Monday, December 4, 2006

Debt Consolidation Loans: Get Away with the Damaging Consequences of Bad Credit

Just how dangerous bad credit is to your finances? Let us take a look on the following instances and see the extent of damage it could cost to your stable financial status.

Supposedly you want to buy a brand new car to replace your old family sedan. You found out that purchasing the car in an installment basis would be quite expensive compared to cashing it out to the car dealer. However, you do not have enough cash savings to buy out your preferred vehicle. Thus, you decided to secure an auto loan to finance the purchase of your new car.

Unfortunately, your auto loan application is turned down by the lending institution, citing the bad credit rating you have obtained from the previous calendar year.

Suddenly, you remembered that you have not yet finished repaying your mortgage and worse, you have committed defaults on your monthly payments. The report also showed your credit card accounts, which are also unsettled prior to your auto loan application. Other lines of credit are also recorded to your credit report, and most of these showed delinquency in monthly payments. That is when you realized that all of these have done serious damage to your present financial status.

You have several attempts on taking out new auto loan to finance the purchase of your new car, but unfortunately most auto loan providers rejected your loan application. On the other hand, lenders who have reconsidered your loan application gave you a list of options, which, unfortunately, charges you a higher interest rate.

At this point, your brand new car will just be a dream to think about. Forget a brand new Porsche or Beemer and drive your old family sedan once again.

Possessing bad credit does not extend the damage on auto applications alone. Try to take out a second mortgage and your mortgage lender will take the exact course of action done by the auto loan provider. You cannot increase your credit card accounts unless you have settled your financial obligations with your existing creditors. You will also experience difficulties in taking out other types of loans as long as you have that bad credit posted in your annual credit report.

Fortunately, you can still repair your bad credit report through securing a bad credit debt consolidation loan. This type of loan will help you prevent your credit status as well as your present financial condition from further deterioration. It would be the substitute for all of your unsettled financial obligations. The consolidated loan would be used as the repayment for your entire unsettled financial obligation to other creditors. Since consolidated loan is not immediately repayable, you have enough time to prepare for the repayment.

However, expect that you will be charged a slightly higher interest rate if you will get a bad credit debt consolidation loan, considering the fact that you are still a credit risk for the debt consolidator. The good thing here is that the interest payment on a bad credit debt consolidation loan is still lower compared to the individual interest payment of your existing lines of credit. Thus, consolidating all of your existing debts is still the best option for improving your current bad credit status instead of dealing with each debt individually.

Do not let the damaging consequences of bad credit deter your stable financial status. Secure a bad credit debt consolidation loan and free yourself of credit-related worries later on.

Dirk Wagner regularly writes informative reports on information much like debt consolidation. From his works, the author demonstrated his expertise on topics related to bad credit debt consolidation and credit repair.

Article Source: http://EzineArticles.com/?expert=Dirk_Wagner

Wednesday, November 29, 2006

Debt Consolidation Loans ? A Life Saver in the Sea of Debt

Debt problem has become a serious problem in the UK. People are taking out all kinds of loans ? secured loans, unsecured loans, personal loans, car loans, home improvement loans, etc. People are using their credit cards recklessly. Personal loans and credit cards charge a very high rate of interest. More and more people are now filing for bankruptcy. Personal as well as corporate insolvencies are on the rise. If you are also suffering from a severe debt problem, then you must start thinking about debt consolidation.

Debt consolidation is required when you are no longer in a position to repay your loans and credit card dues. The rate of interest is very high and the interest keeps on accumulating. The original loan amount is not such a big problem but the interest burden becomes too much to bear. In this situation, you need to take out a debt consolidation loan. It helps you to avoid bankruptcy.

The biggest benefit of a debt consolidation loans is that it reduces your interest burden. The rate of interest on a debt consolidation loan is lower than the rate on unsecured loans. This allows you to pay small monthly installments. Debt consolidation loans can help you manage your debt more easily as you will have only one creditor to repay the loan to.

Apart from benefits, Debt Consolidation Loans also have some disadvantages. If a debt consolidation loan is secured against your property, the lender may repossess your property if you fail to repay the loan. If you take out a long term debt consolidation loan, you will end up paying a large amount of interest. When you consolidate your debt, you repay your existing loans before the expiry of their loan period. Some lenders charge early repayment penalty.

Debt consolidation loans are secured and unsecured. Secured debt consolidation loans are secured against a property. If you are a homeowner, you can use your house to obtain a debt consolidation loan. You can also get a personal loan, which is usually unsecured, to consolidate your debt. The rate of interest on secured loans is lower than the rate on unsecured loans

Debt consolidation: an opportunity to mend credit status

Debt consolidation is just the merging of all the debts .Debt consolidation can be done through various methods, by taking out debt consolidation loans, debt consolidation mortgage, debt consolidation remortgage or even through debt counseling. Debt consolidation loan offers an opportunity to consolidate all your loans in one manageable loan. Debt consolidation program offers an opportunity to pay off all the bills and multiple loans in one easy installment. It also offers cheaper debt resolution options to the borrower.

Some people think that debt consolidation reduces the amount of the whole debt. But that is not true. The amount of debt never reduces overnight. Only the interest rates are reduced. Debt consolidation loan is provided by various banks and credit unions. Debt consolidation loans are used for variety of purposes. While availing debt consolidation loan, you don't have to specify the purpose of it.

Debt consolidation loan comes in two forms: unsecured and secured debt consolidation loan. Secured debt consolidation loan can be obtained by offering collateral. Amount approved will depend on the equity value of the collateral only. There is no need of offering any collateral in order to get unsecured debt consolidation loan. The rate of interest depends on borrower's credit score and financial position.

Debt consolidation loans can be availed even if you have bad credit history. In fact, it provides an opportunity to mend the credit status of a borrower. If you follow any debt consolidation program, eventually you will get rid of getting calls from many creditors. Debt consolidation will allow you to deal with a single creditor.

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting adverse-credit-debt-consolidation.co.uk as a finance specialist.

Monday, November 27, 2006

True Facts About Debt Consolidation !

Debt Consolidation can really solve debt problems provided that certain variables allow it. Not all debt can be consolidated and some debt, though it can actually be consolidated, is sometimes best to be left alone. Here are some true facts about the debt consolidation process.

Debt Reduction Is Not Always 65% or More

It is true that some people can achieve a debt reduction of up to 65% or even more. However, those who can achieve such results are in terrible debt problems and have been already charged abusive punitive fees and exorbitant interest rates for their debt. The debt negotiators can reduce interest rates, and eliminate debt generated by missed payments and late payments in the form of fees and extra costs. That’s the reason why someone in such situations can get a debt reduction of up to 65%.

In common situations a debt reduction can range between 15% to 40% and sometimes even less. Moreover, is certain situations, debt may even grow. This is due to the fact that sometimes the solution for debtors is not a debt reduction but a reduction of the amount of the monthly payments and this is done by spreading the debt over longer repayment programs thus generating more (but affordable) debt.

Your Credit Score May Suffer

Your credit score won’t be affected if the debt consolidation agency has agreements with creditors and they don’t inform that you’ve entered a debt consolidation program. Otherwise, your credit score will drop considerably. Nevertheless, within a short time and due to the results of debt negotiation your credit score will begin to rise consistently.

If your debt problems are solved by using a debt consolidation loan, your credit score will also drop. However, since your debt exposure will also drop, over the time your credit score will continually increase as long as the loan’s monthly payments are always on time. That being said, debt consolidation almost always reduces your credit score for a short period of time till debt negotiations end and you start repaying your debt.

There Are Many Scams Out There

You need to be especially careful with unscrupulous companies that claim to be debt consolidation agencies and won’t do anything but take your money. If the agency states that they will make payments on your behalf, make sure to claim the receipts for those payments. Remember that missing payments and paying late will affect your credit score. Thus, these scams cannot only cost you money, but they can also destroy your credit score ruining your ability to get finance for many years.
---
Kate Ross is a professional consultant with fifteen years in the financial field. She helps people in the process of securing personal loans, mortgage, refinance or consolidation loans and prevents consumers from falling into financial scams. Smart tips and interesting articles on this subject and other financial related topics can be found at her website: http://www.speedybadcreditloans.com
Article Source: http://EzineArticles.com/?expert=Kate_Ross

How To Use A Debt Consolidation Loan To Dig Yourself Out Of A Financial Hole

If your expenses in life have been adding up, and have put you in debt, it can be a very worrying situation. You have creditors calling you wanting to know when you’ll pay them, you aren’t earning enough to pay off your debt, and you are constantly worried about your financial future.
It can be a very scary situation, which most people make worse by piling lots of debt onto credit cards but only paying off the minimum payments.

But let’s cut to the chase. You know you’re in debt. You don’t want a lecture, you want a way out. So this is what I’m going to help you with.

One of the most popular ways of getting out of debt is to take out a debt consolidation loan. This is basically a loan you can get from many financial institutions, where they roll all your debt into one monthly payment.

There are many benefits to this. Firstly, the interest rates will be lower compared to the interest rates of your credit card. Secondly, it will stop all the creditors from hassling you for their money. And finally, it will make your financial pressures much lighter, as you only have to worry about one payment each month that you should be able to afford.

When you take out a debt consolidation loan, the company you work with can help take a lot of financial strain out of your life. Even if you have multiple debts, ranging from credit cards, car loans, medical bills, education loans, whatever debt you have can be all conveniently put into one monthly payment.

As enticing as this sounds, its important to realise that your debt isn’t gone. It’s just arranged differently. You will be able to afford the payments (and you’ll save some money due to the lower interest rates) but you’ll have to pay off the loan over a longer period of time.

Debt consolidation loans can be a big help to you if you’re in a real financial mess. The only major downside is that it doesn’t change your spending habits for you.

So when you have some space left on your credit card, you may be tempted to start spending again. You may think you won’t, but it can be a very hard habit to break
The easiest way of overcoming this, is to only keep one credit card with you… and use it only for emergencies.

Mark Barclay is the owner of the Debt Consolidation Blog, where you can find lots more useful and free debt consolidation loan advice and help. If you are in debt or you're thinking about debt consolidation, be sure to visit Mark's blog right now.

Article Source: http://EzineArticles.com/?expert=Mark_Barclay

Tuesday, November 21, 2006

How to Find Cheap Debt Consolidation Loan in UK

The ever increasing cost of living may sometimes leads to piles of pending bills on your study table. You may finally end up taking many loans, which will only add to your worries. These are only temporary solutions for your financial crisis and are not going to work in the long run. If you pay interest rates individually, it will cost you really expensive and troublesome as well. However, a simple solution is to pay more than one existing debts through a debt consolidation loan in the UK.

These debt consolidation loans are very popular in the UK. These loans are taken to repay all your pending bills and loans. A debt consolidation loan UK is used to pay off all your earlier debts. It facilitates you to combine various debts and make a single repayment plan. Paying off different loans, as well as, interest rates individually can be a bit problematic and may cost a huge amount. Well using collateral can help in bringing down the rate of interest to a considerable extent. It provides a back up to your borrowing and lessens the risk factor.
According to a debt consolidation loan UK, all your debts are combined and the interest is charged upon that particular amount, which automatically trims down your concerned debt. Thus, the biggest advantage of a debt consolidation loan UK is that, it helps in discounting the debt.

Always remember, with more than one debt you will find yourself trapped in to unmanageable debts. You have to take constructive steps to come out of this trouble. With debt consolidation loan UK, you can repay pending loans such as educational loans, credit card bills, holiday loans, utility bills etc. However, the success of debt consolidation loans UK depends a great deal upon the type of loan you are going to consolidate. For instance, debt consolidation of credit card may prove to be beneficial because of the high rate of interest of credit cards.

A debt consolidation loan UK has innumerable advantages. It helps in trimming down monthly instalments, interest rates. You are free from the worry of dealing with many lenders. It helps to avoid bankruptcy, saves money, consolidation of utility bills and credit cards. The rate of interest depends upon a number of factors like loan amount, type of loan and concerned fees. You have to pay attention to the fact that debt consolidation loan UK trims down the cost of your unsecured debt and repay loan within a short span of time. You can also search online to find debt consolidation loan UK at cheap rates.

Rick Russel has no formal degree in finance, but years of work that he has put in the finance industry makes him perfectly eligible to be called an expert in financial matters. To find Debt consolidation loan, debt consolidation loan UK, bad debt consolidation UK mortgages visit http://www.fixyourdebts.co.uk
Article Source: http://EzineArticles.com/?expert=Rick_Russel

Debt Consolidation Loan: Feasible Approach to Counter Debt Problems

Debt consolidation loan is one of the most practical solutions for maintaining sound financial health. It allows you to take a breather and rebuild your credit rating by making payments at regular intervals. Debt consolidation loan is generally given in the form of home equity or unsecured loans. Its major advantage is that all your payments are consolidated into one monthly payment to a single lender, at a lower interest rate. Borrowing more money to pay your bills will not help you to get rid of your debts but its better than having creditors breathing down your neck. And a low interest rate will surely help you to pay your bills faster.

Debt consolidation loan allows you to track your monthly outgoings. The interest rate of this loan is lower in comparison to other consumer debt interest rates. It also streamlines your monthly budget, as you have a fair idea of how much of your earning is going to go out of your pocket. As the interest rates are lower, the amount you pay per month will decrease gradually. In addition, the interest that you pay on the loan could be used to reduce your taxes.

But one has to be careful about the pitfalls of debt consolidation loan. Surely, this loan helps to make your payments easier, but that shouldn’t make you resume your old spending habits. Let this debt consolidation loan be a reminder of the fact that never to spend beyond your means and become dependant on your credit card.

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his master in Business Administration and is currently assisting Shakespearefinance as a finance specialist.

For more information please visit: http://www.adverse-credit-debt-consolidation.co.uk
Article Source: http://EzineArticles.com/?expert=A._Wilsoon