Loans for People with Bad Debt
There was a time when lenders use to see bad credit holders as potentially risky customers to lend money to. But with the increasing number of people having poor credit, lenders started seeing a huge potential of market in there and came up with financing plans especially for adverse credit holders.
A person can get bad credit tag due to defaults in previous debts, arrears, declaration of bankruptcy, CCJ etc. it means that credit rating of that person is below 620 which is not seen as a good one in loan market. But loans for bad debt have totally reversed the situation enabling bad credit holders also to secure cash when they need it.
Use of loaned amount
These loans can be taken in any form – bad credit home loan, bad credit car loan or bad credit personal loan etc. and use of the money depends on the which scheme you have applied for. But you have a certain degree of freedom to use the money wherever you want.
These loans can be secured in secured or unsecured forms. In case of secured ones collateral has to be placed against the money and it will help to negotiate with the lender to certain degree. But with unsecured bad debt loans there is no need of any security.
These loans can be applied for either long term or short term scheme. In case of the first one, money can be repaid within 10 to 25 years and rate of interest rate will be less. But with short term repayment term will be 3 to 5 years and interest rate will be high. Being, regular in repayment will help you to improve your credit score.
Any amount in the range of $10000 to $25000 can be secured. Interest rate will vary from lender to lender. These loans are available in banks, private loan lending agencies or from online lenders also.
How Balance Transfer Credit Cards Work
Credit card debt is a fact of life for millions of Americans. Once you have credit card debt racked up, it can be difficult to get rid of. Balance transfer credit cards provide a solution to this problem. By understanding how they work, you can use balance transfer credit cards to help you get out of debt.
Balance transfer credit cards allow you to transfer the amount due on other credit cards to their card. Many offer a low interest rate or a 0% APR introductory rate on the transferred amount. This way, you can avoid paying hundreds of dollars on interest. By making payments each month, you reduce the balance and save on interest expense.
Understand the Fees
Balance transfer credit cards come in many shapes and sizes. Some charge a fee to transfer balances; others do not. Some offer low interest rates for a certain period of time; others allow a fixed low interest rate on the balance until it is paid off. Certain balance transfer credit cards come with a rewards program or additional perks. While balance transfer credit cards offer a great rate on the initial transfer, some include a high interest rate on new purchases. The payments you make will first be applied toward finance charges, then the transferred amount, and finally the new purchases. Your best bet is to find a balance transfer credit card that offers 0% APR on new purchases for the length of the promotional period. You may be surprised at how may credit card issuers are offering 0% APR on both the balance transfers as well as on new purchases for up to 12 months.
Study your Finances
Before you apply for a balance transfer credit card, be sure that you understand your financial situation. Look through your credit cards and the interest rates on them. If you are carrying balances with high interest rates, you may be spending hundreds of dollars each month on interest. It could take years to pay off the initial amounts placed on the cards. By transferring the balances to a credit card with a low interest rate, you can pay off the amounts faster. Also, balance transfer credit cards allow you to debt consolidation. Keep in mind that some balance transfer credit cards only offer a low interest rate for a certain period of time. Many cards have a high interest rate or variable interest rate that kicks in after six months or a year. If you haven’t paid off the balance by then, the higher interest will continue to increase your debt and work against you. If at all possible, you will want to pay off the credit card debt that you transfer within the grace period.
After you have done your research and understand your finances, you are ready to apply online for a balance transfer credit card. Pick one that suits your needs. Then set up a system to pay off the balance. Balance transfer credit cards can provide the first step toward getting out of credit card debt. By placing all of your credit card debt in one place, you can make just one easy payment each month. You also will be able to enjoy paying 0% interest for a period of time on your balances. With a little planning, you will soon be on the road to zero credit card debt and good money management.
Money Saving Tips
People are generally unaware that you can consolidate your debt online and only consider working with counseling agencies that are either far away or offer rates that are not very competitive.
If you wish to consolidate your debt, you can do it from home! Many financial websites can guide your to companies that specialize in debt consolidation and can also give you guidance about managing your money, making a budget and learning to save.
Once you have chosen a debt consolidator online, your counselor will do an assessment of your personal financial situation and instruct you on the best course of action to take.
Once you have decided on which solution is best for your situation they will help you set up your online debt consolidation plan. In order to do this you will need to have your unsecured debt information handy so that you have all of your account numbers and most recent balances easily accessible.
You will also need to have your household income and expenditures together so that you can set up your own personal household budget.
Once your budget is set, you will know how much of your pay can go towards paying down your debt with your debt consolidation. Then your debt consolidation counselor will contact each of your creditors and negotiate with them about how much you can afford to pay them each month. Often they can also help reduce your interest rates, late payment fees and over limit fees.
After all this is done you will be able to make one payment each month to the debt consolidation company and they will in turn pay each of your creditors.
This way your creditors can be assured of receiving payments each month from you and you can have the peace of mind of knowing that all your bills are paid each month.
So, how do you find an online debt consolidation company? Using any popular search engine you can search for ‘personal credit counselors’, ‘debt management services’, ‘financial education services’ and ‘debt consolidation services’.
It’s best to get a handle on your finances as soon as you realize there is a problem. The worst thing you can do is stick your head in the sand and hope it goes away, because it won’t. It will only get worse until you take the initiative and do something about it.