Bad Debt Consolidation Can Be Quite Like The Dream.
Lower your interest rates. Cut your payments in half. We will save you money. You have heard all of this from bad debt consolidation companies.
People that are in a bad financial situation dream of this being a reality. Look at all the businesses that offer this service. Mailings and advertisements are everywhere for consolidating debt.
They tell you that debt relief is a simply click away, or cut your payments or interest rates in half.
These promises are extremely appealing to those who are sinking because of too much debt. They are willing to try anything to get it taken care of. Before you start looking at these companies, there are some things you should know.
Avoid the three negative choices most people make.
First is the hard money loan. These companies lead you to believe that any can consolidate their debt. This is not true. If you are looking for a loan, you are probably already having trouble with a current loan, which has affected your credit score. What happens is that the consolidator offers you an easy loan but charges you an outrageous interest rate like 22 percent. So, your monthly payment is lower but less money is going towards your debt and more towards interest. In the end, you are paying more than you were initially.
Second, is the consolidators who claim to handle everything. They promise to make your life easier by getting you lower interest rates and lower the monthly payment. All you have to do is give them a onetime setup fee.
That might be true but, they receive up to a 15% rebate from the companies that you are paying. That means that 15% of your payment every month, goes to them.
Why should pay them when you can negotiate with your creditors for free?
Creditors are infamous for intimidating debtors. Because of this, many debtors avoid any contact with their creditors. You decide to deal with a debt consolidation company instead. They all offer the same services but think about this. They estimate that you will spend 32 years paying off your debt by yourself. They say they can do it in 4 and half years. Sounds good until, you do the math.
When you find one, put the numbers in. There is a good chance that you are going to find out that you can pay it off faster not using these companies.
Debt consolidation companies also have a reputation for missing payments. Isn't that what you are trying to stop?
Finally, do not transfer balances from one credit card to another. In the beginning you may have a lower interest rate but it is only an introductory offer. To keep a low rate, you would have to constantly switch cards. This has a negative impact on your credit.
If you make this choice, contact your credit card companies yourself and have them closed out at your request. Make sure to that they mark the account as closed at customer's request.
There are good choices you can make for paying off debt.
For a tax deduction and low rates, you might apply for a home equity loan. Use this money to take care of your debt.
Another choice for those with home equity is to refinance the property for more than what you owe. You can use the extra money to pay off your debt.
Alternative options are negotiating, personal loans or refinancing your car. - 23208
People that are in a bad financial situation dream of this being a reality. Look at all the businesses that offer this service. Mailings and advertisements are everywhere for consolidating debt.
They tell you that debt relief is a simply click away, or cut your payments or interest rates in half.
These promises are extremely appealing to those who are sinking because of too much debt. They are willing to try anything to get it taken care of. Before you start looking at these companies, there are some things you should know.
Avoid the three negative choices most people make.
First is the hard money loan. These companies lead you to believe that any can consolidate their debt. This is not true. If you are looking for a loan, you are probably already having trouble with a current loan, which has affected your credit score. What happens is that the consolidator offers you an easy loan but charges you an outrageous interest rate like 22 percent. So, your monthly payment is lower but less money is going towards your debt and more towards interest. In the end, you are paying more than you were initially.
Second, is the consolidators who claim to handle everything. They promise to make your life easier by getting you lower interest rates and lower the monthly payment. All you have to do is give them a onetime setup fee.
That might be true but, they receive up to a 15% rebate from the companies that you are paying. That means that 15% of your payment every month, goes to them.
Why should pay them when you can negotiate with your creditors for free?
Creditors are infamous for intimidating debtors. Because of this, many debtors avoid any contact with their creditors. You decide to deal with a debt consolidation company instead. They all offer the same services but think about this. They estimate that you will spend 32 years paying off your debt by yourself. They say they can do it in 4 and half years. Sounds good until, you do the math.
When you find one, put the numbers in. There is a good chance that you are going to find out that you can pay it off faster not using these companies.
Debt consolidation companies also have a reputation for missing payments. Isn't that what you are trying to stop?
Finally, do not transfer balances from one credit card to another. In the beginning you may have a lower interest rate but it is only an introductory offer. To keep a low rate, you would have to constantly switch cards. This has a negative impact on your credit.
If you make this choice, contact your credit card companies yourself and have them closed out at your request. Make sure to that they mark the account as closed at customer's request.
There are good choices you can make for paying off debt.
For a tax deduction and low rates, you might apply for a home equity loan. Use this money to take care of your debt.
Another choice for those with home equity is to refinance the property for more than what you owe. You can use the extra money to pay off your debt.
Alternative options are negotiating, personal loans or refinancing your car. - 23208
About the Author:
Layla Vanderbilt is the content coordinator for a leading website that offers for bad debt consolidation advice and guidance.
posted by X - Men @ 5:12 AM
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