Many people worldwide seem to keep having the exact same question when it comes to debt counseling. They keep asking because they are in debt. Wondering what question they ask? They ask the same question time and again, does debt counseling really help? But sincerely, that's not the right question they should be asking. Instead, the question they should be asking is, what can debt counseling hurt?
Whether we want to face it or not, the fact remains - no person likes being in debt and many people dream of being debt free. Nothing feels better than the feeling of being debt free. If you don't understand what I am talking about, wait until you finally get completely debt-free, then it will hit home - you will be able to enjoy true freedom. But right now you are in debt, so let's talk about getting you some counseling.
You see, getting counseling for your debt helps because, instead of filing for bankruptcy and significantly ruining your chances of getting credit in the future, or getting a consolidation loan that only adds to the existing debt one has, debt counseling is certainly a very workable as well as valid way to help you get out of debt.
Debt counseling helps you as a debtor to get your financial issues under control by helping you talk to your creditors and work out a reasonable repayment plan with them. But it doesn't even end there. After getting your bills under control, the harassing phone calls cease and you, the debtor, gain a peace of mind that you did not have while your mounting debt loomed over your live. Meanwhile, debt counseling goes a step beyond what bankruptcy or loans can do: rather than solely helping the individual get out of debt, a debt counselor will train an individual on how to get out of debt and remain debt free forever.
If a person is in debt and they feel like their financial stability is beyond their grasp; if the mounting debt is far too much to handle; if a person sees no way out of their financial situation except for bankruptcy or a consolidation loan, it’s time to seriously consider debt counseling. Individuals with such problems of debt have nothing to lose when they enter into debt counseling except all of the issues associated with debt.
Try it today and you will be pleasantry surprised at how effective it can be. Yes, you can get debt free faster than you ever thought possible - with the peace of mind that can help you get back on your feet and reclaim your life. I know, I have been there and done that, so I know how important debt counseling can be to you or anyone in serious debt like I was in in the past. Imagine life without debt - it can happen if you take the first step to consider debt counseling today.
Article Source:ezinesarticle.com
How do I know if I need help with my debt?
If you currently have more than one credit card and all you can do is make minimum payments on those bills, you should consider consolidating your debt. Other telltale signs: taking regular cash advances from one card to pay another; putting off expenses because you don't have the cash to pay them; and constant worry about debt. In almost all cases, credit-counseling agencies can work with creditors to set up a payment-reduction plan.
What are the benefits of consolidating debt through a bank loan?
Stability, for one. Even though the interest rate on a bank loan might be higher than promotional APRs from a credit card company, receiving a fixed-rate bank loan for debt consolidation means that, provided you make payments on time, you'll be paying the same interest rate for the life of the loan. Remember that replacing short-term high rate debt with long-term lower rate debt may result in you paying the same amount in finance charges on the debt over the life of the longer loan. Borrowing from your bank also strengthens your relationship; if you need another loan and you have a good track record, the bank will be more willing to help.
How should I handle debt after I consolidate?
Unfortunately, many borrowers interpret a payment-reduction plan as a license to take on more non-mortgage debt; a few years after consolidating, these people look to consolidate again. One way to approach debt after consolidation is to use the money saved through payment-reduction to accelerate pay-down on outstanding loans. This will eliminate debt faster and may also work to raise sagging credit scores.
Source: mortgage.com
What are the benefits of consolidating debt through a bank loan?
Stability, for one. Even though the interest rate on a bank loan might be higher than promotional APRs from a credit card company, receiving a fixed-rate bank loan for debt consolidation means that, provided you make payments on time, you'll be paying the same interest rate for the life of the loan. Remember that replacing short-term high rate debt with long-term lower rate debt may result in you paying the same amount in finance charges on the debt over the life of the longer loan. Borrowing from your bank also strengthens your relationship; if you need another loan and you have a good track record, the bank will be more willing to help.
How should I handle debt after I consolidate?
Unfortunately, many borrowers interpret a payment-reduction plan as a license to take on more non-mortgage debt; a few years after consolidating, these people look to consolidate again. One way to approach debt after consolidation is to use the money saved through payment-reduction to accelerate pay-down on outstanding loans. This will eliminate debt faster and may also work to raise sagging credit scores.
Source: mortgage.com
Refinance Relief for Some Homeowners
There is an estimated 4-5 million homeowners that could benefit from refinancing their mortgage due to historically low interest rates, however, they are unable to because they owe more than 80 percent of what their home is currently worth.
There is good news today for those homeowners - "Making Home Affordable" was announced by the Obama administration.
The goal of the plan is to help responsible homeowners who put money down when they purchased their home but due to falling home prices are now unable to refinance.
In addition to rewarding responsible behavior, there is a concern that if these homeowners are not helped and home prices continue to fall, many may feel less inclined to continue making their payments on time, if at all. Some of these homeowners are also unable to refinance from an adjustable rate mortgage to a fixed rate mortgage right now which may spell trouble once it begins to adjust. This would undermine any efforts of the administration in stemming the wave of foreclosures we've seen.
The details and guidelines related to this program and still not entirely clear - most of the emphasis has been placed on the loan modification portion of the plan. As of right now, all that is known is a homeowner's mortgages must've been financed by Fannie Mae or Freddie Mac and they'll have until June of 2010 to refinance.
Questions about how the loans will be underwritten or borrowers approved have not yet been answered. Some mortgage brokers also question if many homeowners will be able to refinance given the fees and pricing adjustments both Fannie Mae and Freddie Mac have implemented. There are also concerns over how borrowers with second mortgages will be handled.Administration officials said homeowners should be patient as lenders put a process in place to implement the program and more information is released.
Author: Chris Rocks
There is good news today for those homeowners - "Making Home Affordable" was announced by the Obama administration.
The goal of the plan is to help responsible homeowners who put money down when they purchased their home but due to falling home prices are now unable to refinance.
In addition to rewarding responsible behavior, there is a concern that if these homeowners are not helped and home prices continue to fall, many may feel less inclined to continue making their payments on time, if at all. Some of these homeowners are also unable to refinance from an adjustable rate mortgage to a fixed rate mortgage right now which may spell trouble once it begins to adjust. This would undermine any efforts of the administration in stemming the wave of foreclosures we've seen.
The details and guidelines related to this program and still not entirely clear - most of the emphasis has been placed on the loan modification portion of the plan. As of right now, all that is known is a homeowner's mortgages must've been financed by Fannie Mae or Freddie Mac and they'll have until June of 2010 to refinance.
Questions about how the loans will be underwritten or borrowers approved have not yet been answered. Some mortgage brokers also question if many homeowners will be able to refinance given the fees and pricing adjustments both Fannie Mae and Freddie Mac have implemented. There are also concerns over how borrowers with second mortgages will be handled.Administration officials said homeowners should be patient as lenders put a process in place to implement the program and more information is released.
Author: Chris Rocks
Debt Relief By Debt Consolidation
By: Jakob Jelling from Cashbazar
If you are up to your neck in debt, there may seem like there is no relief in sight. In fact this is not necessarily the truth. There are ways to take all of your stifling bills and roll them up into one neat package by using debt consolidation in two very popular forms Home Equity Loans, Refinancing Loans, and a Consolidation Credit Card. All of these instruments provide the debtor with one thing “relief” from the current debt by shrinking it down to a single manageable debt.
Using home equity to consolidate debts :
One of the popular methods of debt consolidation today is the Home Equity Loan. What happens is that the debt is extinguished using the equity from a homeowner’s home. A loan is created outside of the mortgage in order to satisfy the debts. Should the homeowner default on the loan, their house is in jeopardy of being foreclosed upon if that loan is not satisfied with a specified amount of time.
Refinancing loans:
People often consume the debt by rolling it into a new mortgage. This way the house costs more money to the borrower, but the debt is extinguished at close and the debt is neatly rolled away into the mortgage securely. Upon settlement of the loan, the debts are paid in full and satisfied. The clock on the mortgage is reset to day one.
Credit card consolidation:
A low interest credit card is offered to the borrower to include any outstanding credit and loan balances. The interest rate is a low fixed rate for a period of up to one year, upon the year’s end it will resume at its normal rate. Upon acceptance and terms the account should be closed once paid in full and payments be made directly to the new credit card provider. Some people have been able to master paying off one credit card with another to keep the debt revolving and interest rates low. Some people fail to close out the previous creditors account and run them back up again as well.
All three of these options provide solid relief for the debt and help them reconstruct and manage their debt better.
If you are up to your neck in debt, there may seem like there is no relief in sight. In fact this is not necessarily the truth. There are ways to take all of your stifling bills and roll them up into one neat package by using debt consolidation in two very popular forms Home Equity Loans, Refinancing Loans, and a Consolidation Credit Card. All of these instruments provide the debtor with one thing “relief” from the current debt by shrinking it down to a single manageable debt.
Using home equity to consolidate debts :
One of the popular methods of debt consolidation today is the Home Equity Loan. What happens is that the debt is extinguished using the equity from a homeowner’s home. A loan is created outside of the mortgage in order to satisfy the debts. Should the homeowner default on the loan, their house is in jeopardy of being foreclosed upon if that loan is not satisfied with a specified amount of time.
Refinancing loans:
People often consume the debt by rolling it into a new mortgage. This way the house costs more money to the borrower, but the debt is extinguished at close and the debt is neatly rolled away into the mortgage securely. Upon settlement of the loan, the debts are paid in full and satisfied. The clock on the mortgage is reset to day one.
Credit card consolidation:
A low interest credit card is offered to the borrower to include any outstanding credit and loan balances. The interest rate is a low fixed rate for a period of up to one year, upon the year’s end it will resume at its normal rate. Upon acceptance and terms the account should be closed once paid in full and payments be made directly to the new credit card provider. Some people have been able to master paying off one credit card with another to keep the debt revolving and interest rates low. Some people fail to close out the previous creditors account and run them back up again as well.
All three of these options provide solid relief for the debt and help them reconstruct and manage their debt better.
Runaway Debts - How Debt Consolidation Works
From ezine articles by Chimizirim Odimba
Has the sudden economic downturn left you saddled with unmanageable debts? Is your current income insufficient to keep your debt under control? Are you scared that you may have to declare bankruptcy? Do you want to avoid it?
Why not consolidate your debt first? Understanding how debt consolidation works will help you understand that you can still rein in your runaway debts. Refinancing of many debts into a single manageable debt is the basic idea underlying debt consolidation. The multiple high interest loans owed by the borrower are consolidated into a single low interest loan.
You may owe money on credit cards, auto loans and home mortgages. All these loans are combined into a single loan. The interest differential helps individuals repay their debts without additional stress to their finances. Further, keeping track of details of a single loan is a lot easier than keeping track of multiple loans at once. If you opt for debt consolidation, the specialists enter and begin negotiations with your creditors.
Negotiations focus on reduction or waiver of interest, charges and other penalties. Companies work to convince lenders to settle for repayment of principal amount. These companies convince lenders to accept a lower amount as settlement of the debt owed by the borrower. They lend the money required to settle all debts of the individual. The single debt you now owe must be repaid in full. The company charges moderate interest on the debt. Once your debts are consolidated, you can plan your finances from scratch all over again.
The difference in interest rates ensures that your monthly outflow towards repayments comes down after debt consolidation. If you are planning to consolidate your debt, prefer professional debt consolidation companies over all others. Lenders prefer dealing with professional consolidation companies over individual borrowers. You do not know the complications involved and may end up settling for the second best deal.
Want to pick a reputed company for debt consolidation? It is not as difficult as you think. Log on to the Web (or visit links on this page) and obtain multiple quotes from various companies. Online quotes help you compare the facilities and benefits offered. Take your decision after proper analysis. If you opt for debt consolidation, you acknowledge that you are unable to manage your debts.
This reflects on your credit score and negatively impacts your credit rating. If you are regular in repaying your sole debt, it will reflect favorably on your credit rating.
Now that you have found the answer to 'how does debt consolidation work?', make use of this wonderful solution to bring runaway debt under control.
Has the sudden economic downturn left you saddled with unmanageable debts? Is your current income insufficient to keep your debt under control? Are you scared that you may have to declare bankruptcy? Do you want to avoid it?
Why not consolidate your debt first? Understanding how debt consolidation works will help you understand that you can still rein in your runaway debts. Refinancing of many debts into a single manageable debt is the basic idea underlying debt consolidation. The multiple high interest loans owed by the borrower are consolidated into a single low interest loan.
You may owe money on credit cards, auto loans and home mortgages. All these loans are combined into a single loan. The interest differential helps individuals repay their debts without additional stress to their finances. Further, keeping track of details of a single loan is a lot easier than keeping track of multiple loans at once. If you opt for debt consolidation, the specialists enter and begin negotiations with your creditors.
Negotiations focus on reduction or waiver of interest, charges and other penalties. Companies work to convince lenders to settle for repayment of principal amount. These companies convince lenders to accept a lower amount as settlement of the debt owed by the borrower. They lend the money required to settle all debts of the individual. The single debt you now owe must be repaid in full. The company charges moderate interest on the debt. Once your debts are consolidated, you can plan your finances from scratch all over again.
The difference in interest rates ensures that your monthly outflow towards repayments comes down after debt consolidation. If you are planning to consolidate your debt, prefer professional debt consolidation companies over all others. Lenders prefer dealing with professional consolidation companies over individual borrowers. You do not know the complications involved and may end up settling for the second best deal.
Want to pick a reputed company for debt consolidation? It is not as difficult as you think. Log on to the Web (or visit links on this page) and obtain multiple quotes from various companies. Online quotes help you compare the facilities and benefits offered. Take your decision after proper analysis. If you opt for debt consolidation, you acknowledge that you are unable to manage your debts.
This reflects on your credit score and negatively impacts your credit rating. If you are regular in repaying your sole debt, it will reflect favorably on your credit rating.
Now that you have found the answer to 'how does debt consolidation work?', make use of this wonderful solution to bring runaway debt under control.
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