jiwasok's Blog

It's difficult not to notice the incredible growth that there has been in companies offering debt consolidation programs and solutions over the past few years. Debt consolidation companies are amongst some of the biggest advertisers on the internet and there are now more loan consolidation TV commercials than there ever has been before. However, quite a few of these debt consolidation companies are currently being sued by a number of attorney generals, the IRS, and the FTC over their claims of being 'nonprofit' organizations.

A debt consolidation company, that will remain unnamed, has actually had a federal lawsuit filed against it and the FTC and five individual states have filed similar lawsuits against the same company. This unnamed company declared Chapter 11 bankruptcy but in actual fact are still operating under different company names.

You may find it interesting to know that many companies in this field no longer call themselves 'debt consolidation companies' because of the negative press that this legal action against the unnamed company has generated. It is more likely they use names such as 'debt negotiation' companies or 'debt settlement' companies now to describe what they do. Irrespective by what name they go by, these companies are likely still using illegal tactics and methods, and should be avoided at all costs.

You should check out all debt consolidation companies you are considering having dealings with, in fact it would be prudent to check out each company you deal with for that matter, with your local independent consumer protection office and the Better Business Bureau in the company's location or on the internet.

Knowing how to read into the information you gather is important as a good rating awarded to a debt consolidation company may carry very little weight and be totally misleading as over 75% of all complaints received by the Better Business Bureau do not, and will not, count against a company's rating if the complaint is deemed to have been resolved.

The Better Business Bureau, although a useful source of information, has no power to investigate complaints made against debt consolidation companies and nor does it have the authority to resolve them neither.

Utilizing the internet is an ideal way to broaden your search for a reputable company to use as there are a number of review sites you can visit that have consumer feedback, just cross off those companies that people have complained about.

One final piece of advice is to avoid any consolidation companies or organizations that have their address registered in the states of Maryland or Florida because companies registered in these two states are non-regulated. Avoiding those companies registered in Maryland and Florida is quite easy due to the large number of companies supplying this type of service that are registered elsewhere.

Debt consolidation is very much in vogue nowadays, and for good reason. This popularity has been heightened by the present market conditions. Many consumers are weighed down with a variety of debts. Making necessary to cover the debts is often very difficult, resulting in a vicious cycle.

Paying for debts is something that is bound to eat into your pocket notably. It is therefore quite a reprieve if you can find a way through which you can make some saving. Debt consolidation will help you to do this as you complete the payment of your debts faster.

With debt consolidation, you will be able to move all your various debts into a single account, where you will make the necessary payment. When you combine all your various debts into one place, you will have the advantage of being charged a relatively lower interest rate. In addition, you will cover all your debts by making just one monthly payment. You won't have to keep tab of different debts that have to payment at different times of the month. You will thus improve on your credit rating.

Many people take debt consolidation loans by using their home equity. This is whereby you use your home a collateral to secure your loan.

In order to get the most suitable loan, you should ensure that a number of factors work in your favor. For instance, you need to have a good credit rating. A stable employment will also be advantageous. Such factors will help you to secure a debt consolidation loan that has a significantly lower interest rate.

The use of credit cards has never been as popular as it has been over the past 5 years. Unfortunately, this has resulted in the largest US credit card debt figures that have ever been seen.

The issue of personal credit card debt has forced many into looking for ways to lower monthly payments or eliminate this debt altogether.

There are certain methods that can be used to do this: Credit card debt consolidation is the most popular and there are a number of different ways to achieve this consolidation of credit card debt.

1. Balance Transfers Using Your Existing Credit Cards

Check out and list every credit card balance and interest rate. Contact the card with the lowest APR and ask if they offer balance transfers as part of their service and if they do you should ask the following things:

• What the limit is on balance transfers?
• Whether or not you are limited as to the number of cards you wish to transfer from
• The fee for transferring your balance
• Whether they offer a reduced interest rate for balance transfers

Once you have collated this information it is time to sit down and do the math to ensure you will actually save money by transferring your cards. If you do, then start the process of transferring your balances.

You will probably find that you could save in the region of 5-10% APR by doing this simple exercise.

2. Balance Transfers Using Introductory Credit Card Offers

The same steps apply as to transferring between cards you already have accounts with but this time you will seek out a credit card that is offering a low or even a 0% Apr offer on balance transfers.

The same questions need to be asked as before but with four important additions:

• How long does the introductory rate apply for?
• What rate will the credit card revert to upon completion of the introductory offer?
• Does this offer apply to purchases?
• What are the annual fees if any?

Again, do the math and if you do not make a considerable saving it would be surprising.

3. Credit Card Debt Consolidation Loans

A popular no nonsense method of eliminating your credit card debt is to take out a low interest loan, very often a home equity loan. This loan is then used to pay off your credit cards completely leaving you with a drastically reduced single monthly bill.

4. Debt Management Services.

If acquiring a loan is out of the question because of a poor credit rating or lack of collateral then a debt management company may well be your best choice. These companies work for you, negotiating reduced repayments with all your creditors not just your credit card providers. You will be asked to provide all your financial information so they can do this correctly.

After they have drawn up a financial plan outlining what you can comfortably afford to pay each creditor they will start the negotiation process. They often get vastly reduced payments often as low as 50%.

However, they will charge a fee for this service and an ongoing administrative charge for controlling the distribution of your monthly payment. Its well worth shopping around as there can be a vast difference in charges and fees and nonprofit organizations tend to offer the best value for money.

However, there are many companies out there that are scamming people left, right and center so it is always wise to check out any company you are considering using.

5. Negotiate Better Terms Yourself!

This should really have been the first option but has been purposely left till last so as to be the last thing you remember reading!

Too many people feel that they have no option but to dance to the fiddlers' tune, the fiddler being their credit card company, how wrong they are.

Credit card companies will always say they are willing to help you should you get into financial difficulties, but the reality is that they want you to remain in debt for as long as possible.

Compile your list of debt as with the balance transfer method and request a reduction or a freeze on interest payments you will probably be confronted with an initial 'no' but be persistent and you will find that a reduction will be applied.

 Five Insider Tips to Getting the Best Rate For Student Loan Consolidation

If you are searching for a job and you are a recent college graduate, you may ponder how to find the best interest rate for a student loan consolidation. If your payments have not been made for at least 270 days, your student loans will show in default. This article will guide you through how to secure the best interest rate for consolidation of your student loans.

Why Consolidate?

If the intention of a consolidation is to pay a loan off before it is due, then you will want to obtain a principal reduction. However, if you want 20 or more years to completely pay off the loan, you will want to ask for an interest rate reduction.

Tip 1: How to get the Largest Rate Reduction

Nonprofit lenders are a good starting point to get the best principal reduction or rate reduction possible. Operation costs are lower for nonprofits. In turn, they are able to offer better savings to you. An excellent resource for the lowest consolidation rates is Student Lending Works.

Tip 2: The Fine Print Review

One thing you need to be especially careful about, is ensuring that all your loan changes are fixed and permanent. Variable interest rates can increase at any time and without notice. Lenders can assign fees without notification. Review any new terms carefully.

Tip 3: Additional Discounts

Automatic payment plans paid from your checking account or will often secure you for a discounted rate. Make sure that you thoroughly research these possible discounts before you talk to the lender.

Tip 4: Consumer Beware

Occasionally lenders may boast about a discount or other perk as something additional, when these may be things that you would already receive in the first place. For example, a lender may state they can give you a discount if you consolidate during a certain time frame, presenting this perk as though this isn't something you would normally receive. Surprisingly, this is possibly something that the lender may legally have to give you.

There are certain things which you are entitled to: zero fees, fixed interest rates, no penalties on repayment, no credit checks, and interest rates that are 0.6 percent if you consolidate your loan during your available grace period.

If a lender offers you any of those things as something extra, you should probably seek your loan elsewhere. These lenders are probably not the most honest to do business with. These companies simply use these tactics to mask the fact that they don't have the ability to give any unique benefits.

Tip 5: Discounts for Timely Payments

Making your payments on-time can allow you to get discounts. A single late payment, even once prior to principal payoff, can forfeit your discount. Some larger loans could take up to 30 years to pay off, so this may be an improbable goal for you. These lenders should be avoided. Make sure that any extras you get will stay the same throughout the life of the loan.

Do you know how much of your hard-earned money goes toward credit card debt interest each month? With most credit card companies charging anywhere from 21 to 30 percent in interest you may be surprised by how much you are actually wasting in credit card interest.

The interest payment on a credit card with a $2,000 balance and a 29 percent APR is almost $50 per month. And that's only for $2,000 worth of debt. The average American carries nearly $10,000 in unsecured debt and can only make their minimum payments each month. Over time, the amount of money paid in interest could be in the thousands.

The basic solution to avoiding all of these unnecessary interest charges is to pay off your unsecured debt. Of course, this is easier said than done. Most are finding it difficult to stay afloat financially and just do not have the extra money to dedicate to paying off their unsecured debt.

If this sounds like you, there is a solution that can pay off those debts and save you a ton of money in interest charges.

Debt Consolidation Basics:

Debt consolidation works by combining all of your high-interest debt into one payment with a smaller interest rate. Your credit cards will be paid off and you can pay off your consolidated debts gradually.

Using consolidation helps save you money in two ways. First, it dramatically lowers the interest that you are paying on your debt balances. A lower interest rate of just 10 points less than what you are currently paying could save you $1,000 per year if you have $10,000 worth of unsecured debt. Next, a consolidating saves you money each month by lowering your payments. Instead of paying hundreds of dollars to several different creditors, you can make just one lower payment.