Debt Consolidation Loans Fair Debt Collection Practices Act Know Your Rights As A Debtor Free Debt Consolidation Quote How To Find A Good Debt Consolidator Online Credit Card Debt Consolidation Programs A Complete Guide Consolidating Your Debt Face Up To Your Debts They Won T Go Away
Debt Consolidation Loans
Wouldn’t it be nice to make just one payment per month instead of several? Most of us not only have a mortgage payment. We have car payments, credit card payments, student loans, etc.
If you have been living in your home for a reasonable amount of time and you have acquired enough equity, you might want to consider a debt consolidation loan.
A debt consolidation loan is using the equity you have acquired in your home from monthly payments and appreciation to pay off all of your outstanding debt, leaving you with one monthly payment instead of several.
Consolidating your debt has the potential to save you a lot of cash on a monthly basis if you have accumulated a lot of debt.
The interest rates on credit cards alone are considerably higher than that which you would receive on a mortgage.
Another benefit is the interest you pay on your debt consolidation loan is tax deductible, unlike your other debt.
Consolidating your debt is a great way to save money, but don’t just dive in. Take the time to educate yourself about the mortgage industry and definitely shop around for the best deal. The mortgage industry is very competitive, so let them compete for your business.
Another benefit to consolidating your debt is that it will help your credit score go up.
The accounts you have outstanding that you owe money to are called open trade lines, by paying these off and than closing a few of them to keep your debt under control, you will be effectively increasing your credit score over time, which is how lenders determine your payment history.
Dealing with creditors and debt collection agencies is always a difficult ordeal. Their annoying and persistence way of tracking you down no matter where you are can be very frustrating for you, your family and even your fellow colleagues.
Fortunately, to protect the overly abused debtors, there is the Fair Debt Practices Act or the FDCPA for short. It is a federal law that bans unfair debt collection practices which will affect the quality of debtors’ life considerably.
While this article does not list the whole act, it is good to know the common illegal debt collection practices so that you will not be intimidated and know how to deal with them.
1. Contact third parties including your families, friends, neighbors or employers about your debt.
Unless the court has given them permission for your creditors to do so, it is illegal for them to contact third parties about your debt. But they may contact third parties for the purpose of locating you. Even so, creditors must not reveal why they are looking for you, unless you are a minor.
2. Contact you at odd hours of the day – late night or too early in the morning.
Under normal circumstances, any time between 8am to 9pm is a acceptable time for them to call. Under no situation should your creditors call you when you are sleeping, for example at 3am.
3. Contacting you repeatedly by phone or not identifying themselves when they called.
4. Continue to contact you when you are represented by a lawyer or when they have received a written request from you to cease contacting you. ( a cease letter)
5. Make threats, use obscene, profane or abusively languages and comments on you.
6. Misleading you that they are affiliated with any state or federal government, or the legal status of your debts.
These are just some of the common illegal debt collection practices. The FDCPA bans just about any abusive, dishonest and unfair debt collection practices that might affect the quality of your life greatly.
To find out more about your rights as a debtor, visit www.ftc.gov/os/statutes/fdcpa/fdcpact.htm for more information. It’s always good to know your rights as they give you a means of handling your creditors such that they don’t take advantages of you. Nevertheless, understand that the purpose of the FDCPA is to help you deal with creditors and not to ignore them and your debts.
If you need to bundle your bills and creditors into one monthly payment, you may need a debt consolidation company. Unsure how to find one? Try looking for one online! By searching the Internet for a debt consolidator, you have access to hundreds of companies that can help you manage your finances and control your debt. To find one, try these simple tips:
Do a simple search.
Use your favorite search engine, like Google, Yahoo or Excite, to search for basic terms like “debt consolidator,” “debt consolidation,” or “debt management.” Chances are you’ll end up with millions of hits! All you need to do is narrow it down to a few different companies for closer scrutiny and comparison. To narrow down the choices, look for…
A free debt consolidation quote.
There are, unfortunately, lots of scammers and thieves who are hoping to take your money and run. And, in many cases, they pose as legitimate debt consolidators and prey on folks who have found themselves in a financial bind. And they won’t help you consolidate your debt! Instead, they take their fee and never offer you any services in return. So how do you spot a scammer? Make sure the company offers a free debt consolidation quote. Unscrupulous thieves will often try to charge you a “fee” just to review your case–before they do any work for you! Most legitimate debt consolidation companies will review your paperwork–like bills, income and credit history–and then give you a price quote so you know how much their service will cost. Once you think you’ve chosen the right company…
Check with The Better Business Bureau.
To make sure the debt consolidation service is legitimate, and that no complaints have been filed against them, check with the Better Business Bureau. They’ll be able to tell you if consumers and customers–like yourself–have filed any formal complaints about the company’s business practices, costs or services. You might also look to see if the company belongs to any national associations or organizations that regulate or monitor its services.
It’s easy to find a debt consolidator online as long as you’re willing to go that extra step to ensure the company is legitimate. Never work with a debt consolidation company that you feel is neglecting your case because they’re only interested in collecting a fee.
Many of us have credit cards these days, and a great many people find that making multiple monthly credit card payments a struggle. If you are one of those in this situation, then you may want to consider taking out a credit card debt consolidation loan. Before doing anything, it is very important to look at all of the options for consolidating your credit card debt.
One of the easiest methods of credit card debt consolidation is to simply transfer all of the balances from your high-interest credit cards onto another a low-interest credit card. Many credit card companies offer an introductory rate for credit card debt consolidation if you transfer the balances of your store and credit cards to their card. Obviously, before you can perform a balance transfer for credit card debt consolidation you need to be sure that the total outstanding balances of all of your credit cards is within the limit of the card that you want to transfer it to.
You also need to choose one with a low APR for balance transfers to be able to have an effective credit card debt consolidation. Many credit cards offer 0% for balance transfers over a fixed period of time which is ideal for credit card debt consolidation debt consolidation. Ensure that you can make sufficient payments to clear the outstanding balance that you transfer for your credit card debt consolidation within the stipulated time period. If this is not going to be possible it is important to understand that you will be liable for interest on your credit card debt consolidation transfers at the standard rate. Do not perform a balance transfer for credit card debt consolidation to a card that has high rates for balance transfers after the initial low interest period if at all possible as your circumstances may change and you might need longer than this duration which will mean that your balance accrues interest.
One other form of credit card debt consolidation is to borrow money from a trusted family member or friend. You can pay off your credit cards and then pay the lender a predetermined amount at agreed amounts on a regular basis. This informal form of credit card debt consolidation can work well for a lot of people but it is important to have the loan conditions in writing to ensure that there are no misunderstandings at a later date. There are also many non-profit organisations who can help you to negotiate reduced payments to your credit card companies without having to resort to taking out a credit card debt consolidation loan.
Is it necessary to consolidate your debt?
Debt consolidation is important especially when you owe lots of loans and debts to different creditors.
Having credit cards is very common in America. So much so that people tend to carry at least six to eight credit cards in their pockets. They make unnecessary purchases to take advantage of advances through a credit card. They find themselves in undue situation from where they are unable to pay even their minimum balance. This has resulted in tremendous growth of credit card debts over the years.
The best way to get rid of such a credit card debt is by paying the balances on time. But this is not possible for everyone as they are trapped under a very high interest rate. One of the best ways to get out of this situation is by consolidating your debt.
How does consolidating debt actually work?
Consolidation debt can help a person lower the amount of debt and pay his unsecured credit debt faster. He can take care of his debts by merging all his payments into a single loan at a lower rate of interest that what he was actually paying. If your debt is credit card debt then consolidating debt is probably the best option.
A person who does not undertakes debt consolidation
Record numbers of people are struggling under the burden of heavy debt, and when things start to get unmanagable it’s easy to try and ignore the situation in the vain hope that the problem will go away. Of course, we all know deep down that our debt situation has to be tackled, however stressful and scary the prospect might be. So how can you go about facing up to your debts?
The first thing to do is take a long look at your financial situation. How much money can you afford to devote to repaying debt? Are there any ways to increase your income? Are there any ways to reduce your expenses? By drawing up a sensible and honest budget plan you’ll at least know the true extent of your problems, and you’ll be taking the first step to getting back in control.
Next, you need to look at your repayments and expenses, and identify which are the most important. Your mortgage or rent should always be your number one priority, closely followed by essential bills such as electricity and water.
Make sure your budget plan will cover these essentials first, then add in the costs of daily necessities such as food. After you’ve done this you should have a figure for the total cost of your most important expenses. Subtracting this figure from your total income will give you the amount you now have to devote to reducing your debt.
It’s vital to cover the minimum repayments on as many debts as possible, as charges for late payments or missed payments will only push you deeper into the red. If you find that you don’t have enough spare funds to make all your minimums, then contact your creditors and politely explain that you’re experiencing financial difficulties and need help. This step can be daunting, but remember that the person you speak to will only be an employee of a company and won’t take the situation personally.
Most creditors will be happy to come to some arrangement with you to reduce your monthly payments, either by restructuring your debt over a longer repayment term, or switching to interest-only repayments for a while.
If after trying to renegotiate your debt you find you still can’t make ends meet, it could be time to reconsider a consolidation loan. Debt consolidation works by taking out a single large loan to pay off all your smaller, more expensive debts such as credit cards and the like. By getting a loan with a lower interest rate and spreading your repayments over a longer term, you can reduce your monthly bills quite substantially.
Unfortunately there are drawbacks to consolidation loans too. You’ll be going deeper into debt with yet another loan, and will probably end up paying more in interest charges in the long term. You might also find it difficult to get a consolidation loan unless you own your own home or have other assets to secure the loan with, and homeowners will risk losing their home in the future if they can’t keep up the repayments. For these reasons it’s best to think carefully before choosing the consolidation option.
No matter whether you choose a consolidation loan or not, it’s important to remember that debt affects huge numbers of people and it’s nothing to be ashamed of. The only way out of your debt problems is to face up to them, and try to get back in control of your finances..
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