1 year, 10 months ago
What are your thoughts on debt consolidation?
We have tons of debt. Times are tough and we are falling behind on bills and the mortgage. What are your thoughts on debt consolidation? Is it worth us looking into? What are the pros and cons of debt consolidation? Any tips or thoughts would greatly be appreciated! The only other choice at this point, is riding out the storm and praying we can get back to working more. 
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M$10 Answers
Debt consolidation, if that is what you really do with it is great. Getting a small loan to pay off the major important debts and then having only one small payment a month is great. However 90 percent of those who take out a debt loan do not follow through with actually paying their debts. Instead they see the loan as more fun money, leaving them with yet another loan.
Debt consolidation through a company that will pay your bills for you, while many see it as a bad thing, for those who use their service it can be a life saver. You don’t really see the loan and a company pays your bills. And they incorporate your monthly fee in with the debts. So you really don’t feel it at all.
However taking a loan out on your own can get you into deeper trouble.
If you choose to get into a Debt consolidation loan a few pieces of advice that I had received from Freedom Choice and Care Credit.
I was told to always ask for a bit more of the loan than your actual bills so you can make timely payments on the loan. So its having the loan pay for the loan until you get majority of the debts paid off.
1- Make sure all of the bills you want paid is listed with a company or on a separate bill pay system of your choice. You can keep some off, Its up to you.
2- Once you get a loan and put it in the bank. DO not touch it.
3- Pay off small ones first. Those that are nominal and can be paid easily. Get them paid and off your credit report.
4- If you can negotiate with the company you owe larger credit bills with to pay the actual amount used. Many Credit card companies will work with you to negotiate a settlement.
5- Make your monthly loan payment from the loan money
6- As you pay off your debts, do not go back into debt. Instead use prepaid debit cards or cash.
7- If you must have a credit card, get one that is backed by a savings account. With some debts off of you, you can begin a small savings account to fund a credit card.
8- And the final rule, if you cant afford it, do not go into debt. Make sure what ever it is that you are purchasing is needed, required or is an absolute necessity.
Debt consolidation through a company that will pay your bills for you, while many see it as a bad thing, for those who use their service it can be a life saver. You don’t really see the loan and a company pays your bills. And they incorporate your monthly fee in with the debts. So you really don’t feel it at all.
However taking a loan out on your own can get you into deeper trouble.
If you choose to get into a Debt consolidation loan a few pieces of advice that I had received from Freedom Choice and Care Credit.
I was told to always ask for a bit more of the loan than your actual bills so you can make timely payments on the loan. So its having the loan pay for the loan until you get majority of the debts paid off.
1- Make sure all of the bills you want paid is listed with a company or on a separate bill pay system of your choice. You can keep some off, Its up to you.
2- Once you get a loan and put it in the bank. DO not touch it.
3- Pay off small ones first. Those that are nominal and can be paid easily. Get them paid and off your credit report.
4- If you can negotiate with the company you owe larger credit bills with to pay the actual amount used. Many Credit card companies will work with you to negotiate a settlement.
5- Make your monthly loan payment from the loan money
6- As you pay off your debts, do not go back into debt. Instead use prepaid debit cards or cash.
7- If you must have a credit card, get one that is backed by a savings account. With some debts off of you, you can begin a small savings account to fund a credit card.
8- And the final rule, if you cant afford it, do not go into debt. Make sure what ever it is that you are purchasing is needed, required or is an absolute necessity.
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M$Report Abuse
There are many debt companies they will Travel Across Borders and Collect the Debt You Are Owed. No matter the destination, your case will be handled in the native language, with that regions cultural differences in mind. Service of debt collection, they upholds there clients’ values and standards - protects your reputation - while also acting within all applicable laws.
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Here are some benefits of Debt Collection
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Rate reduction: You can reduce the interest rate on your bills and debts through negotiation with creditors. If any case you approach a debt collection company, they will negotiate on your behalf. Your creditors (if the debt is sold off) will restructure payments so that you can manage your debts better.
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Debt repayment plan: You will get a debt repayment plan from your collection agencies. The new plan with reduced interest rates will help reduce your bill payments so that you can afford to pay off at least the principal balance in full along with some amount of interest.
*******************************************************************************************************************
Here are some benefits of Debt Collection
***********************************************
Rate reduction: You can reduce the interest rate on your bills and debts through negotiation with creditors. If any case you approach a debt collection company, they will negotiate on your behalf. Your creditors (if the debt is sold off) will restructure payments so that you can manage your debts better.
*********************************************************************************************************************
Debt repayment plan: You will get a debt repayment plan from your collection agencies. The new plan with reduced interest rates will help reduce your bill payments so that you can afford to pay off at least the principal balance in full along with some amount of interest.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
Debt consolidation, when done responsibly and astutely, can help more than it can hurt. Done irresponsibly the reverse would be true.
The first thing to consider is the method by which you consolidate your loans. Using a debt consolidation company is probably one the worst paths to take. Most of the work that they do is something which you could realize on your own by negotiating directly with your creditors. Also, they incorporate fees into your “single” monthly payment. So if you are making a $500 a month payment to the consolidator, $50 may be going to them in fees while only $450 is being applied towards your debt reduction.
Obtaining a debt consolidation loan on your own, or transferring debt from a higher interest credit instrument to a lower one is preferable, but even there you must use some common sense. When closing out accounts, make certain that your former creditor labels the account as “closed at client’s request.” This will prevent the assumption of others when reviewing your credit report that the account was closed by the creditor rather than yourself.
Once you have consolidated your debt it is important to exercise self-responsibility. It is all too easy to fall into the credit abyss spurred on by the sense that your previous debt has now been “taken care of." If you do consolidate your debt, use it as an opportunity to reevaluate your spending habits, create a budget and plot a course to live within your means.
The first thing to consider is the method by which you consolidate your loans. Using a debt consolidation company is probably one the worst paths to take. Most of the work that they do is something which you could realize on your own by negotiating directly with your creditors. Also, they incorporate fees into your “single” monthly payment. So if you are making a $500 a month payment to the consolidator, $50 may be going to them in fees while only $450 is being applied towards your debt reduction.
Obtaining a debt consolidation loan on your own, or transferring debt from a higher interest credit instrument to a lower one is preferable, but even there you must use some common sense. When closing out accounts, make certain that your former creditor labels the account as “closed at client’s request.” This will prevent the assumption of others when reviewing your credit report that the account was closed by the creditor rather than yourself.
Once you have consolidated your debt it is important to exercise self-responsibility. It is all too easy to fall into the credit abyss spurred on by the sense that your previous debt has now been “taken care of." If you do consolidate your debt, use it as an opportunity to reevaluate your spending habits, create a budget and plot a course to live within your means.
images:
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M$
Debt Collection is a Successful Way of Recuperating Due Debts. Debt collection is demanding enough, however when the debt is international it turns out to be, a much bigger challenge. An effective and successful way of collecting debts is to employ a debt collection agency.
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M$
Debt consolidation is now one of the main avenues of people which are buried deep in debt, especially in this time of financial distress. This is one of the sure fire ways to evade delayed charges and increase in interest rates. This strategy to reduce debt may be done prudently if assisted with a financial adviser.
By choosing this the financial method of debt consolidation, I think you would be on your way of reducing your debt to a more manageable level, enjoy tolerable interest expenses, eliminate minor creditors and enjoy a good credit score. The first step in going this way, is to weigh all your possible options to take on the plunge, in order not to make a mistake. Seek the opinion of the financial adviser that is recognized by a Federal agency.
Just to help you out on debt consolidation, I suggest you visit this helpful Mahalo page below:
How to Consolidate Debt
By choosing this the financial method of debt consolidation, I think you would be on your way of reducing your debt to a more manageable level, enjoy tolerable interest expenses, eliminate minor creditors and enjoy a good credit score. The first step in going this way, is to weigh all your possible options to take on the plunge, in order not to make a mistake. Seek the opinion of the financial adviser that is recognized by a Federal agency.
Just to help you out on debt consolidation, I suggest you visit this helpful Mahalo page below:
How to Consolidate Debt
videos:
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
Like most Money topics, debt consolidation has its advantages and disadvantages. When you find yourself in a financial fix, it might sound like the only way out, but it is good to know that it is not just butter and honey. I know only a few people that had gone through debt consolidated and are doing well now, but there are also lot of people who had found themselves in bigger problems after debt consolidation. This is why;
When you consolidate your debt it gives you immediate relieve and takes away the stress involved in paying so many people, because you only have to pay one creditor. You also get a reduced interest rates and your monthly payment is lowered.
But as good as it may sound; it can also make you get into more debts at the long run, if you are not careful. This is because since you have less money leaving your purse each month and more money left for you to use, you might be tempted to spend more and get into more debts.
With debt consolidation, you spend a longer time to pay off all the money involved here and you could ruin your credit score and credit history.
Choosing to consolidate your debt is something you really have to weigh seriously before deciding whether or not to go for it.
http://www.oureconomy.org/wp-content/uploads/cache/53_thumbzoom.jpg
When you consolidate your debt it gives you immediate relieve and takes away the stress involved in paying so many people, because you only have to pay one creditor. You also get a reduced interest rates and your monthly payment is lowered.
But as good as it may sound; it can also make you get into more debts at the long run, if you are not careful. This is because since you have less money leaving your purse each month and more money left for you to use, you might be tempted to spend more and get into more debts.
With debt consolidation, you spend a longer time to pay off all the money involved here and you could ruin your credit score and credit history.
Choosing to consolidate your debt is something you really have to weigh seriously before deciding whether or not to go for it.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
I've never had a consolidated loan or really looked into it seriously, but I found some good information at www.creditsourceonline.com listing the pros and cons of debt consolidation.
One of the pros is that you have just one payment to make instead of payments to several different creditors. Also, many consolidated loans are really home equity loans which carry lower interest rates than those associated with other creditors. The lower interest rates translate into a lower monthly payment. Finally, interest paid on a mortgage can be used as a write off at tax time, but interest on credit cards cannot.
A negative of debt consolidation is it could be easier to get into debt further by using the now balance free credit cards since there will be leftover money each month from paying the lower interest loan. The loan can take longer to pay off and pay more in the long term because monthly payments are lower. Also, if the loan is not paid, the home can be lost since consolidated loans are secured loans, whereas credit cards are not.
http://www.bad-creditproblems.com/DEBT%2020CONSOLIDATION%202.jpg
One of the pros is that you have just one payment to make instead of payments to several different creditors. Also, many consolidated loans are really home equity loans which carry lower interest rates than those associated with other creditors. The lower interest rates translate into a lower monthly payment. Finally, interest paid on a mortgage can be used as a write off at tax time, but interest on credit cards cannot.
A negative of debt consolidation is it could be easier to get into debt further by using the now balance free credit cards since there will be leftover money each month from paying the lower interest loan. The loan can take longer to pay off and pay more in the long term because monthly payments are lower. Also, if the loan is not paid, the home can be lost since consolidated loans are secured loans, whereas credit cards are not.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
We have done debt consolidation and it really helped us. You can check out the credentials of different companies on the Internet. They can help you do away with late charges and lower interest rates. They will tell you when you can expect to have all the credit cards paid off. You do have to pay a monthly fee with most of the services but it is far lower then dealing with the late fees and interest piling up on the credit cards.
We found it to be a big relief. If there is a problem, we just call the company and they talk directly to the credit card companies for us.
You are not supposed to open any new accounts while on the program and your current accounts will not be able to be used even once they are paid down.
We found it to be a big relief. If there is a problem, we just call the company and they talk directly to the credit card companies for us.
You are not supposed to open any new accounts while on the program and your current accounts will not be able to be used even once they are paid down.
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M$
That depends on your personal situation. Debt consolidation into one large account can actual hurt your credit. This is because combining all your accounts removes the variety of account types and also puts multiple closed accounts on your credit, both of which will decrease a credit score. However all of those accounts going negative would also hurt your credit. If you could afford to even make minimums on every thing maybe try to get low interest rate replacements and transfer the bulk of balances to those, you could increase your score. In example so you have...
a mortgage decent interest rate
a car loan high interest rate
4 credit cards 3 high interest, 1 low all maxed
You could take out a small personal loan at a low interest rate from the bank, pay the car loan off. Positive impact on credit, new account type, lower rate.
Then get enough low interest credit cards (that number will vary on how much debt you have and what sort of limits you can get.) Transfer all but a small portion from all the high interest cards on to the new cards and the one low interest card you have, be sure the balance does not exceed 50% on any one card (25% is even more ideal) now you have more positive accounts, a lower over all debt to income ratio, and you've lowered your interest rates the same way a consolidated loan would but you've done so without hurting your credit, in fact you likely increased it dramatically because maxed or over limit credit cards destroy a score.
a mortgage decent interest rate
a car loan high interest rate
4 credit cards 3 high interest, 1 low all maxed
You could take out a small personal loan at a low interest rate from the bank, pay the car loan off. Positive impact on credit, new account type, lower rate.
Then get enough low interest credit cards (that number will vary on how much debt you have and what sort of limits you can get.) Transfer all but a small portion from all the high interest cards on to the new cards and the one low interest card you have, be sure the balance does not exceed 50% on any one card (25% is even more ideal) now you have more positive accounts, a lower over all debt to income ratio, and you've lowered your interest rates the same way a consolidated loan would but you've done so without hurting your credit, in fact you likely increased it dramatically because maxed or over limit credit cards destroy a score.
images:
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
I think debt consolidation can be a positive process, but only if you're dealing with the right company. From what I've seen, the companies that help people the most are the ones that offer face to face meetings and mandatory credit counseling. If they don't genuinely make it their job to help, they could just be in it for the fees generated.
Also be aware that some non profit credit counseling companies are owned by credit card companies. Once you contact one of these agencies and give them your name, you can kiss any chance of getting new credit goodbye. If you're not confident that a restructuring is the answer, you might do better by simply calling your credit card companies yourself and asking for lower interest rates.
Also be aware that some non profit credit counseling companies are owned by credit card companies. Once you contact one of these agencies and give them your name, you can kiss any chance of getting new credit goodbye. If you're not confident that a restructuring is the answer, you might do better by simply calling your credit card companies yourself and asking for lower interest rates.
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M$
