How Consolidation Loans With Bad Credit Can Rescue Your Finances For Good

Keeping on top of debts is not easy, especially in the modern world where buying on credit is such an essential part of living. The problems that so many Americans have in juggling their credit card bills, loan repayments, and even everyday expenses, means bad credit is extremely common. Getting a consolidation loan with bad credit can be the best solution.

The logic behind turning to a consolidation program is that it provides a constructive way in which to clear the slate and adopt a more effective debt management structure. It is better than bankruptcy because it does not damage a credit reputation since all creditors are repaid in full, and lifts the pressure because the repayment structure is easier.

But can a consolidation loan really rescue your financial situation for good? Understanding how consolidation works, and what terms to look for, is the key making sure it does.

Consolidation: An Explanation

Simply put, consolidation is all about gathering together the existing individual debts and paying them off completely with a single loan. Securing a consolidation loan with bad credit does depend on meeting some criteria, and accepting less than ideal terms, but the overall benefits are too much to ignore.

Most people have 4 loans to repay, as well as an average of 3 credit cards. This can create a major headache in terms of meeting repayments on the agreed due dates. What makes consolidation such an effective debt management structure is that it simplifies the task of meeting the debt by replacing multiple balances with a single loan, and multiple payments with a single payment.

But to make a consolidation loan truly effective, there are some terms that need to be addressed. For example, the repayment period should be as long as possible. This means the repayment due each month can be kept low, which also frees up extra cash for other financial obligations. Some lenders grant terms of up to 30 years.

Meeting Consolidation Program Requirements

Qualifying for a consolidation loan with bad credit is fairly straightforward. In fact, lenders are quite open to accommodating bad credit borrowers. After all, the purpose of the program is to get to grips with crippling debt.

The normal criteria when applying for any kind of loan relates to age (over 18), citizenship (US citizen) and employment, with most lenders stipulating applicants must have been employed full-time for at least 6 months prior to application. Having a reliable source of income is obviously necessary for any effective debt management program.

Also required is a large enough income to be able to meet the repayments each month. However, it is the excess income that really matters, with the debt-to-income ratio dictating only 40% can be used to make repayments, including those for the consolidation loan.

Securing the Best Program

There is no doubt that the Internet is the key resource when seeking the best terms for a consolidation loan with bad credit. Online lenders are less costly than traditional ones, charging lower interest and providing more flexible repayment terms.

As recognized experts in bad credit lending, they are your best bet when looking for an effective debt management program that is also affordable and flexible. However, when the debt is extreme, it may be better to secure the services of a debt consolidation company.

Be sure to check the reputation of any prospective company before agreeing terms on a consolidation loan. So, use the Better Business Bureau website to see how trustworthy they are.

Consolidating Private Student Loans: The Key To College Debt Recovery

Graduation is supposed to be a reason to celebrate, but instead many students see it as the end of their repayment deferment period and the start of their financial woes. In fact, the size of their college debt can be debilitating, but consolidating private student loans is a very viable route to financial recovery.

The reality is that even a decade after graduation many people are still repaying their college loans, so the ability to take control the debt is a huge attraction to students. Getting onto a loan consolidation program, even while at college, is seen as a practical way to accomplish this.

Of course, getting the best terms possible is very important, with a range of benefits to be enjoyed if the right deal can be found. But the aim is to pay off the student loans once and for all. A consolidation program offers the chance to clear them in one fell swoop, then repay a single loan on more affordable terms.

Key Advantages: Recent Graduates

Graduates should take a look at the options available before consolidating private student loans. In fact, there are two forms of graduates: recent graduates and long-term graduates. Recent graduates have the maximum debt before them, but because they have not yet had a chance to build a career and are still low earners, it remains difficult to make repayments.

The best option for them is to agree a long-term consolidation deal, extending the repayment term to perhaps 20 or even 25 years. With fixed interest rates, they are easy to budget for, and over such a long length of time, payments on the loan consolidation program are very small.

It is not considered advisable to choose a variable interest rate because the repayments can fluctuate, making them more difficult to manage. In order to consolidate student loans effectively, it is necessary to have a reliable repayment structure.

Key Advantages: Long-Term Graduates

Long-term graduates are those who have been out of college for at least 5 years, though some might still be repaying college debts after 10. They differ from the alternative category in that they usually have a larger income and are on a definite career path. But they look to consolidating private student loans to allow them to finally control of the debt.

The structure of the loan consolidation program may be short or long, and since these graduates have a larger available income, accepting a variable rate may be a good choice. Although rates will fluctuate, they may go down and, over a number of decades, that could lead to significant savings.

Of course, even if the interest increases and the repayments along with it, a full-time employed graduate should be able to shoulder the rise. It is a useful option when the student loan balances are still quite high, and the available income is not so big.

Find the Best Program

Effectively consolidating private student loans is as much about finding the best deal as getting the best loan is. With the wrong terms, the program can turn out to be quite expensive. With the development of comparison websites, the task of finding the best program is made easier.

Online lenders tend to offer the best deals in almost every category of financing, but sifting through the hundreds of deal, offering specific terms and conditions, to find the one that matches the needs of the applicant, is simplified too.

Remember, a loan consolidation program should make repaying debts much easier, so before choosing a program know your current debt, calculate the affordable monthly repayments, and ensure the repayments of the new loan beat the old ones hands down. Then student loans can be gotten rid of in confidence.

Debt Settlement Programs: Four Steps Every Applicant Must Consider

It might seem that a debt settlement program is the solution that can save your financial future. Technically this is true, but it is essential to choose the right program if any real benefits are to be enjoyed. The problem is that pressures from creditors can rush us into choosing the wrong program from unscrupulous lenders.

The setup of the financial services sector is anything but clear-cut, and the largest firms and institutions actually own many of the smaller services. This means the debt to a single bank (like Citibank, for example) can be much greater than thought.

And while choosing debt relief is the wise decision, it is important to keep in mind the difficulties in securing good terms when the debt to a creditor is very high. Still, there are many debt settlement options available online.

The Debt Network

It is important to realize just how interconnected so many of your branded credit and debit cards, and utilities are. Many are simply branches of the same bank or financial institution. This means that debt owed to a bank may be vastly larger than first thought, making it difficult to get good terms on your debt settlement program.

Not everyone knows that three of the biggest banks in the US are also involved in many of the largest utilities companies. For example, Citibank owns AT&T Universal, Sears and most of the gas cards on offer (Chevron, Exxon etc). Discovery, meanwhile, owns Lowes & Sams cards, and the FIA cards are owned by Bank of America.

What this all means is that when it comes to choosing debt relief options, it is important to realize that more than a single credit card debt is part of the packet. The card provider will add on everything, making it possible for the debt settlement deal to be rejected by the lender.

Avoiding the Online Trap

Financial services provided over the Internet need to be carefully considered before committing to anything. There are, unfortunately, many unscrupulous lenders and financial service providers who are willing to take advantage of consumers, and excellent debt settlement programs can turn out to be traps.

But there are steps that can be taken to ensure such traps are avoided. They are:.

1. Only Trust Lenders Who Ask For Statements

There is a tendency for unscrupulous lenders to talk up their fantastic offers in an effort to get what they need as quickly as possible. Often, they do not even look for bank statements or confirmation of financial status. But the right debt settlement plan depends on your specific situation. So, avoid those that do not seek relevant documentation.

2. Experience Is Essential

It is generally not a good idea to choose a debt settlement program from a lending firm that has been in businesses of less than 5 years. Experience is essential in this sector, so the last firm needed to manage your finances is a start-up company. Settle for a firm that is at least 5 years old.

3. Always Check Lenders Out

It is completely foolish to trust any online lender on face value. Always take the time to check on their credentials, and feel completely comfortable before choosing a debt relief program. So, check out their BBB Reliability Report and know whether consumers have been complaining about a prospective lender.

4. Seek Out A Licensed Attorney Based Firm

Attornies are governed by the BAR Association, not the FTC. The advantage is the consistency of the BAR Association, whereas the FTC regulation changes can play havoc with schedules and plans. Also, the BAR Association insists on extremely high standards so debt settlement companies can be relied upon.

Debt Settlement Programs Or Bankruptcy: How To Choose Wisely

When managing debts becomes too much, a choice needs to be made. Should a file for bankruptcy be made, or should one of the debt settlement programs be applied for? This is a choice that needs to be thought over deeply before any move is made.

The reason this decision is not that simple is that there are serious repercussions to choosing bankruptcy, and even if that is the only logical option, there are a number of bankruptcy chapters under which debtors can file. Increasingly, a Chapter 13 bankruptcy plan is becoming the preferred option, but other chapters are 7, 11, 12, and are just as efficient in ridding oneself of debt.

However, while debt settlement is more expensive and less damaging to credit histories, they do not always turn out to be the saving grace that applicants would like them to be. So, when clearing existing debts, which of the two is the right one to choose?

Check Your Own Status

The first step in ascertaining the best choice is not to look at the options, but to look at yourself. Depending on your credit and financial status, either bankruptcy or a debt settlement program will provide the most effective solution. And reading your credit report is the starting point.

Once the true extent of your debt problem is confirmed, it is possible to work out what the right debt relief option is, based on what kind of deal is affordable. When debts are slightly greater than income, then a Chapter 13 bankruptcy plan is likely to be the right choice. When it is very much greater, Chapter 7 might be the most plausible choice.

However, if there is still some income more than debts, then a settlement deal is likely to be affordable. The complication is that, while a settlement involves clearing existing debts for a fraction of their worth, it still requires a lump sum payment to complete the deal. Saving up that lump sum is the problem.

Terms of Bankruptcy Chapters

There are four chapters to the Code of Bankruptcy that any bankruptcy case can be filed under: chapters 7, 11, 12, and 13, The key differences between them relate to the extent of the poor financial situation an applicant has, and the likelihood that a debt settlement program cannot be approved.

Chapter 7 is filed by those seeing liquidation or straight bankruptcy where debts are completely written off. The other options relate to reorganizing debt, with Chapter 11 filed by businesses seeking to reorganize their debt, but not to liquidate. Chapter 12 is applicable to family farmers seeking to reorganize.

However, a Chapter 13 bankruptcy plan is sought by individuals who earn the average income or higher in the state the case is filed in. The court decides on the terms of the debt reorganization, and continuously monitors the repayment progress. So, clearing existing debts is done under strict conditions.

Bankruptcy or Settlement?

The basic deciding factor is cost, with the fees associated with a debt settlement program almost double that of the costs of filing for bankruptcy. But there is also the matter of monthly repayments and other terms associated with the type of bankruptcy. If the Chapter 13 bankruptcy plan is more affordable than the settlement plan, it makes sense to choose the former.

But the consequences of the decision need to be considered too. For example, clearing existing debts through a settlement plan will reduce a credit score by around 50 points, but bankruptcy cuts it by a minimum of 200 points. And it will be on your record for 10 years, while with a settlement plan, credit is returned after 2 years.

How Debt Consolidation Loans With Bad Credit Can Solve Credit Card Debt

The prevalence of credit cards in society means that it is almost impossible to get by without one. From buying low-cost flights to getting the biggest bargain on ecommerce websites, the credit card is basically an essential tool of modern living. But conversely, it is also one of the principal contributors to personal debt, prompting many to search for debt consolidation loans with bad credit.

For millions of Americans, the pressures created by credit card usage can be extremely high. Consolidation is seen as the most proactive way to set about dealing with the debt, and getting back on financial track. But securing consolidation loan approval despite having bad credit scores does depend on satisfying certain conditions.

The big question, however, is whether or not taking out a debt consolidation loan can really make any difference to the pressure created by credit card debt. Thankfully, the answer is that it can.

How Consolidation Clears Credit Card Debt

Unfortunately, it does not take long for the minimum repayments due on a credit card bill to become too much to handle. With the interest rates as high as 21%, just 2 or 3 missed payments can almost triple the size of the minimum payment. But even when seeking debt consolidation loans with bad credit, the benefits are clear.

Consolidation involves combining all of the credit card balances into one sum, then taking out a single loan to repay the amount in one go. It means that, not only is only one debt to be repaid, but that only one interest rate is charged, thereby reducing the overall cost of the debt and making repayments much more affordable.

Securing consolidation loan approval with bad credit requires some effort, but the effort is certainly worth it. After all, with credit card balances paid off, credit scores are increased. This then means any future loan and credit card application is more likely to be approved with good terms. But how can a debt consolidation loan be secured with bad credit?

Why Bad Credit Does Not Matter

Many people think that applying for a debt consolidation loan with bad credit is doomed to failure. After all, the size of the loan is often quite big – perhaps $10,000 – and the chances of success seem to be minimal.

But the fact is that low credit scores are actually not very important at all. Lenders are much more interested in other issues, such as affordability. They know that a credit score is only a reflection of past actions, but reveals nothing regarding a current ability to repay. Therefore, regardless of a credit rating, securing consolidation loan approval is always possible.

In terms of proving affordability, issues like employment status and income are important, as is the state of the debt-to-income ratio that the applicant might have. Of course, since a debt consolidation loan is designed to clear debt, lenders are more open to approving those applications.

Finding The Best Lender

The task of finding the right lender is a little complicated when attempting to secure a debt consolidation loan with bad credit. While the low credit score does not prevent approval, the terms of the loan might not be so good. So, finding a lender that offers good terms is important.

Online lenders tend to offer the best deals usually, and because they specialize in bad credit lending, securing consolidation loan approval is not difficult with them anyway. Their terms usually mean a lower interest rate and, most importantly, a longer repayment term. That way the monthly repayments are kept low, ensuring the debt consolidation loan is the most affordable possible.