Bad Debt Consolidation Seems Close To The Dream.
You are going to be able to save money and lower your rates and payments at the same time with bad debt consolidation. A company will do it all for you.
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.
Cutting interest rates in half along with payments with a phone call or a click on your computer is what the brag about.
These are tempting promises that appeal to anyone who is drowning in debt. These people are willing to do whatever it takes to get out of it. Here is a list of things to consider before you contact one of these companies.
There are three bad consolidation moves that you might take
If you want to consolidate your debt, you probably are already behind on loans. You can get a consolidation loan but the interest rate is going to be extremely high. In reality, you have lowered your payments but you are spending more on the interest. So, you end up paying longer which means paying more.
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.
You can negotiate for lower interest rates and stretching out your payments on your own. Do you really want to pay someone else to do it for you?
Creditors are known for threatening debtors. Knowing this, you probably do not want to deal with them but, think about it this way. If you talk to several consolidation companies, you will find they all offer the same thing. Here is the kicker though. They tell you that it can take 32 years for you to pay off your debt on your own. They offer to cut that time down to 4 and half years. Look for a financial calculator on the internet.
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 making late payments or missing them all together. What is purpose in using their service?
When you initially transfer balances from one credit card to another with lower rates you may believe that you are doing the right thing. Unfortunately, the lower rates are for a limited time only. In order to keep a low rate, you will have to apply for another card again and again. This type of activity makes you look like a credit risk and definitely hurts your credit score.
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.
Home equity loans have low interest rates and offer a tax deduction for the interest you pay.
You can also refinance your home if you have equity built up. Pay off your debt with the money you receive.
Alternative options are negotiating, personal loans or refinancing your car. - 23210
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.
Cutting interest rates in half along with payments with a phone call or a click on your computer is what the brag about.
These are tempting promises that appeal to anyone who is drowning in debt. These people are willing to do whatever it takes to get out of it. Here is a list of things to consider before you contact one of these companies.
There are three bad consolidation moves that you might take
If you want to consolidate your debt, you probably are already behind on loans. You can get a consolidation loan but the interest rate is going to be extremely high. In reality, you have lowered your payments but you are spending more on the interest. So, you end up paying longer which means paying more.
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.
You can negotiate for lower interest rates and stretching out your payments on your own. Do you really want to pay someone else to do it for you?
Creditors are known for threatening debtors. Knowing this, you probably do not want to deal with them but, think about it this way. If you talk to several consolidation companies, you will find they all offer the same thing. Here is the kicker though. They tell you that it can take 32 years for you to pay off your debt on your own. They offer to cut that time down to 4 and half years. Look for a financial calculator on the internet.
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 making late payments or missing them all together. What is purpose in using their service?
When you initially transfer balances from one credit card to another with lower rates you may believe that you are doing the right thing. Unfortunately, the lower rates are for a limited time only. In order to keep a low rate, you will have to apply for another card again and again. This type of activity makes you look like a credit risk and definitely hurts your credit score.
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.
Home equity loans have low interest rates and offer a tax deduction for the interest you pay.
You can also refinance your home if you have equity built up. Pay off your debt with the money you receive.
Alternative options are negotiating, personal loans or refinancing your car. - 23210
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 @ 6:20 AM
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