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 loan 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. A debt consolidation loan 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.
For More Information please visit at Debt Consolidation Loans in uk
Wednesday, January 17, 2007
Tuesday, January 9, 2007
Debt Consolidation or Financial Suicide ?
Using home equity or retirement savings to pay off credit card debt is never a good idea. In fact, it is financial suicide. Unfortunately, more and more lenders are pushing people in that direction. If debt consolidation is such a great way to get out of debt, why are so many Americans still struggling just to make minimum payments? The real question is why are debt consolidation loans such a bad idea? They are a bad idea, because so many Americans are still in debt!
In recent years, many Americans have taken advantage of debt consolidation loans in an honest attempt to repay their credit card debts only to find that they are now deeper in debt and worse off then ever before. In fact, according to the Federal Reserve, by the end of 2004, Americans borrowed a total of nearly $830 billion dollars against the equity in their homes, but just 7 years earlier, Americans borrowed roughly $415 billion. That is a 50% increase in borrowing; not debt reduction, but loans that are pushing Americans further in debt. Debt consolidation loans to not address the real problem….spending. People need to be educated as to why they are getting into debt in the first place. In the long term, education is critical in correcting debt related problems.
Unfortunately, banks always advertise that using a home equity loan or line of credit is the fastest and most effective way of getting rid of high interest rate credit card debt, but nothing could be farther from the truth. Such programs rarely work for people who are suffering from debt. While some of the fundamental ideas behind a debt consolidation loan are sound, people can not borrow their way to financial freedom!
The concept is simple; a home equity or debt consolidation loan promises to provide a lower interest rate than the one currently being paid to creditors. Additionally, debt consolidation loans boast that that the interest you pay will most likely be considered tax deductible. Based on these concepts, debt consolidation would seem like a great idea. Remember the old adage of if it’s too good to be true, than it probably is?
Looking at this logically, based upon statistics, most of the people that choose the debt consolidation route to help eliminate their debts usually end up charging more in the near future; it is a vicious cycle. In the end, when all is said and done, debt consolidation loans typically leave consumers with less equity in their home to use when a real emergencies happens; they cause people to replace unsecured debts with secured ones. What was once unsecured debt, which could most likely be resolved through debt settlement, credit counseling or even bankruptcy, has now been exchanged and secured with the value of something far more important, your home.
If you are suffering from credit card debt and are searching for help, consider debt settlement, credit counseling and, as a last resort, bankruptcy before ever considering a debt consolidation loan as a way to achieve debt relief. In most cases, you will be far better off.
Alan Barnes IAPDA Certified Debt ArbitratorPresident & CEO of Debt Regret,
Inc.http://www.debtregret.com
Article Source: http://EzineArticles.com/?expert=Alan_Barnes
In recent years, many Americans have taken advantage of debt consolidation loans in an honest attempt to repay their credit card debts only to find that they are now deeper in debt and worse off then ever before. In fact, according to the Federal Reserve, by the end of 2004, Americans borrowed a total of nearly $830 billion dollars against the equity in their homes, but just 7 years earlier, Americans borrowed roughly $415 billion. That is a 50% increase in borrowing; not debt reduction, but loans that are pushing Americans further in debt. Debt consolidation loans to not address the real problem….spending. People need to be educated as to why they are getting into debt in the first place. In the long term, education is critical in correcting debt related problems.
Unfortunately, banks always advertise that using a home equity loan or line of credit is the fastest and most effective way of getting rid of high interest rate credit card debt, but nothing could be farther from the truth. Such programs rarely work for people who are suffering from debt. While some of the fundamental ideas behind a debt consolidation loan are sound, people can not borrow their way to financial freedom!
The concept is simple; a home equity or debt consolidation loan promises to provide a lower interest rate than the one currently being paid to creditors. Additionally, debt consolidation loans boast that that the interest you pay will most likely be considered tax deductible. Based on these concepts, debt consolidation would seem like a great idea. Remember the old adage of if it’s too good to be true, than it probably is?
Looking at this logically, based upon statistics, most of the people that choose the debt consolidation route to help eliminate their debts usually end up charging more in the near future; it is a vicious cycle. In the end, when all is said and done, debt consolidation loans typically leave consumers with less equity in their home to use when a real emergencies happens; they cause people to replace unsecured debts with secured ones. What was once unsecured debt, which could most likely be resolved through debt settlement, credit counseling or even bankruptcy, has now been exchanged and secured with the value of something far more important, your home.
If you are suffering from credit card debt and are searching for help, consider debt settlement, credit counseling and, as a last resort, bankruptcy before ever considering a debt consolidation loan as a way to achieve debt relief. In most cases, you will be far better off.
Alan Barnes IAPDA Certified Debt ArbitratorPresident & CEO of Debt Regret,
Inc.http://www.debtregret.com
Article Source: http://EzineArticles.com/?expert=Alan_Barnes
Thursday, January 4, 2007
Debt Consolidation Loan: A Managing Utility
To put in simple words, debt consolidation loans are used to consolidate all the pending debts of a person to result in just one monthly payment. So now, you need not worry about the over exhilarating debts and long pending bills. All you need to do is to apply for debt consolidation loans and let that loan take care of all the existing debts.
Many people have faced the problems of long pending debts at one point of their life. These pending debts ultimately accumulate to pose a threat to the life of a person. It is because with pending bills a person’s peace of mind will be in taken away and he will be submerged in a series of debts. Apart from that these pending bills bring in higher rate of interest with them. With debt consolidation loans, a person can easily handle these bills and ultimately lower the rate of interest and also end up paying only one payment in a month.
Debt consolidation loans come in two categories: secured debt consolidation loans and unsecured debt consolidation loans. If you have collateral to place against the amount you want to take, go for secured debt consolidation loans. And if you are not willing to place any collateral then there are unsecured debt consolidation loans. But the rate of interest in unsecured debt consolidations loans is higher than the secured ones.
If you have collateral with a high equity, then you can easily avail lower rate of interest in your debt consolidation loans. Again a borrower with a good credit history will find debt consolidation loans at lower rate of interests. It does not mean that a person with a bad credit history cannot avail debt consolidation loans; they can but with a little higher rate of interest. The lenders might also place more restrictions on how a person with bad credit history spend the money that he receives but the benefits of keeping your debts under control often outweigh the additional costs that are involved. But they can make timely repayments of this loan and improve their credit score.
Consumers have a wide range of options for finding debt consolidation loans. They can go either to the physical market or apply online. There are numerous lenders that will provide you with debt consolidation loans at a cost effective price. So you need to do an extensive study of the financial market. Otherwise, you can opt for the online procedure which is less time consuming and also cost effective. Be sure to read thoroughly each lender’s offer so that you do not miss anything. Do not allow yourself to be rushed into making a decision; wait until you have gathered al the required information to make a thoughtful decision.
Writing for loans for Elaine Owen is not just about giving advice to people but offering sensible ways to revamp their financial condition in a reconstructive way. To find low interest debt consolidation, debt consolidation loans, debt consolidation tips, credit card debt consolidation loans visit http://www.e-debt-consolidation.co.uk
Article Source: http://EzineArticles.com/?expert=Elaine_Owen
Many people have faced the problems of long pending debts at one point of their life. These pending debts ultimately accumulate to pose a threat to the life of a person. It is because with pending bills a person’s peace of mind will be in taken away and he will be submerged in a series of debts. Apart from that these pending bills bring in higher rate of interest with them. With debt consolidation loans, a person can easily handle these bills and ultimately lower the rate of interest and also end up paying only one payment in a month.
Debt consolidation loans come in two categories: secured debt consolidation loans and unsecured debt consolidation loans. If you have collateral to place against the amount you want to take, go for secured debt consolidation loans. And if you are not willing to place any collateral then there are unsecured debt consolidation loans. But the rate of interest in unsecured debt consolidations loans is higher than the secured ones.
If you have collateral with a high equity, then you can easily avail lower rate of interest in your debt consolidation loans. Again a borrower with a good credit history will find debt consolidation loans at lower rate of interests. It does not mean that a person with a bad credit history cannot avail debt consolidation loans; they can but with a little higher rate of interest. The lenders might also place more restrictions on how a person with bad credit history spend the money that he receives but the benefits of keeping your debts under control often outweigh the additional costs that are involved. But they can make timely repayments of this loan and improve their credit score.
Consumers have a wide range of options for finding debt consolidation loans. They can go either to the physical market or apply online. There are numerous lenders that will provide you with debt consolidation loans at a cost effective price. So you need to do an extensive study of the financial market. Otherwise, you can opt for the online procedure which is less time consuming and also cost effective. Be sure to read thoroughly each lender’s offer so that you do not miss anything. Do not allow yourself to be rushed into making a decision; wait until you have gathered al the required information to make a thoughtful decision.
Writing for loans for Elaine Owen is not just about giving advice to people but offering sensible ways to revamp their financial condition in a reconstructive way. To find low interest debt consolidation, debt consolidation loans, debt consolidation tips, credit card debt consolidation loans visit http://www.e-debt-consolidation.co.uk
Article Source: http://EzineArticles.com/?expert=Elaine_Owen
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