Debt Consolidation Loans: Taking Control Of Your Credit Card Debts

As anyone who has ever owned credit cards will attest, card debt can build with surprising speed. It only takes a few months of missed payments to create a card balance that is almost too much to handle. But when it happens, there is a solution. A debt consolidation loan can clear it all in one payment.

The challenge of clearing unsecured credit card debt is admittedly a tough one, with the slightest delay increasing the scope of the undertaking. With the average American professional owning as many as 4 credit cards, it can mean a total debt of between $20,000 and $40,000

The only real solution is to swiftly clear the debt, so as to leave no room for any further delays. But is a debt consolidation program really the most effective solution to the problem?

The Nature Of Credit Card Debt

Credit cards are an essential tool for all of us. Even if we are not too fond of weekly shopping sprees and luxurious spending, we use cards to book cheaper air fares, hotel rooms and for bargain online shopping. The problem is that it is only a matter of time before a debt consolidation loan is needed to deal with the consequences of using the card.

Of course, clearing unsecured credit card debt is not cheap, but the advantage of using a single loan sum to do so is that the immediate debt is gone, and the replacement debt is easier to manage. For example, a $10,000 loan can be repaid over 3 years for much less per month than the minimum payment the card company would have demanded.

However, while a debt consolidation program seems ideal for dealing with credit cards, only personal discipline can keep any future card activity under control and prevent a similar situation from developing.

Added Advantage of Consolidation

Of course, there is more to clearing a debt than simply alleviating the immediate financial pressure. There are several positive aspects to getting a debt consolidation loan, with the potential to pay off more than just existing credit card debt means the financial situation can be improved completely.

When any debt is paid off, it is registered in your credit record and the credit score is adjusted. This means that by clearing unsecured credit card debt your future loan terms can be improved greatly. This includes a lower interest rate, and a high loan limit.

Also, by buying out the existing debts and replacing it with a more manageable debt structure, extra cash is actually freed up. This is especially true when the terms of the debt consolidation program include a longer loan term, with monthly repayments often 50% that of the original repayments combined.

Debt Consolidation Companies

There are two ways to secure a debt consolidation loan. The most obvious is to approach a lender – either traditional or online – and apply for a loan for the specific purpose of repaying existing debts. Generally, lenders are happy to accommodate, but the loan sum is usually limited so is fine for up to $30,000.

For larger debts, it is a good idea to approach a debt consolidation company. These companies take care of the smaller details involved, and sometimes negotiate reductions with the creditors. Also, clearing unsecured credit card debt is only part of the total sum covered, with personal loans and mortgages included, if desired.

Repayments are made to the company, which add on a fee for their services, and in some cases the debt consolidation program practically controls spending until the debt is cleared. However, the debt is cleared and that is the welcome point in the first place.

How Getting Debt Consolidation Loans With Bad Credit Can Solve Money Woes

When there are a lot of debts to pay, and not enough money coming in, the pressure to clear debts can become extreme. Bad credit can make it difficult to secure funds to alleviate the problem, but it is possible to secure a debt consolidation loan with bad credit. This means there is always an option for bad credit borrowers to turn to.

Generally speaking, securing large loan approval is pretty difficult when bad credit scores are involved, but consolidation is one loan type all of its own. The specific purpose is to ensure an improved financial position, and that is why lenders are more open to approving them.

But what is needed to secure a debt consolidation loan, and in what way can the loan be of any real benefit? Perhaps even more significant is how to find the right lender willing to provide such a loan with affordable terms.

Why Consolidation Is A Solution

It is easy to understand why some bad credit borrowers hesitate to seek another large loan when they already have a lot of debt on their plate. But it is worth repeating that consolidation is about improving the financial situation, not worsening it. With this in mind, getting a debt consolidation loan with bad credit is arguably the best move to make.

Such loans work because the funds are used to buy out the remaining balances on all existing debts and loans. For example, if there are 4 outstanding debts, of $2,000, $3,000, $5,000 and $7,000, then a consolidation loan of $17,000 can be used to pay them off in one go. Getting large loan approval might be difficult but for such a proactive purpose, it is easier.

However, the tactic only works when the terms of the debt consolidation loan are such that the monthly repayments are lower than the combined repayments of the original debts. This means that cash can be freed up for other purposes, as the pressure is lessened.

Sources Of Consolidation Loans

When it comes to seeking a debt consolidation loan with bad credit, there are two sources to apply to. The first is an ordinary lender, while the second is a debt consolidation company. However, the kind of terms secured from these lenders can be very different.

An ordinary lender basically offers a normal loan but granting large loan approval is dependent on the funds being used to clear debts. The interest rates can be competitive, especially if secured from an online lender, and the repayment terms can be anything from 5 years to 30, depending on the size of the loan taken out.

Getting a debt consolidation loan from a company has its advantages, with the company essentially buying out the debts on your behalf and then seeking to be reimbursed over a given period. Approval is more likely, but the interest charged is usually higher and there are extra charges.

Choosing Your Lender

Of course, as with everything else, it is important to know who the lender is before agreeing to sign any loan agreement. When getting a debt consolidation loan with bad credit, it is important to watch out for extra or hidden charges, so that the true extent of the costs can be ascertained.

But, there are also risks relating to the trustworthiness of the lender. There are plenty of unscrupulous operators online, so when researching options it is essential that these are checked out. Be sure to check them out on the BBB website, or via the Verify1st tool, before agreeing to anything.

Remember, large loan approvals are one thing, but getting a debt consolidation loan that alleviates the pressure is the purpose behind the exercise. So, be sure to get an affordable deal from a lender that can be trusted.

Debt Management To Debt Settlement Programs: Advice For Making The Switch

Getting to grips with personal debt is not easy. Between the interest rates charged on different loans and the pressure to meet everyday bills, the likelihood is that most of us will need some help to take care of everything. It is why debt settlement programs are becoming so popular.

But for many people, the first step in taking control of spiraling debt is a debt management program instigated by professionals who make it their business to better organize your repayment schedule. The idea is to make everything more manageable, but this does not always turn out to be the case.

So, what is to be done when the management program is not working and a switch to a settlement program becomes the more prudent option. Both can make the task of clearing existing debts a lot easier, but can the switch be made? The answer is yes!

Settlement Vs Management: The Key Difference

So, what are the differences between the two programs? Well, to be honest, the differences are pretty major, and the consequences that come with them are very different too. The biggest difference, however, is that with debt settlement programs, the full amount of debt is not repaid.

This kind of program involves representatives negotiating a final figure that is a percentage of the total amount due. A good debt settlement company will be able to negotiate as little as 30% of the existing debt, usually by arguing that anything more is impossible to pay.

A debt management program, on the other hand, sets about paying the full amount of the debt by instigating a strict financial management regimen. It is usually done by the management company clearing existing debts in full on your behalf, in return for effectively taking control of your finances for a given time.

Debt Management And Settlement: Pros And Cons

There are both advantages and disadvantages to whatever type of program is taken up. But a key advantage that debt management has over a debt settlement program is its long-term consequences. For example, because all debts are paid off in full, the credit score is improved, making better terms available for future loan deals.

In contrast to a debt management program, settlement agreements are noted in credit reports as clearing debts in part. This means the credit score is affected, and any future loan application that lender will take this information on board. This can make approval a little more difficult, but is certainly likely to see less than perfect terms offered.

Of course, clearing existing debts is the most important factor when current financial pressure is extremely high. However, there is little doubt that settlement agreements have the more severe consequences.

Making The Switch

Before making the switch to a debt settlement program, it is essential that everything be discussed with your debt counselor. Simply switching might seem like the right move, but expert advice is very important to take on board – there may be a better way, especially when creditors want repayment in full, and are probably willing to re-negotiate repayment terms to accomplish that.

If the only practical decision is to abandon your debt management program, then make sure to check out the prospective debt settlement companies carefully. They will charge fees, so take that into account in assessing the worth of the move, and make sure they have an impeccable reputation.

Be sure to let your creditors know your decision, and secure a detailed debt management report to ensure your new position is crystal clear. Clearing existing debts through debt settlement does mean significant savings, but be aware that a single lump sum payment may be needed in some cases.

Get Help From Maple Leaf Debt Helpers

The economic situation in Canada is struggling to make progress and pull through from the terrible economic nightmare in the country’s history. And in the meantime, millions of Canadians all over the country are still held-up in debt and looking for ways to get rid of their overwhelming debt. Fortunately, the country has sufficient resources to provide debt relief to this struggling section of the society. There are solutions and alternatives provided by some institutions that recognize the predicament of the millions of people in this sad and unfortunate situation. With the proper channel to the right institutions willing to help, it is never too late to take back the reins and gain back control of their lives out of misery.

The key is doing some due diligence on where to get help to ease your burden. The right professionals should be able to draw a restructuring plan for your debt repayments in such a way that it will strangle your financial resources and not leave any for other basic needs. You need to find the right institution and people who will exert an effort to understand the appropriate option you can take to gradually get to the road to freedom from debt. And such is what is offered by Maple Leaf Debt Helpers, one of the country’s recognized authority when it comes to matters of debt consolidation.

And since each person’s debt situation is unique and different, there could be no uniform way of formulating methods to stay out of debt. The experts in debt consolidation will devise a plan that is specifically suited to your situation, needs and requirements. Getting rid of debt is a long-term goal involving a long-term process. And such process should have taken into consideration the over-all impact in your life as a whole. Imagine tying up a big bulk of your income to debt repayment scheme which in essence will practically send you to bankruptcy. This kind of assistance or relief is not the kind that is sensitive to the difficulties faced by people in debt like you.

Their expertise is on debt consolidation. This means that Maple Leaf Debt Helpers can help you work out your accumulated debts to be consolidated under one payment only. This can be done by availing a loan, the amount of which will cover all the existing debts including the corresponding interests. So instead of making multiple payments to multiple debtors, you only pay to one debtor. The advantage this method offers is a much lower monthly loan repayment as it will be structured based on your financial capability and this kind of loan has a low interest rate. To protect their interests, the lending institution will require a collateral against the loan and the loan tenor will be longer.

Debt consolidation is not the only available and possible way to manage your debt. Other alternatives are consumer proposal and debt settlement, both of which require help from the professionals. As a start, it will be best to avail of the credit counseling services if offered since this process will provide you with a better picture of how you stand financially considering all your debts against your income. The credit counselors will evaluate and determine your economics and offer solutions on how your debt situation can be relieved. Knowing these basics is important in making a decision as to which option may work best considering your circumstances.

Professional Debt Settlement Companies: Recognizing When Their Services Are Required

Once upon a time, when debts became too much to handle, lenders turned the screw and claimed compensation by seizing collateral, or the borrower declared himself bankrupt and thus avoided having to make payments they could not afford. Today, there are other options, and professional debt settlement companies can work apparent miracles in lowering debt.

The whole idea behind settling a debt is that the task of clearing existing debts becomes much more affordable and efficient. However, there are tricks to the achievement, with not simply anyone able to secure a good deal. Remember, creditors want all the money owed to them, if possible.

So, at what point does it become obvious that the services of a professional firm are needed to negotiate a good debt settlement agreement, and finally end the financial nightmare that repaying spiraling debts actually is.

Knowing Professionals Are Needed

So, when does it become apparent that professional debt settlement companies are needed? And exactly how worthwhile is seeking a settlement anyway? Well, a settlement is hugely useful when the size of the existing debt is so great that meeting repayments is becoming impossible.

A settlement means that the creditors accept a certain percentage of the actual debt in return for writing off the remainder. For example, if $50,000 is owed, then a settlement could see just $25,000 paid with the creditor seeking no further payment. However, clearing existing debts in this way has its negative side too.

Any debt settlement agreement is going to be noted in a credit report, and it will see the credit score of the debtor increased. This is because the full amount of the debt is never paid. Credit scores are improved only when a debt is repaid in full.

Knowing The Time Is Right

There are 4 key situations that tell a borrower that they need help in taking control of their debts. Since professional debt settlement companies take control of your finances, the move can mean some severe consequences, but the outcome should make it worthwhile.

Amongst the situations is when your own attempts to cut back on spending and apply strict budgets seem to always fail. Discipline is hugely important, but clearing existing debts can be extremely difficult when the situation is already in chaos. When someone else is enforcing austerity measures, then it becomes impossible to give in.

A second situation is where your own efforts to negotiate a debt settlement agreement with creditors are clearly failing. Creditors can be extremely stubborn, but hiring a professional to represent your cause can mean the debt is slashed to as little 30% of the actual figure.

The most obvious situation that would suggest the services of professional debt settlement companies are needed is when the original plan is causing more stress than anything else. Sometimes the sum owed is not the problem, but the debt repayment schedule itself. Clearing existing debts in one go is the best way around the problem, while the advice garnered from your dedicated representative will ensure your consumer rights are known too.

Finally, another situation where a debt settlement agreement is the best option is when the debt repayments themselves are too much to meet. This is especially true when dealing with credit cards, when one or two months missed payments push the minimum required payment very high.

What should be remembered, however, is that the terms of the debt settlement agreement are essential to make it worthwhile. This means deals need to be carefully examined, not jumped at.