Some Tips on Reducing Debts

Tips on Reducing DebtsThese days, many of us go in for loans on a regular basis. Often seeing the number of loan opportunities and credit facilities, we tend to take them up without a thought. Hence, one could be landed with far more debts than one can handle.

We all avail of loans at some time or another. But not being able to pay places you in a bad situation. If you happen to miss payments because some other important expense simply has to be paid, you will be defaulting on your loan payment. Repeat this a number of times and your credit scores will take a beating. This makes it difficult for you to qualify for bigger loans like mortgages and so on. Lenders would not be able to trust you financially.

If you are currently reeling under an enormous burden of debt, try to get counseling from the experts. There are people and institutions specializing in credit counseling or debt advice. Here is a look at some debt advice tips:

Handling Credit Cards - There really is no need to have too many cards. If you have got too many of them, call a credit card issuer and check out their current interest rates. Ask if they offer a low rate. Then, apply for a new credit card to consolidate all your debts. Doing this means you make payments to only one lender. If you concentrate on doing this right, you will be free of this debt too.

Taking up a home equity loan - Taking a home equity loan will provide you with the finance you require to pay off debts. Once you pay off your debt, you only have to pay off the home equity monthly payment, plus the interest. Check that these are not too high. Most often people who seek home equity loans are also making mortgage repayments. One must ensure that the burden of two loans won’t be too high. So look into this as well.

Reorganize your finance - Make a list of all your sources of income. Then monitor where and how your money is going out. This gives you a clear picture of where money is being spent unnecessarily. If you make sure to reorganize your finances and do some planning, you could save quite a bit of cash. Follow the plan strictly and pretty soon you will money channels directed towards debts rather than spending and soon you will become debt free.

Contact a settlement company - If you were to avail of the services of a debt settlement company, your creditor would be paid off and you would have to just pay back the settlement company. I have spoken to people who have approached debt settlement companies. They claim that debt settlement helped them become debt-free in no time at all.

Other means - You can get into refinancing and pay of high interest debts and then pay of the debt you owe to the refinance company at a lower rate of interest. This low interest rate will free up some money to help you get back on your feet. Another option is to take a loan on your retirement funds to pay your current debts. In such a case, you will not have to reveal your credit score at all.

Debt Consolidation Advice

Debt Consolidation AdviceIf you ever need the right answer to a question, you just need to ask someone who knows. Earlier this week I got some top notch advice from the experts on debt consolidation.

That advice was unexpected and came very early in the day as I got out of bed and headed for the front door to retrieve the morning mail. Along with a few obvious bills I got one of ‘those’ envelopes though the letterbox, bright yellow, red letters, you know the type, just lying on the floor waiting for me. On this envelope were instructions to “Open Now ”. So of course I did and you can imagine my surprise when I find it is yet another invite for me to take out a loan.

This ad writer was really going for it. In the envelope there was about half a dozen slips of paper explaining about what bonuses you could get and tempting pictures of varying piles of money. I also came across a nice “did you know” fact sheet with a few useful gems, such as the average debt in the US is around $8,577 and that almost half of the US adult population are affected my money worries. You just cannot argue with that. It is all good factual stuff, aimed at you and designed to empathies with your own personal situation.

Turning my attention to the main body of a very long sales letter it then asked you to “imagine waking up knowing your finances are sorted once and for all”.

I doubt there is any deliberate intend to mislead the reader with this statement but within it lays the problem with debt consolidation loans, your problems are not sorted once and for all, they are just extended over a longer period of time. They will get even worse if you take on the loan with the lower monthly payments but continue to spend what you have left.

Something I will always find disturbing is to discover at the bottom of that well written sales page what looks like a cheque with instructions to fill it out with the amount you want to borrow, tear it off along the dotted line and then pop it in the free post. If you are struggling with debt, this is like giving someone who is trying to quit smoking a packet of cigarettes, the match to light it and telling them to have as many as they like.

If you have debt problems you certainly do not need an imaginary cheque being waved under your nose.

However the best advice about borrowing to get out of debt is made very clear by the loan company themselves. Right at the very bottom of the letter is another factual note...“If you are thinking of consolidating existing borrowing you will be extending the terms of the debt and increasing the total amount you repay”. To the credit of the firm that sent this material they have made that part very clear and correct.

If the firm that is going to lend you all this money tells you it is not really such a good idea. Then that is top notch advice from an expert on debt consolidation, someone who really knows.