastating impact on a family’s ability to obtain the credit needed for many of life’s basic necessities. Those with an unsustainable debt level will benefit from credit counseling services and developing a debt management plan.
Recognizing the Need for Debt Counseling
Understanding the early warning signs of excessive debt can help avoid a financial catastrophe while saving time and money. An emerging credit crisis usually includes one or more of the following elements:
- Minimum Payments: Credit card holders cannot reduce the principal loan balance by making only minimum monthly payments.
- Debt Ratio: A monthly debt to income ratio above 35 percent is usually unsustainable.
- Depleting Savings: Consistently tapping savings or retirement accounts is an indication that obligations exceed regular income.
- Late Payments: Payments that are knowingly submitted after the due date will adversely affect a consumer’s credit score and raise borrowing costs.
- Total Liability: The borrower’s total unsecured loan or credit card liability should never exceed 25 percent of their gross annual income.
Debt Advice and Budget Preparation
Credit counseling agencies like CreditGuard provide consumers with debt education materials and other services designed to show you how to get out of debt. Certified credit counselors help teach consumers a number of personal financial management strategies designed to alleviate debt pressure and ultimately achieve financial freedom.
The process includes creating a workable budget tailored for each individual situation and circumstance. An initial consultation is conducted in a friendly, non-judgmental environment, and the information is used to develop a comprehensive financial plan. The counselor monitors the client’s progress to ensure a successful outcome.
Debt Management Services
Debt management is a strategy that provides relief for those with immediate pressing needs and a heavy debt burden. If a reasonable budget proves to be impracticable, the client may choose to work with their credit counselor to craft a debt consolidation plan.
In this scenario, the credit counseling agency negotiates with each lender on behalf of the client in order to lower interest rates, waive fees and reduce the loan principal in some cases. The client then makes a single monthly payment to the credit counseling agency, and the funds are distributed to the individual lenders according to the terms of each agreement. The client benefits from a single monthly payment that is typically lower than the total combined loan payment obligations.
The Advantages of Credit Counseling
Professional debt counseling offers meaningful solutions for those experiencing the stress of unmet credit card and personal loan commitments. Quality agencies provide a complimentary consultation, which can serve as an important first step to reestablishing good credit and a creating a solid financial future.Read More
Managing your debt has never been easier. If you’ve accrued a lot of credit card debt, you might need to find a debt management service to help you keep payments within your budget. Debt consolidation services are useful tools that you can sign up for online or in person, and they can help improve your credit score. At their core, debt consolidation services are extremely simple. All you have to do is sign up for credit counseling and start going through the process with a qualified credit counselor to better manage your credit and to get out of debt.
About Credit Counseling and Debt Management
Credit counseling and debt consolidation services work on two levels. On the first, both services give you the tools and knowledge you need to get your finances back in order and on track. On the second, your credit counselor serves as an advocate for you as they negotiate with your creditors to get lower interest rates and monthly payments. This process is also known as debt management and if you use a company like CreditGuard of America, it is implemented almost immediately so that you can pay off your debts at a faster rate without putting yourself further into debt as you learn to better manage your lifestyle spending.
Step 1: Credit Counseling
With a credit counselor, you will sit down and look at all of your expenditures. The goal of counseling is to get your finances in line with your income and to prevent you from drowning yourself in more unnecessary debt. The root of financial strength is living within your means because that means you won’t feel obligated to apply for more credit. Your credit counselor and debt consolidation services will help you set up a savings account, give you tips to be more frugal and help you put together a budget that you can afford.
Your counselor will pass your financial information along for debt consolidation services. This will ensure that the final monthly payment to the credit counseling service is acceptable and manageable for your budget.
Step 2: Debt Consolidation Services
Once you’ve received your counseling, all that’s left is to put your debts together into one affordable monthly payment. After paying that down, you will be on track for strong finances once again. Making regular payments will improve your credit score, which could lead to more affordable interest rates on other major purchases or investments in your future. It should be noted that debt consolidation services or programs are not recognized as a loan. Payments to your debt accounts will be made on a regular monthly basis by the debt consolidation company. All you have to do is make the monthly payments to them.Read More
Going to college is the next logical step after high school for many students. Unfortunately, only a few high school teenagers apply for scholarships and grants well before their first semester of college begins. These students wind up taking out thousands of dollars in student loans (see more statistics here). Although, many are not educated in the hazards of taking out more students loans than are actually needed, and they quickly find themselves juggling multiple loan payments and falling behind on their student loan debt once they graduate and enter into the corporate world.
Hazards of Defaulted Loans
Neither government nor private student loan debt can be discharged in a bankruptcy proceeding. Furthermore the statute of limitations for collection actions does not apply to student loans nor does the Fair Debt Collection Practices Act. This means that graduates who fail to make their student loan payment, fall into default of their loans and are subject to:
- Wage and other income garnishments
- Suspension of state or federally issued professional licenses
- Withholding of annual IRS income tax refunds
Student loan lenders are able to garnish wages and social security or disability income payments without seeking a court order to do so.
Student Loan Consolidation
Graduates can help themselves manage their student loan debt by consolidating their loans with a company like Credit Guard. Some graduates think that they must go through the government for student loan consolidation, but an experienced and knowledgeable debt consolidation service professional can assist graduates with their student loan debt consolidation. The credit counselor can review your student loans and your finances and determine which program would best suit your needs. In many cases, the service can help consolidate both subsidized and unsubsidized loans. They can help lower your payment to an affordable amount, giving you only one payment to make each month. A student loan debt consolidation can relieve a lot of stress for recent college graduates, especially in today’s job market.
All too often, students find taking out loans to be an easy way to fund their education. And although it is quick money, many individuals don’t have to start paying it back immediately. However, many students do not understand the process or the importance of paying back a student loan, which can be a burden when finances are low after graduation. A student loan debt consolidation service can help graduates manage their student loan payments before it dramatically affects their finances, career and future success.Read More
Recent data from the Bureau of Labor Statistics indicates unemployment took a dip in May, moving from 7.5 percent to 7.6 percent, which means that – for now at least – interest rates will remain near all-time lows. That means that if you’re interested in buying a home or refinancing a current mortgage, the time has never been better as far as interest rates are concerned.
Of course, just because low interest rates are available doesn’t mean you’ll qualify for a low-interest mortgage. Those loans are reserved for men and women who have really good credit, and developing and maintaining good credit takes a lot of work.
Just as it’s easy to overeat but difficult to diet, spending can be fun but buckling down and repairing the damage that occurs from impulsive buying is a laborious task that can take years to do on your own. Both dieting and good finances, and credit card debt relief requires discipline and commitment, and they also require you to make smart decisions. At first glance, it might seem like the best way to climb out of debt is just to steam ahead, working extra hard and throwing all your available cash at your debt in the hopes that, over time, you’ll see your balances begin to drop in a meaningful way. In fact, that’s the best way to burn out and return to old spending habits.
A better approach is to seek out the guidance from a credit counselor who understands the debt process and can help you develop a workable plan that will really help you pay down debt steadily and a lot faster than you could do it on your own.
Credit counseling and debt consolidation companies actually can help you change the terms on many of your debts, decreasing interest rates and even eliminating or reducing late fees and other penalties. That means you’ll end up paying a much lower amount each month. Credit counselors can also streamline your debt repayment process by combining your debts into one account, allowing you to make one single payment every month to pay all your creditors.
Building healthy credit that looks good to lenders takes time; if you’re considering buying a home or refinancing an existing mortgage while rates are low, the sooner you begin working with an agency that offers credit counseling services, the sooner you can be on your way to a debt-free life, not to mention better credit.
The good news is that even if you don’t have great credit now, you still have time to build a strong credit history that can help you get a good loan rate: In a recent report, the Federal Reserve Board stated it would not likely increase interest rates until unemployment declines to about 6.5 percent, and that isn’t projected to occur until the end of 2014. So, get to work: Enroll in a credit counseling and debt management program today and begin building that solid credit history that will help you get the best interest rates around.Read More
With debts spiraling out of control, over one million people filed for bankruptcy last year. Unfortunately, many of them filed unaware of the repercussions. At the same time, some people do need to file for bankruptcy while others may have been better off with debt consolidation. Filing for bankruptcy can have a negative effect on your life for years to come.
Types of Bankruptcy
Chapter 7 and Chapter 13 are the two main types of bankruptcy. Chapter 7 is the most common and allows you to wipe out most of your debts, so you don’t have to pay off your creditors. Although qualifications for Chapter 7 vary from state to state, eligibility is typically determined if your median income is below that of a family size for your individual state. However, you still may qualify if you don’t have enough income to pay off your unsecured debts after paying for basic needs like housing and food. If you don’t qualify for Chapter 7, you may qualify for Chapter 13. With a Chapter 13 bankruptcy, you must follow an outlined plan where you are required to pay back some of your debt within a three to five year period. The amount that you pay is based on what you can afford. The benefit is that at the end of the repayment period, the outstanding debt is often discharged.
The Consequences of Bankruptcy
Although, the annoying calls from creditors will stop after you file for bankruptcy, the negative outcomes just may outweigh the positives. Your credit score will be lowered and many lenders will be unwilling to give you a line of credit or a loan. If a lender does offer you a loan or line of credit, the rates are usually very high. Another downside to filing for bankruptcy is that you may lose out on a job. Statistics show that 6 out of 10 employers check prospective employees credit reports. If you have a poor credit score, you just may lose the job opportunity.
The Alternative of Debt Consolidation Help
Debt consolidation is often an effective alternative to bankruptcy. With debt consoladation, financial counselors can assist you with negotiating lower interest rates with your creditors and work out an affordable monthly payment plan. All of your debt can be lumped into one convenient monthly payment. Banks, credit unions and financial counseling organizations can all assist you with debt consolidation help. You can avoid the repercussions of bankruptcy along with improving your credit score over time.Read More
Recent news reports about the sky-high interest rates charged by so-called payday lending companies have helped make consumers more aware of the true cost of doing business with these lenders. Most of these lenders charge annual interest rates well above 400 percent and sometimes as high as 800 percent, and their terms can make it difficult to pay loans back without rolling them over again and again. It’s not hard to see how signing up for a payday loan can ultimately result in financial disaster.
But while payday loans were once the sole dominion of storefront lenders with shaky reputations, today there are at least four major banks who also participate in the payday lending process: Wells Fargo, Regions Bank, Fifth Third Bank and U.S. Bank all have payday loan programs in place, and while their interest rates aren’t quite as high as those offered by storefront payday lenders, bank industry analysts say the trend is just as dangerous.
At least one consumer advocate agency, the Center for Responsible Lending, has called the banks’ payday loan services akin to loan-sharking. For their part, banks aver their loans offer customers a valuable service.
Once available only in very limited areas- most notably low-income areas – the payday loan business soared in popularity during the last decade after deregulation legislation made it easier for the companies to operate. By 2007, there were more than 24,000 payday lenders in the U.S., or about the total number of Wendy’s, Burger King and McDonald’s restaurants combined.
In payday loans, consumers write a postdated check to be drawn once their next payday comes around. If the loan cannot be paid by that time, the lender destroys the check and allows the customer to roll the loan over to the next period, charging a fee to do so. That practice can continue indefinitely, with the result being that customers typically go deeper and deeper into debt. The lion’s share of the lender’s profits come from the fees charged when the loans are rolled over.
Although payday loans offered by major banks have lower rates than storefront lenders – typically ranging from 225 percent to 300 percent – they also allow loans to be rolled over, charging fees to do so. Many states have responded by issuing stringent rules overseeing the issuance of payday loans, but, so far, most of those regulations have been aimed at storefront operators.
While payday loans may seem like a “fix” to many borrowers, the need for such loans takes away from a much more central fact: If you need a payday loan, that’s a sign that your finances are in serious trouble. Instead of seeking a short-term solution, you need to find long-term answers and develop better financial habits. Debt consolidation companies like Credit Guard offer a much better alternative to short-term loans. Debt counselors can help reduce interest rates and fees on credit card debts and other debts and combine them into a lower, easy-to-manage single monthly payment. Company credit counselors can also provide consumers with the tools and guidance they need to develop better financial habits. If you’re facing considerable debt, instead of looking for excessively costly short-term answers that can result in substantially more debt, look instead for a long-term solution through debt consolidation and get back on solid financial footing.Read More