Friday, September 28, 2007

How to hunt for the best debt consolidation loan?

A debt consolidation loan can be a powerful answer to the huge amount of debts people are facing these days. Whether it is debt from credit cards, outstanding loan payments or medical expenses, a debt consolidation loan can certainly help in taking off the burden to an extent. However there are many lenders that offer a debt consolidation loan. How does one shop around for the best loan?

Tips to get started

There are many ways in which you can empower your first experience in shopping for a debt consolidation loan.

• Low interest rates: This should be the very first criteria you will check in a loan. The rate of interest will determine the amount of monthly payment you will need to make. It will also have a significant impact on how much money you’re going to save each month, not to mention planning for your finances.
• Know the value of your property: The secured debt consolidation loan requires you to submit some form of security – usually in the form of the existing property you have. However, before you even start looking around for a debt consolidation loan, you need to ascertain the appropriate value of your current property. This will help you negotiate for a good offer and a good amount on the loan as well.
• Never accept the first offer: This is one of the biggest mistakes people make while shopping for a debt consolidation loan. You need to look around for the best available deals in the market and find one which is best for you. Accepting the first offer is the worst thing you can do.
• Get free quotes: Every borrower is entitled to ask for a free, no obligation quote from a debt consolidation loan lender. Therefore, make sure you ask for quotes from at least 3 different lenders. This will give you a fair idea of the going rate and will also help you compare.
• How much debt to be consolidated: Before you start shopping for a debt consolidation loan, you will also need to determine the amount of existing debts you wish to consolidate. After this, you will also want to decide on the lowest amount you can take on.
• Use the Internet: The Internet can be a great place to do a comparison on various lenders for a debt consolidation loan. Most of the websites have application forms which you can fill up online itself. You can get a response in an instant as to whether you will qualify for the debt consolidation loan or not. These online lenders will also provide you with customized loans depending on your income, financial situation, goals etc. Therefore this way you can make a better informed decision as well.
• Get the help of a broker: Hiring the services of a lending broker will stand you in good stead. Typically these lenders have numerous contacts as far as lending companies go and they can help you find the best deals possible.

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Friday, September 21, 2007

Could debt consolidation loans really be an answer to a debt free society?

In today’s age of rising costs, default rates and delinquencies, debts have risen to an all time high. In such a scenario borrowers with existing liabilities can turn to a debt consolidation loan for support. Not only does a debt consolidation loan provide a lower interest rate, it also helps to consolidate debts under one umbrella.

The rising debt scenario

On an average the interest rates of most loans have shot up drastically in the last couple of years. The booming influence of the sub-prime market coupled with the fact that borrowers are being approved without adequate screening, have led to an ever-increasing rise in borrowers – but who cannot pay up! Unable to pay up and trapped in liabilities, it’s a sorry situation for both the lender and the borrower. In such a scenario, it’s only natural that people who have large debts will want to turn to a solution that can offer them with reduced interest rates and an opportunity to consolidate these debts.

The answer in the form of debt consolidation loans

A debt consolidation loan has been formulated with one single objective in mind – to consolidate existing debts of customers, so they can lead a happier life. With more than 20 bills to be paid every month, almost every debt-ridden person yearns for a simpler solution – where he doesn’t have to keep track of 20 different payments! The answer then lies in a debt consolidation loan.

Why is a debt consolidation loan so good for debt?

Imagine a loan that offered you a lower interest rate, placed all your existing debts under their care and also provided you with extra cash? That’s the debt consolidation loan for you! It provides you with attractive interest rates that are significantly lower than existing rates, helps you place all your credit card, loan debts and medical bill expenses under the cover of this single debt consolidation loan. This can not only help you get more organized – because now you just have to pay one single bill – but you also get the entire loan amount in a lump sum. This way the debt consolidation loan also provides you with some extra cash in hand. You can use the loan amount to pay towards all your liabilities and expenses.

Miscellaneous expenses

You might need to paint your existing home, or do up your kitchen in a more modern manner. You may even want to purchase some new upholstery for your living room! The debt consolidation loan can provide you with much-needed extra cash to take care of all these miscellaneous expenses. This is something you could never have imagined earlier – when you had all those liabilities and expenses to take care of! But the debt consolidation loan makes all this possible.

Despite all the criticism and negative opinion surrounding the debt consolidation loan this is one ticket to managing debts successfully. It almost seems too good to be true especially since it offers the twin advantage of debt management as well as savings!

Debt Consolidation
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Saturday, September 15, 2007

The many dangers of a debt consolidation loan

Description: A debt consolidation loan may provide great respite for those who happen to have large existing liabilities. However getting a debt consolidation loan need not always mean savings. Nor does a debt consolidation loan truly free you from debt. Shocked? Read on to know why all that you see is not what you get!

All that glitters is not gold

For many people a debt consolidation loan implies convenience - the convenience to pay one single bill instead of 20 or 30 odd bills in a month. It also implies hassle-free consolidation of all existing liabilities under one umbrella. What’s more, if the interest rate is supposedly lower than existing ones, what could be better than a debt consolidation loan? Fact is that convenience alone is no guarantee of the fact that you will incur savings.

The interest rate

Most of the time a debt consolidation loan will promise you a lower interest rate than your current liabilities. But ever wondered why a bank would do charity to save you from debt? There is always a catch in the agreement of the debt consolidation loan. To know if the interest rate is truly lower than current rates, be sure to check interest rates on each of your existing liabilities. Then check this with the offered rate on the debt consolidation loan. If it really is lower, the next thing you need to check is if this is a promotional rate or not. Many banks will try to lure unsuspecting customers by offering a debt consolidation loan with a low interest rate. This is usually a promotional rate and ceases after the promotional period gets over. Therefore, be sure to read the fine print of the agreement very carefully to check what is the interest rate after the promotional period. Chances are the rate will be much higher than even normal rates!

Shop around

As a borrower of a debt consolidation loan only you know how risky it is to entrust all your debts with a single bank. You do not want to lose all your hard earned money, do you? So the best thing you can do is to shop around, hunt for the best deals in the market and do your own bit of research. This way you will not only learn about promotional schemes on the debt consolidation loan but also find ways to negotiate and bargain your way through. Many times credit unions tend to provide more attractive rates than banks. Be sure to check on them as well.

Unsecured debt consolidation loan

There are the secured and the unsecured varieties of a debt consolidation loan. In the unsecured variation you do not need to provide any security or collateral to the bank or credit union. This is especially useful for those who do not own any security – like for example paying guests, tenants, dependants who live with parents, as well as other such people. Repayment periods of an unsecured debt consolidation loan lie between 6 months to even 10 years.

Debt Consolidation Loan
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Saturday, September 8, 2007

What is debt consolidation?

Wallowing in debts? There’s relief! Read up on Debt Consolidation and find out how it can help you pay of your debts at lower interest rates! It’s your window to financial freedom!

The harsh reality of economies all around the world demands that people continue to live pay check by pay check and often on credit cards offered by credit cards companies and banks. Living with debt is a common trait of our society. In fact, most people have more than just one debt that they need to clear. It is this circumstance that has given birth to the idea of debt consolidation.

The basics

Simply put, debt consolidation is the process of taking one loan so that you may pay all of or at least some parts of your other existing loans. You can do this by first pulling together all the unsecured loans that you have and then creating a single loan out of it. To be granted that new loan as part of debt consolidation you need to place collateral with the lending institute and most commonly it’s the house which is mortgaged.

The advantage

The advantage of debt consolidation is that the interest rate can often be lower than the many interests you were previously paying. This is so because the lending institute already has collateral, such as a house and hence a very low risk of losing its money even if the borrower goes bankrupt.

Research and implement

These days, you can even go online to find a variety of online services that will help you calculate the interest after debt consolidation so you know in advance if it is worth it or not. In fact, offering a “low interest rate loan” after debt consolidation is also one of the most common email scams. But here are things you can do to ensure that debt consolidation will be a safe path for you.

For example, if you are a home owner then you can take out a home equity loan. The advantage of the home equity loan is that the interest on it is tax deductible and the interests are already low to begin with. These fixed rate loans run for 15 years and have some fees in the initial process. If a person has managed to maintain a fairly good credit history, then there is the possibility of qualifying for debt consolidation through credit unions. While the interest rates might still be high, chances are they will still be lower that what you may have been paying the credit card companies. And believe it or not, many customer service agents at credit card companies actually have the authority to even reduce interest rates when speaking with you just over the phone! So sometimes, asking nicely or negotiating a better interest rate just might do the trick.

However, debt consolidation is by no means a magic wand that can salvage you from your financial crisis. Often companies that claim to take care of all your debt problems at a lowered interest rate might not be the best option. So keep a sharp eye out for conditional or hidden fees. Just keep in mind that the best way to really cut down on your debts is to cut down on all extra and unnecessary expenses while trying to clear all your dues on time.

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Saturday, September 1, 2007

What you should know about a debt consolidation loan

A debt consolidation loan can be your best friend when you are juggling too many debts. This article clearly illustrates the point and will explain the different kinds of loans that you can opt for!

Living with debts is a seemingly natural but a harsh reality in our lives. We borrow a little for college, some for our car and a bit more for weddings and honeymoons. Big or small, debts have a way of mounting. Which is why, sometimes it might be a good idea to look into a debt consolidation loan.

Debt consolidation

When you take a loan in order to pay all your existing loans or some of it, then that process is called debt consolidation. This can usually be done by putting together all your loans and then proceeding to create a single loan out of it. But in order to be granted a new loan to complete the part of the debt consolidation process, you also need to be able to put collateral with the lending organization.

Debt consolidation loan

Debt loan consolidation can be done in two ways; one may request either an unsecured or a secured debt loan consolidation. Both of these practices have advantages as well as disadvantages. Let’s take a quick glance at them now.

The secured debt consolidation loan

A secured debt consolidation loan can be requested for by putting a property as collateral. Sure, this does put your property, most commonly the home, at risk because in case you cannot pay the loan back you will lose your property. However, if you have home equity then you can use it to get a higher amount of loan. The interest that your lender might charge on the secured debt consolidation loan would also be generally lower than that charged on an unsecured loan.

The unsecured debt consolidation loan

When you apply for an unsecured debt consolidation loan, you are basically asking to be given a loan without having to put collateral with the lending company. While it puts none of your properties at risk of being repossessed by the lender in case you go bankrupt, the interest rate charged on your unsecured debt consolidation loan will be relatively higher than the one charged on a secured loan. Chances are that you will also be required to clear an unsecured loan in a shorter duration of time than a secured one. If you are sure of your financial situation for the future then this kind of loan is a good option.

Hopefully, this has given you some idea on the kind of debt consolidation loan you would be interested in. The kind of loan that you take out is a personal choice you have to make and often it is a choice dictated by your personal circumstance. But make sure you have shopped around at several lenders before deciding on one. The advantage of a debt consolidation loan is the fact that it can help you to reduce the payments you make every month. This is most likely done because of the lowered interest rate you will be paying on your consolidated debts. So keep that in mind when you do decide the kind of loan you want to be issued.

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