Debt Consolidation

Everything you need to know about Debt Consolidation [2019]

In today’s world, we have seen that with near so many people are complaining about their credit card bills which they aren’t able to pay for longer. Then they are looking for the right solution, which is beneficial for them, and the debt consolidation is only the solution. It is the solution of the debt which is used by those people who want to get relief from their debt. Nevertheless, not all debtors are getting the advantage of this debt solution.

Some of the people are facing a worse situation after consolidating their debt. You will enjoy its benefits if you are using it in the right way. If you are considering this as your debt solution, then you should learn how it will give you benefit from your debt?

Mainly it is the process which includes all the debts and paying it with the loan of the consolidation. On the other hand, it involves transferring your multiple debts into the new loan, which may help you in getting relief from your current situation.

In this post, we consider all the important facts about debt consolidation. First of all, we are going to tell you how to get benefit from it, which helps us in improving the debt settlement ratings.

Set the right mindset

People who are failed to get the benefit from the debt consolidation; they think that they are getting the consolidation loan in just a single try. It is not possible. When you accept the loan, then you get the relief from your old debts, but remind that your debt is not completely erased because you have to pay the amount of the loan every month until you pay it off.

That’s why you should make your mindset when you are going to consolidate your debts into the loan. Make sure that when you are clearing your loan, then don’t add some new debts because it will make your condition worse.

Use it to clear the debts faster

You can use the debt consolidation in two ways, either you clear your debts faster or lower the monthly payment. If you want to get benefit from it, and then give priority to clear your debts, otherwise current debt has a burden for you. When you are finalizing your decision about the consolidation loan, then you must select the longer repayment period, or you can be able to select the repayment term which has monthly payment equal to the current amount which has the shorter period of settlement.

If you select the second option, then it will help you in saving the good amount of interest when you are clearing your debt faster.

Select the debt consolidation carefully

Must be aware when you are going to select the debt consolidation program, as we know that, not all the debt consolidation program will be right for you. Some of them are advertising in a very attractive way to get people to sign up with their plan, but they also charge some hidden costs which make your situation worsen.

That’s why you need to compare some plans and understand the details of the loan before putting the signature into the dotted line of the agreement.

Look for the good consolidation which saves money

Always remember that a good consolidation loan should have a lower rate of interest as compared to the average interest rate on existing debts. If it is the opposite, then move on to the next option. You have to know that the loan involves some fees as like enrollment fees, monthly fees, and some other fees which take into consideration while selecting the debt consolidation program which suits your needs.

Considerable things while selecting the debt consolidation company

Reputation

We all know that if we are selecting a reputable company, then it doesn’t give you a guarantee about the success, but it expresses the good values of the company. People will also complain if they are not satisfied with their service. When selecting the company, they must look at what people talk about that company? A good and reputable company doesn’t release information about their client.

But there is no problem if you are asking them if they allow then you contact their previous clients about the company’s services.

Lawful company

It is the fact that no one wants to get help from that company who take money from us and making our financial situation worse. For this reason, you take the responsibility of ensuring that the debt consolidation company is right before signing up with their services.

Take your time and do research properly for the companies on the internet and offline and pleased to those companies about the information. Don’t need to worry that you will have to pay something about the information. Normally, you have to submit the request form, and then the company will send you complete information about their services to you.

Avoid excuse loans

It is an extended period of the loan with a very low monthly payment which covers the interest fees. Sometimes, we attract the plan because we think that the monthly amount is very low. At the end of the loan period, we have to pay the full loan amount with interest at once. Due to this reason loophole loans are also considered as balloon loan, which amount is large suddenly at the end of the loan period.

Debt consolidation which suits the financial situation

We are looking for the debt consolidation company because we need to resolve the financial problem then take help from the professionals. A good company gives you a debt counselor who understands your financial situation completely before giving you the solution.

Don’t deal with that company who offers you plan without knowing about your situation. You should ask the question as much as you can; it helps you in clearing the doubts and knows collect more information.

Debt consolidation is the most common solution for thousands of people. If you also want to consolidate your debt and resolve debt issue then always select the reputable and professional company which gives the ensured of success.

Bankruptcy & Debt Goals

Know About Bankruptcy And Design A SAM Plan To Avoid It And Reach Your Debt Goals

Managing finance and debt is not easy and you will need to know a lot of things and ensure a lot of diligence to reach your financial and debt goals. Irrespective of what your debt goals are, you must have a proper plan and the best time to begin with it is RIGHT NOW.

Bankruptcy & Debt Goals

The best plan to go ahead with your finance and debt management endeavor is a SAM plan that includes:

  • S: The size of your loan
  • A: Analyzing your financial circumstances and
  • M: Making the plan according to the above two findings.

If you follow the SAM action plan you will not only know about your current finance and debt situation but it will also help you to save for later by following a few purposeful steps to identify and make the necessary changes to secure your financial future.

This strategic plan will help you to get the relevant answers to some of the most important questions in finance and debt management such as:

  • What does the current debt situation look like?
  • How is your current financial condition?
  • Do you have and follow a good plan for using credit?
  • What is your credit score?
  • Is there anything in it that needs to be rectified?
  • What you can do to reach your debt goals?

These answers will help you to set up intentional and achievable goals such as lowering your Debt-to-Income ratio or improving your credit score.

Need to avoid Bankruptcy

At all cost, you should take all possible steps and make all possible efforts to avoid bankruptcy. There are several reasons for it such as:

  • It is better and more satisfying to wipe away your multiple debts with a debt consolidation loan if possible rather than filing for bankruptcy
  • Your credit report will also take a hit if you file for bankruptcy for seven to ten years depending on the type of bankruptcy you file for and
  • Even if you get past it, it will warrant for a lot of efforts, strict discipline and proper budget and plan to follow for several years down the road.

Therefore, you can see why most people look for debt relief from National Debt Relief rather than visiting a bankruptcy lawyer. It is required to think twice before you take this route. Here are a few specific things that you should know about bankruptcy.

Types of bankruptcy that you can file for as an individual are:

  • Chapter 7 bankruptcy – In this form, there will be a trustee appointed by the court that will essentially sell most of your valuable assets and belongings to pay your debts off
  • Chapter 13 bankruptcy – In this form of bankruptcy you can retain your property and follow a repayment plan that is approved by the court to pay off your existing debts.

Apart from these two most commonly known forms of bankruptcies, there are also other options of bankruptcies available but it will depend on your eligibility to qualify for those. You can visit the website of or physically to the US courts to gain substantial information regarding bankruptcy.

Good and bad sides of bankruptcies

Just like any coin, bankruptcy to has its good and bad sides as well. If you file for bankruptcy the fact that you will not have to pay or repay the loan in your terms may sound good but there are a few things that bankruptcy will not address or erase a few specific kinds of debts. Among these debts feature:

  • Most of your tax debts
  • Any student loans besides a few rare exceptions
  • Any new debt you incur after filing for the bankruptcy
  • Your payments for child support and alimony
  • Any penalties or fines you need to pay to any government agencies and
  • Any debts to others that are a result of a personal injury caused by you from intoxication.

Apart from that, bankruptcies do not address any debt forgiveness that may extend to others such as your parent or spouse who has co-signed on your loan application. That means, even if you get a direct relief from your debt, the co-signer will be still responsible.

There are also a few long-term impacts of bankruptcy.

  • As mentioned earlier, it will stay in your credit history for seven to ten years and affect your ability to get credit dramatically.
  • When you file for bankruptcy, your credit report will be marked as “charged off.”
  • The fact that you filed for bankruptcy will indicate that you are not very good or keen in your finance which is a negative point considered by the insurers, landlords, employers, and any other entity who pulls your credit record for valid and permissible reasons.
  • Lastly, if you manage to get any credit after you file for bankruptcy, you will be charged a higher rate of interest by the creditors, asked for greater down payments and even be asked to put up collateral security for it.

Therefore, instead of struggling to rebuild your credit history after bankruptcy, it is wise to take care of it beforehand so that your credit is repaired as and when required and automatically make you eligible for a loan for consolidation or for other purposes.

The SAM plan

If you follow these guidelines you will be able to size up your situation:

  • Maintain a high credit score of 700 or more
  • Know the time taken to repay debts through monthly payments
  • Know the total amount to pay for your credit obligations
  • Also Know the loan costs such as fees and interest and
  • Maintain a DTR of less than 20%.

In order to analyze your circumstances look if you:

  • Spend more than 20% of your monthly take-home income on consumer debt
  • Miss payments or pay late
  • Overdraw your checking account more than thrice a year
  • Borrow to pay off other debts
  • Make only minimum payments
  • Borrow from retirement accounts
  • Use credit cards to pay bills
  • Receive collection calls and
  • Have to take an extra job to pay your bills.

Lastly, when you plan to make sure you consider the cost of the loan, read the fine print, and pay as much and as early as you can.

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