The Time For Consumer Debt Consolidation
There are many things to take into consideration when deciding whether you need consumer debt consolidation or not. In some instances, individuals are able to come up with enough income to keep amassing debts that they are able to keep up the payments on. But, if you just make the minimum payments on credit cards with high interest, you don’t have a handle on your debt or your financial circumstances. It is wise to keep in mind that having a savings account to draw on is smarter than having to rely on a high interest rate credit card.
You know you’ve waited too long to get debt under control if you can’t afford your minimum monthly payments anymore. Ideally, you will seek consumer debt consolidation while you can still make at least the minimum payments, if not the entire balance that remains. Waiting until you’re in over your head can leave you with a wrecked credit score and a whole lot of trouble.
If you own multiple credit cards and store credit as well as online accounts, you need to consult with a debt consolidation expert for help. You will reach a stage where what you owe will be more than your budget can handle, and you will need to decide what to pay every month and which deadlines you will have to miss. Get help from a debt consolidation agency before this happens to you.
Debt Consolidation FAQ
Question: Will any debt consolidation company include secured debts like cars and educational loans into the program?
Answer: Yes as long as you have the account number they will get in touch with each creditor. But just as the personabove me stated consolidation IS considered a from of bankruptcy and NO ONE will approve you for anything while you are on it. I wasn’t told this when I did it..found out from a car dealership. So if its substantial, you may want to file bankruptcy where you do not pay it back.
Question: Is it better to use a debt consolidation service or contact creditors directly?
I owe on 3 credit cards. One is starting to fall behind on the payments as its too much to pay. Which route is the way to go? Debt consolidation or contacting creditors & explaining that I was living beyond my means & now I am having trouble paying.
Answer: Credit card debt consolidation counselors are experts with a good knowledge of debt management, budgeting and behavioral patterns of credit card holders. These services are vital for those struggling to manage their credit card debts. Also called credit counseling or debt counseling the credit card debt consolidation counseling brings immediate relief to a credit card holder. A person seeking credit counseling can get it from two types of organizations. The professional or commercial organizations, and the non-profit organizations.
Question: Is this the way that a debt consolidation company works? They reduce the amount?
What is a good debt consolidation company that will negotiate what you owe by negotiating with the creditor, and then you owe less than before to each creditor, but you owe them for one big new loan , to them for paying your debts?
So they are getting your debts down by negotiating and then give you a consolidation loan to cover the amount owed to them now?
Answer: Basically, that’s how it works.
Debt Consolidation promises to reduce your payments into one check. But they don’t tell you that the one check is often just as big as all the little payments put together. Plus, if they negotiate to reduce your debt, your credit is trashed just as if you filed Chapter 13 Bankruptcy.
Question: Anyone know any good way to get a decent debt consolidation loan?
I want to get a debt consolidation loan, WITHOUT using my home equity, but they are telling me my credit score is great, but by ratio is too high. Well, I want to consolidate all the CC debt I have, but it’s running me in circles. What’s the point of trying to get a consolidation loan if they won’t lend it to you because you have too much debt? Does anyone know of ANY bank or anywhere I can turn to that understands and can try and help me?
Answer: Use unsecured loans: If the equity in your home is not adequate or you do not own a home, go for an unsecured personal loan. These loans are more difficult to get, but once you are approved, you will benefit from the lower rate of interest with this type of consolidation loan. With the new bankruptcy law, breaking free from debt has become more difficult. Hence avoid getting caught in the debt. If due to any reason, you are in debt, remedy the situation immediately. Though debt consolidation loans charge lower rates of interest than most other types of loans, there is a big difference in rates charged by various lenders. Hence research the lenders thoroughly before applying.
Question: Should I look into Debt consolidation with my credit card debt being $6000 or should I work something out?
Answer: Work out a monthly budget which lists all your income and outgoings, so that you know where the money is going. You can then work out how to pay off the credit card debt. In the meantime, stop using the credit card.
Question: Is there such a thing as a legit debt consolidation program out there?
Does anyone know of any real debt consolidation programs to reduce your monthly bills? I currently have a lot of short term, high payment/interest loans and I had to recently find a new job that doesn’t pay quite as good. I need to reduce my monthly bills (while maintaining my good credit of course) any ideas would be much appreciated.
Answer: Debt consolidators work on your behalf to call credit card companies and tell them that their client will no longer be making their payments (typically the person hasn’t been paying for awhile). The bank wants SOME money and is willing to work to reduce interest rates, freeze rates, create payment plans or write off debt so the delinquent party can payoff their balances.
the problem with any of these things is that as soon as it happens, a charge off is recorded with the 3 major credit agencies and your FICO will take a HUGE hit.
Your best bet is to make the minimum balance and, if possible, transfer balances off of high APR cards to lower APR cards to save you some $ on finance charges. It’s not fun knowing you’re flushing your $ down the toilet every month – but look at it this way – the same thing would be happening if you were investing in the stock market
Question: Is there a government agency that helps with debt consolidation?
I need a reliable trustworthy debt consolidation service quickly. I’ve heard that most advertised agencies are to be avoided.
Answer: Try out A+ Financial their interest rates are really low and the payment are cheap. They even have free advisors come to your home to discuss it all with you. Depending on your debt ratio you might need a co-signer but it is a really good company… I went from paying 870/month on debt to 246/month for 5 years. Their rates are lower than 6%
Question: Is debt consolidation a good thing to do over bankruptcy?
A friend of mine is considering doing debt consolidation and I’ve heard that these types of businesses may be crooked. Can someone give me their honest opinion on if it is a good choice for someone with an extremely bad credit rating.
Answer: Debt consolidation is used for several different things:
1. Big loan to pay off debts — bad idea to shift debt to new loan unless you are disciplined enough to not run the credit cards back up.
2. Settle debt for less than full balance. They hold your payments till all your accounts are 90 days past due. Then offer lowball settlements. Not only will this trash your credit, but many credit card companies won’t play. They just sue.
3. Credit counseling/debt management program. Check here: http://www.nfcc.org/. These are legit, non-profit companies. They can review all you finances and advise how to proceed. They have debt management programs available if you qualify, for a nominal fee. They negotiate lower interest rates, not settlements.