Low Rate debt consolidation
Debt consolidation loans are, and have been, the knight in shining armour for those people who have been afflicted with bad credit history. Quite often those who do not go down the route of debt consolidation loans for people with bad credit often end up in a far worse position due to their worsening credit status and financial situation.
The general purpose of a debt consolidation loan is that it replaces all accumulated debt, whether it be credit card debt, faltering hire purchase agreements, personal loans, it doesn’t really matter but by combining them all into a much more manageable debt consolidation loan it suddenly becomes a lot easier to take a grip of previously out of control finances.
The reason that debt consolidation loans are so beneficial to people with a bad credit history is simply that they are actually designed to deal with the problem of runaway debt and as such are seen by many financial institutions as the ideal product for people with a bad credit history.
It was not always the case though, as people with bad credit history were more often than not declined for loan applications irrespective whether they were for consolidation purposes or not. But, eventually, financial institutions started to realise that they were actually harming themselves by distancing themselves from these customers, as their refusal to lend to potential borrowers who had a bad credit history often led to an increase in accounts with overdue or late payments, as many of these customers were actually trying to avoid further tarnishing to their history by seeking out a debt consolidation loan.
Needless to say, that nowadays, debt consolidation loans for people with bad credit history are commonplace as it is seen by lenders as a positive move on the behalf of the borrower rather than a negative.
So, the initial question was, ‘Are debt consolidation loans for people with bad credit a good thing or a bad thing?’ and the answer is it can be both.
The GOOD is that there is now a way for people suffering with a bad credit history to get help and that their debt as a result will become more manageable.
The BAD is that these debt consolidation loans are usually at a higher interest rate.
It is your responsibility to check out all the current rates available from different lenders, and it is never wise to jump in and go with the first lender that offers you a debt consolidation loan and debt settlement package, as may be the temptation, especially if you have been refused a debt consolidation loans elsewhere.
Once you have decided upon a lender for your debt consolidation loan, the first step of the debt eliminating process will be to make an exhaustive list of all debts regardless of their size, remember you are consolidating ALL debt, not just specific problem areas.
A significant part of the process of debt settlement is the job that your debt consolidation loan provider does when negotiating with your creditors. They will often try to get certain debt written off or reduced as their guiding principal is to save as much money for the debtor as possible.
It is often considered that debt consolidation loan providers are best placed to do this job as they have the time and the negotiating skills required to achieve large reductions in debt for the borrower but, it is something that I suggest you are fully able to do yourself for no cost.
Also there are certain methods of debt removal that are both legal and ethical, these methods are rarely used and can reduce your debt to zero in as little as three years with no increase to payments and they will work even quicker when used in conjunction with a debt consolidation loan. Needless to say the banks and financial institutions have known about these methods for years but, it is not in their interests for you to know about them, why? Because it would cost them millions!
You can find out more about these methods by following my links at the end of this article, you really should know about them prior to applying for a debt consolidation loan.
The first step to dealing with your debts is admitting that you have got a problem. Only then can consolidating debt be the solution to your debt problems.
Debt Consolidation can happen in a number of ways, the most common are through either a debt consolidation loan or through a no loan consolidation.
Lets looks at the two ways for consolidating debt in more detail:
1: Debt Consolidation Loan – Allows you to consolidate your existing unsecured debt into one single loan. Choosing a debt consolidation loan for consolidating your debt can reduce your monthly payments, lower your interest rate and make it easier for you to manage your debt.
Debt Consolidation Loans are usually secured against your home, but this will offer you a number of additional debt consolidation terms which you just could not get with unsecured consolidation.
2: No Loans Consolidation – A secured loan is not suitable for everybody, but there ways to consolidate debt without the need for any further loans. These are otherwise known as Debt Management Plans and allow you to make just one reduced payment to your debts, no matter how many unsecured creditors you have.
Remember, you can consolidate a number of debts choosing the above methods, such as credit cards, store cards, unsecured loans and overdrafts.
Discover more about what YOU need to know about debt consolidation, see the following recommended reading:
Advantages and Disadvantages of Debt Consolidation. The only way for you to understand debt consolidation is to be aware of both the advantages and disadvantages of consolidating debt.
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For loads of individuals in a slide down a financial slope, a consolidation loan is a great alternative to bankruptcy and although consolidation isn’t instant, it will improve your credit in the long run. At the end of day debt consolidation is an accepted and often effective approach for managing a burdensome debt load. A consolidation loan, just as any other financial obligation, is something that needs serious consideration and isn’t recommended to be used to make further purchases but is aimed at those who have debts and cannot presently afford to make their monthly payments.
The basic concept of debt consolidation is to merge all of your current debts including loans, credit cards and store cards from multiple creditors into a single new loan. The combining of your debt into only one payment, usually results in a smaller payment that gives you enough additional cash flow to pay off your debt.
Debt consolidation is often advisable when somebody has brought on themselves a substantially large balance of credit card debt, sometimes with numerous credit card providers. The key thing to remember is that the necessity for debt consolidation should not give you a feeling of embarrassment but is supposed to be thought of as a positive, smart and healthy move toward beating your ever mounting high interest rate debt liabilities and getting on with your life.
Debt consolidation will improve your financial life by decreasing your debts to a single payment, oftentimes as much as 50% less than what you are paying out now. These consolidation loans are perfect for lowering monthly payments and allow you to solve the underlying problems of high debt without taking drastic steps such as considering declaring bankruptcy.
Even though debt consolidation is not a very difficult concept, there is one major downside you will want to consider. Consolidating existing unstructured debt into only one personal loan may save on your monthly debt and is often the first step required in the move to living a financially independent life. On the other hand, despite the fact that
your monthly payments will most likely decrease, consolidating your debts may mean it will take longer overall to become debt free. Usually, this longer payback period is not the biggest concern as almost all of those pursuing a consolidation loan are steadily getting underwater with their current monthly obligations anyway. Even if the payment period is extended, the lower monthly payment is worth it. In addition, from a psychological perspective, consolidating monthly bills can give a person a lessening of panic and a feeling of freedom and optimism toward building a brighter financial future. The choice of debt consolidation is available for someone who needs to take control of their fiscal outlook and is a valid approach that many financially struggling people utilize to make headway in escaping the debt trap. Debt consolidation is a method by which you can overcome an ever declining debt situation.
With the average American household having over ten thousand dollars worth of credit card debt, consolidation is one of many solutions to this dilemma and the options available for consolidating your debt have, in the past, not been so easy to take advantage of. At the same time that consolidating your debt offers a great solution and can be very helpful, your research needs to be done properly as any sort of financial strain can add additional stress to our already stressful lives. This stress can repeatedly cause people to make impulsive financial decisions. People who are pondering a consolidation loan should make themselves fully aware of the pros and cons.
An option enabling you to combine all your debts into a single loan, be it secured or unsecured, with reduced payments is a financial must have for a lot of people. At the same time debt consolidation isn’t a silver bullet, for many it’s a welcome answer to all those bills and collection agencies that are calling you. For those who feel like they’ve run out of options, debt consolidation may be the answer for you.
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I have two credit cards that I have used over 5 years ago and never paid back. The total of the two cards FIVE YEARS AGO was $1000. Of course, by now, it should be close to $3000 because of all the interests.
What does debt consolidation do? More importantly, can it REALLY remove or reduce the interest that built up over the last 5 years?
When doing a search for debt consolidation services, I get THOUSANDS of results. Which debt consolidation services are better?
Detailed answers would be appreciated.
Update: Am I correct to assume that if I leave the debt as it is, I can have it completely wiped off my credit card two years from now as if it never happened?
Tying up with multiple debts won’t distress your present situation anymore as now you can consolidate your multiple debts with cheap debt consolidation. Cheap debt consolidation wipes off the tension of multiple debts installments with single manageable debt.
Cheap debt consolidation lessens the burden of multiple debts especially when the situations of borrower is under immense pressure or cannot manage multiple debt monthly installments. Cheap debt consolidation provides the strong support to get rid off from burden of multiple debts.
In cheap debt consolidation, borrower relieves from multiple debts as it includes consolidating the multiple debts in one single debt at lower interest rate or flexible repayment option.
Cheap debt consolidation helps the borrower to reduce borrower’s outbound payments to the various lenders as he only responsible to the one lender fro various multiple debt. Lender can be new or one of the existing lender i.e. whosoever offers lower interest rate for debts.
Borrower by seeing his condition can avail any one form of cheap debt consolidation as they can be categorized as secured and unsecured. Secured form of cheap debt consolidation is favored against valuable collateral of the borrower. In this borrower can avail secured debt consolidation for the amount ranging from £5,000 to £75,000 and that too at easy repayment period of 5-30 years. Collateral makes debt consolidation at cheaper rates as lender’s risk is equalized with collateral.
Borrower who doesn’t have collateral can too consolidate their debts at cheaper rates only if they satisfy the lender with handsome salary, repaying capability or with perfect credit score. Well, borrowers with smaller debts find the unsecured debt consolidation a better option as no collateral is placed against the debt consolidation. In unsecured option of cheap debt consolidation borrower can opt for amount varying from £5,000 to £25,000 with easy repayment period of 6months to 10 years.
To avail debt consolidation at cheaper rates, borrower must carry a proper search on online or conventional modes. The search is the ultimate feature that helps the borrower to avail the interest rate at cheaper rates. While searching for cheap debt consolidation, borrower must compare and contrast the loan quotes so that he can decide the best deal which is enclosed with the features. To make borrower’s comparison easier, online calculators are too available on the internet which is of great use to avail cheap debt consolidation.
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