Three Tips On Debt Consolidation Loans
There are many people that are hurting financially right now due to the bad economy of late. Through no fault of their own, a lot of people are just falling deeper and deeper into debt. Sometimes we are faced with circumstances beyond our control (such as the economy) and it doesn’t make you a bad person just because you are in need of a debt consolidation loan for bad credit.
It can be a difficult journey to get back on your feet financially and get yourself out of debt and you need to keep remembering that even though your situation may be bad right now, it can get better. Let’s take a look at some debt consolidation loan tips that can help you to improve your financial situation.
1. Many people believe that only people with good credit can get a loan, but that isn’t completely true. There are debt consolidation loans that are available specifically to help people with bad credit. With the economy in such a bad state, there are more and more lenders offering this type of loan.
The requirements to quality for a debt consolidation loan aren’t as strict as those for a normal loan. It still stands though that a better credit score will give you a better loan with better terms than a bad credit score. This is understandable when you look at it from the lenders view. The lender will only make money when they lend money and the more people they lend to the more they will make. Because they want to lend to more people it makes sense that they should offer debt consolidation loans to those with bad credit but those loans will be more risky and so they need to have some security and to have security they often have higher rates on these loans.
2. There are some lenders out there that will bully you and treat you like you are inferior because of your bad financial situation. Don’t put up with anyone treating you like that and if a lender does treat you badly then leave and go somewhere else. Remember that you are not working for the lender; they are in fact working for you so you are the one with the upper hand. If they want your business then they need to treat you with respect and have your best interest in mind. You may have found yourself in this situation through circumstances beyond your control and it doesn’t make you a bad person. Keep that in mind so that you will have a positive mindset during negotiations with a lender.
3. There is quite a lot of competition between lenders even for debt consolidation loans so if a lender wants your business they should offer you a good deal. You should shop around between lenders to find which one will give you the best terms and the best rates. Don’t let a lender bully you into signing any contracts, you need to do what’s best for you, after all this is your future we’re talking about.
If a lender is just giving you a big sales pitch and only cares about making the sale and getting you to sign on the dotted line, then they are not the one to go through. There are many other lenders around so just take your time until you find the best one.
All About Online Debt Consolidation
With our slow economy there are more and more people that are finding themselves in a poor situation financially. Even those who have pride in their good credit score can find themselves in a difficult situation and with that credit score falling. Many people are constantly looking for ways to improve their financial position and ways to reduce their monthly debt payments. Online debt consolidation is one viable way that can help to reduce your debts. There is so much information on the internet and that includes information and help on your financial obligations.
When looking for advice online though you should always be careful as there are a lot of different information sources and different companies selling online debt consolidation services. Although many of these companies are legitimate, there are unfortunately some that aren’t. Don’t let that scare you off though because there are a lot of great sources that can offer you help.
As long as you do your research then you can find some great information from some good companies, it is just a matter of knowing how to tell if a company is good or not. The first thing you need to look at is how long the company has been in business for. The longer record they have the more assured that you can be about using their service. As there are more and more people struggling with finances and getting into debt there are also more and more online consolidation companies appearing. A brand new company will not have the same reputation as an established company does when they deal with your creditors. You also have to be wary of a brand new company too since it doesn’t yet have a reputation so it is difficult to tell if it legitimate or not.
Some of the online debt consolidation companies will offer you a loan of the amount of debt that you owe and with that loan you would pay off all your debts and then you would have just one payment every month to pay. This single payment makes it easier to keep track of your debt and should be at a lower monthly amount than what you are currently paying. If you consider one of these loans just keep in mind that the company with the lowest monthly payment isn’t necessarily the best company. You need to consider the interest rate and the term of the loan because even though the monthly payment may be less, if the term of the loan is much longer then you will pay more money in the long term.
Some online debt consolidation companies don’t offer a loan but instead will work with you and your creditors to get a better deal on all of your debts. Because these companies deal with creditors all the time and have a reputation then they can often negotiate a better deal for you. When they have negotiated better deals with your creditors then they will add up your debts and work out how much your total monthly payment will be. Then you will pay them that amount each month and they will distribute the payment to all your creditors. This way you have only one payment each month to worry about and you have less to pay each month due to the negotiated debt amounts and interest rates. This time of company is often referred to as a credit counseling service and they will also help you to budget so you can avoid getting into a difficult financial situation again in future. They will charge a small fee but you will still be better off than you were beforehand.
Online debt consolidation can really help you get out of a difficult financial situation, pay off your debts and get back on your feet. As long as you do some research and get the best deal for your own situation then you will soon be on the road to financial recovery.
What You Need To Know About Online Debt Consolidation
More and more people are having problems with debt, and with the economy not improving at a decent pace, the problem is only getting worse. It’s no wonder that so many people are looking for ways to reduce their monthly payments. If that sounds like you, then online debt consolidation may be one viable way to help you attain that goal. The internet is a wonderful resource for many things, and finding help and advice for your financial obligations is one of the things its useful for.
That being said, you should know that even though the internet can be a useful tool, there are a lot of companies selling online debt consolidation services. Unfortunately, not all of them are legitimate, so you need to be careful. at the same time, don’t let that scare you off, because there are also a lot of good companies that are ready to help.
Knowing that some online debt consolidation companies are better than others leads to the question of how can you tell which is which. A good start is to see how long they have been in business. The longer their track record, the more confident you can be in using their services. Just as more and more people are getting deeper and deeper into debt, so too are more and more online companies sprouting up to meet the demand. However, when a company is brand new, they may not have the same clout as well-established companies do when dealing with your creditors on your behalf. And that’s assuming a brand new company is legitimate and able to fulfill any promises they make.
Some of the online debt consolidation companies try to match you with a large loan to pay off all the different people you owe. Then, instead of paying several monthly bills, you pay only one. This single payment should be less than the total amount you were paying. However, don’t automatically go with the company that gives you the lowest monthly payment. While the monthly payment may be lower, the interest rate and length of the loan may be greater; meaning you will end up paying more in the long run.
Not all online debt consolidation companies work that way, though. Instead of getting a big loan for you, they will negotiate with each of your current creditors to reduce how much you, forgive fees, or reduce your interest rates. You will then give them a single monthly payment which they will distribute to those you owe. These are also known as credit counseling services as they usually help you set up a budget and give you other basic financial advice. This type of service is a good option for you if you don’t want to take out a brand new loan. They will charge some type of a fee, but this is invariably a part of the monthly payment you send them.
Online debt consolidation may be just the thing you need to get out of a sticky financial situation. Whichever method you decide to go with, be sure to read the fine print and do your best to determine of they are a good company to deal with.
Debt Consolidation Loans For Bad Credit
Let’s face it, the economy could be doing much better than it is. Unfortunately the same sluggish economy is taking its toll on decent, hardworking people. Even if they have previously had stellar credit, and made all of their monthly payments on time, and in full; they are now falling behind. Sadly, it’s not even their fault. If this sounds like you, then you have probably been trying to come up with ways to get out of your current situation. That’s a good thing because it shows that you care about doing the right thing. However, your credit is bad, and getting worse. At this stage, all you want is a way to stop the financial leaks. A debt consolidation for bad credit may be the answer you’re looking for. You may be concerned nobody will give you a loan, but with a little know-how, it can be done.
Without question, being in a bad credit situation can be quite stressful. Unfortunately, there are a lot of questionable lenders out there who will male all kinds of false promises in the hopes of separating you from your money. There are also plenty of decent lenders out there that are willing and able to help you get through this rough patch. The good news is there are some things you can do to minimize your chances of being taken advantage of.
Be informed. First and foremost, you have to know exactly where you stand financially. No guessing. No shortcuts. Write down every bit of money you have, all of your income, and all of your expenses. Next, write down how much you owe each creditor, the interest rate, how much you should be paying them, and how much you are actually paying them. Once you know your bottom line, it will be much harder for a crooked lender to force you into an even worse situation. Knowing your true financial situation will also prevent you from getting more of a loan than you really need.
Read the small print. the law says that the terms of a loan need to be fully disclosed. However, the law doesn’t say how big the print has to be. Yet, it’s still your responsibility to read all of the terms of any loan you are considering and to fully understand them before you sign anything. If you don’t understand it, don’t sign it.
Shop around. As mentioned, there are many different lenders out there. Invest the time and effort now to have a better financial life later. Bad lenders will do everything they can to pressure you into signing a loan agreement on the spot. Good lenders will let you shop around. Either way, from this point forward you are 100% responsible for your financial future.
Being armed with these few things will give you the best possible terms for debt consolidation loans for bad credit. Know your stuff, understand the terms of any and all offers you’re considering, and shop around until you get a deal that works for you.
The Truth About Loans For Debt Consolidation
It’s a scene that’s repeated day after day: A person goes to their mailbox hoping to get something good. Instead, they get nothing but bills and junk mail. Does this sound at all like you? If so, you know you are in real trouble when you start looking forward to the junk mail. However, every now and then, something catches your eye…a mailing with offers for loans for debt consolidation. Being curious, you open the letter and wonder if it could possibly be as good as it sounds. After all, you could get one loan and pay everybody off, and maybe save a little money every month on top of that. Consolidation loans can seem like a real lifesaver, but are they?
Here’s the catch, you can only get the best rates on a debt consolidation loan if you don’t really need it. That’s because the less risk you are to a lender, the lower your interest rates will be; and the less you owe, the lower risk you are. In short, the more you owe, the more you pay.
Aha! But you owe a lot, and you have an offer that has a very low monthly payment? At first glance, such an offer may look really good, but dig deeper and you may find you will end up paying more than double what you currently owe. How is this possible? Easy, some loans for debt consolidation take advantage of your situation by giving you a higher interest rate, but low payments that last several years longer. So, while you may pay less per month out of pocket, by the time you’re done repaying the loan, you will be in worse shape than when you started.
Let’s take a look at a quick example”
You have unpaid debt totaling $11,000 (to several creditors) with an average interest rate of 14%, with 5 years remaining to pay it off. Such a monthly payment would work out to approximately $260. Now, let’s say you get an offer to get a lump sum of $11,000 so you can pay everybody back at once, and all you have to pay is $190 per month. Heck! You’ll save $70 every month, not bad, right?
Hold on. Reading the fine print you see it’s at a rate of 17% instead of the 14% you’re paying now. Still, that extra $70 would really come in handy, and it’s only an extra 3 percentage points. Turning to the fine print again, you find out why. Instead of making payments of $260 for 5 years, you will be making payments of $190 for 10 years!
Let’s compare the final cost of both loan arrangements.
The 5 year plan will cost you $15,600
The 10 year plan will cost you $22,800
To put it another way, that $70 monthly “savings” will actually cost you $7,200. That means you will actually be losing $60 every month for that 10 years. Any savings on such a plan is only an illusion, and an expensive one at that.
To be fair, not all loans for debt consolidation are structured this way. The only way to know for sure is to read the fine print and make an honest comparison. As long as you take the time to fairly compare your options, you will be able to choose what’s best for you.