Credit Solutions

25 Indications You Need Debt Relief

Fri, 12 Oct 2007 16:38:16 CDT

American consumers have nearly $2.5 trillion of outstanding debt, according to the Federal Reserve's Consumer Credit report. Unfortunately, the probability you account for a portion of that debt is high. The following 25 warning signs of excessive debt are useful for determining if you need assistance with your debt.

You have been denied new credit
You always make the minimum payments on your credit card debt
You've used a credit card to pay off other credit cards
You charge more in expenses than your monthly credit card payment
You don't know how much total debt you have
You have never checked your credit report nor do you know how to check it
You receive demanding letters and telephone calls from your creditors
You have stopped putting money into a savings account
You hide your spending from your spouse and family
You bounce checks frequently
Your bills are higher than you expect each month
You have reached your credit limit on one or more credit cards
You depend on credit cards to purchase items like gas, groceries, and clothing
You routinely get cash advances or use payday loans
You live paycheck-to-paycheck
25 percent of your monthly income goes toward credit card bills
You have three or more credit cards
You ask friends and family for money to cover credit card debt
You lease because you cannot find financing to buy
You've taken a second job just to repay credit card debt
You pawn personal items because you desperately need cash
You have made three late payments in the last 12 months
You have seriously considered bankruptcy
You increase credit limits on already maxed-out credit cards
You depend on the time before a check clears to obtain the necessary funds

If you are experiencing any of these financial problems, then you need to seek debt relief. There are several methods of debt help available to you including debt settlement, credit counseling and debt consolidation. Debt settlement can wipe out your credit card debt in 12 to 36 months and act as a buffer between you and your creditors. Don't let debt linger in your life, act now before these indicators result in bankruptcy.

Author Bio: Scott Sumerford has several years of experience working in the financial industry and has written a myriad of articles on various financial matters. Read more about how Credit Solutions offers a viable alternative to debt consolidation.

7 Tips to Prepare Your Home for Winter

Fri, 12 Oct 2007 16:30:07 CDT

Winter is just around the corner and so are those high energy costs to heat your home. The average family spends $1,400 a year on energy and nearly half that is spent on heating and cooling. This year, you can make your home more efficient with these simple tips:

Make sure windows and doors shut snuggly. Your heating unit will run longer, costing you more money, if there are cracks around your doors and windows.
Make sure if you replace old heating equipment you don’t go too big, you’ll end up paying much more in energy costs to run a unnecessarily large heating unit.
Check to see if your air ducts have any holes or leaks; especially check the duct leading outside. You also want to make sure no vents are obstructed.
Check with your local utility provider and see if there are any rebates or specials on heating equipment.
If your heating unit is more than 10 years old, you should have a professional examine the unit to see if it needs to be replaced. An ineffective heating unit will add extra costs to your energy bill.
Set your thermostat to a lower setting, 70 is typically comfortable and affordable. You also want to make sure that when you leave for an extended period of time you lower the temperature only a few degrees. A drastic drop in temperature will require more energy to reheat your home if the temperature falls too low.
Make sure your walls are properly insulated. Additionally, you can insulate wall outlets to completely insulate your home from the elements. Try asking a professional at Home Depot or Lowes to see what might work best in your home.

Saving money on your energy bills can make the holiday season more bearable. Expensive Christmas gifts can prompt credit card debt if you're already stretched financially. Every penny saved can make a tough season a little easier.

Two Debt Consolidation Programs

Fri, 12 Oct 2007 16:15:43 CDT

Debt can be one of the most stressful burdens in your life. If you need debt relief, then you need to understand your options. Debt consolidation, which establishes new terms on an existing debt, approaches debt relief in two ways.

Rescheduling

Debt consolidation can reschedule your current debt by extending the current due date and conditions. For instance, you may be able to extend a $10,000 debt another 5 years to lower the monthly payment and reduce the interest rate. However, rescheduling your debt and extending the repayment period, even with a lower interest rate, can cost you thousands in interest charges because you will pay more interest with every payment you make. Therefore, the longer you're in debt, the more interest you will pay over the life of the loan.

Refinancing

When you refinance your current debt, you replace the old debt with a new debt. A common form of this debt consolidation is a home equity loan. You can refinance your home to repay multiple credit card debts; thus, consolidating your debt. The dangers of a home equity loan are risking foreclosure if you fail to make payments and paying more interest. Home equity loans offer lower interest rates because the loan is secured by an asset, your home. However, if you extend the debt, like rescheduling, you will pay more interest over the life of the loan than if you repaid the debt in a shorter time span.

You can also refinance by obtaining an unsecured debt consolidation loan. These loans have higher interest rates because there is not collateral to secure repayment of the debt. The benefit of this loan is one payment per month instead of the myriad of credit card bills. You can also work the structure of the new loan to shorten the repayment period, which can save you interest charges. The drawback, though, is you need to have good credit to obtain a favorable interest rate or you will negate any possible savings a debt consolidation loan may offer.

Another Debt-Relief Option

Overwhelming debt doesn't have to linger in your life. Debt consolidation provides a debt-relief plan that decreases your interest and, possibly, saves you some money. Yet, another form of debt relief, debt settlement, offers a plan to reduce your total credit card debt in 12-36 months. Regardless of the debt relief program you choose, debt is a burden you don't have to bear alone.

4 Reasons To Try Debt Consolidation

Fri, 12 Oct 2007 16:10:47 CDT

Debt is a problem plaguing millions of people in America today. If you are distressed by debt, the sooner you act to fix your debt situation, the easier it will be to recover.

Here are four of the top reasons to try debt consolidation:

All you have to lose is your debt. This is one gamble that pays off. Literally. Debt consolidation is one of the most popular methods of debt relief. You simply obtain a debt consolidation loan, with that loan you pay off all of your creditors.

Simplify your monthly payments. Once you have obtained your loan and paid off your creditors with it, you make one monthly payment on the loan. Writing one check per month is much easier than keeping track of multiple credit card statements and bills.

Creditors will stop calling. If you’re behind on your bills or have several missed payments, you are probably receiving harassing phone calls from creditors. These phone calls have a way of disrupting your home life; they also put a strain on your patience. When you obtain your loan, you pay off creditors, and they stop calling you.

You can start saving more. With credit card bills out of the way, and payments simplified, you can start thinking about your future. The money you save every month on your credit card bills can be applied to a retirement plan, college fund or vacation package.

Author Bio: Allison Roberts is a graduate of the University of North Texas Department of Journalism. She has experience in agency and in freelance public relations. Allison currently writes for Credit Solutions and she is completing an unfinished work of her late grandfather. For more articles by Allison on bankruptcy Credit Solutions.

Two Methods of Debt Relief

Fri, 12 Oct 2007 15:52:45 CDT

Debt has become a problem when you fear answering the telephone or opening your mail because it might be another demand from your creditors. Late payments turn into missed payments and missed payments turn into bad credit. But what can you do when you have poor credit and need serious debt relief? Debt consolidation and debt settlement provide relief in different ways.

Debt Consolidation

You've probably seen a thousand debt consolidation TV and radio commercials. Yet, you probably still wonder how debt consolidation will work for you and what the process involves.

One type of debt consolidation involves a debt consolidation loan. You have several types of loans to choose from. For example, if you're a homeowner, then you can take out a home equity loan, normally a second mortgage. A home equity loan allows you to pay off credit cards and possibly receive some extra cash. There is danger, though, in adding unsecured credit card debt onto your home mortgage. Losing your home is much worse than having bad credit.

A debt consolidation service works differently than a debt consolidation loan. Some companies offer to help you formulate a plan to repay creditors at a reduced interest rate. In turn, you pay the company a fee and lowered monthly payments. The company distributes the funds to your creditors and may provide money saving strategies. The benefit is a lower interest rate, but the fees you pay may negate potential savings.

Debt Settlement

Debt settlement works by working credit card with your creditors to settle your total debt. This program, unlike debt consolidation, seeks to reduce the overall balance of your debts instead of simply lowering the interest rates you're currently paying. Depending on the creditor's willingness to settle, you might only pay significantly less than the total amount owed.

Another benefit of debt settlement is that the company acts as a buffer between you and your creditors. Debt collectors retain the legal right to continue to contact you, but they usually honor requests, by mail or telephone, to speak to the debt settlement company representing you. You can also change your contact information and allow trained professionals handle collectors' harassing calls.

Debt consolidation and debt settlement are distinctly different approaches to debt relief. Each has its benefits and drawbacks. Regardless of the method you choose, if you suffer from overwhelming debt, then you need to act now for debt relief.

Relax With Debt Consolidation

Fri, 12 Oct 2007 15:03:49 CDT

Stress is one of the leading factors of medical concern for Americans. It can cause discord with your family, and in the worst cases, extreme stress can lead to medical problems such as heart attacks.

Debt is a leading factor of stress for many Americans. Debt has a way of consuming your life. It is an inescapable issue that many try, futilely, to simply ignore. You may even screen all of your phone calls to avoid creditors, leave mail unopened, and to still continue to accept new credit card offers and charge your way further into debt.

This is called denial. More simply, it means you ignore the problem hoping that it will go away on its own. Unfortunately, denying a problem’s existence does not make it disappear.

The prospect of dealing with such a monumental task is a daunting thought. The first step in any recovery program is always the hardest. But, if you can follow these simple guidelines, you can deal with your debt and begin to live a relaxed life:

Take inventory of your debts. Write them down so that you know exactly what you are dealing with.
Assess your financial situation. Do you have the means to pay off all of your debts? If so, then do it. If not, continue reading this list.
Research debt relief programs. Options such as debt consolidation can bring you relief from your debt.

If you finished reading the entire list, then you need help with your debt. Do not feel ashamed. Millions of other Americans are dealing with the same issue. The most important thing is recognizing how deeply you stand in debt.

Debt consolidation allows you to combine all of your debts into one easy payment each month. Often times, the monthly payment is much lower than the combined amounts you pay on your credit cards each month.

The only way to eliminate the stress of debt in your life is to face it and formulate a plan of action to tackle it. Relaxation naturally results from getting over the hurdle of denial.

Long-term Costs of Debt Consolidation

Fri, 12 Oct 2007 13:24:09 CDT

Debt consolidation does have some short-term benefits. It allows the consumer to simplify their debt repayment schedule by placing all their high-interest debt into a low-interest loan, which makes repaying debts much more convenient.

Additionally, debt consolidation has the immediate benefit of saving the consumer a fair amount of money. The reason for this is simple: credit card debt is usually very high interest, in some cases as much as 30 percent, but loans used for debt consolidation are relatively low interest. Home mortgages, which are often used for debt consolidation, often have interest rates as low as 4 percent or 5 percent.

So, in the short term, debt consolidation can save you money and make your financial life a little bit easier. Unfortunately this process will have some lasting effects on your finances that are not as attractive. Over the long term, the process of uniting your debts under a single loan may do more harm than good.

Take a look at the following long term consequences:

Debt consolidation doesn't do anything to change bad spending habits. If anything it reinforces reckless spending by making more credit available to the consumer.
Consolidating debt doesn't actually reduce the amount you owe; it just moves your debt from one place to another. Debt consolidation loans still take years, sometimes decades, to pay off.
Using secured debt to pay off high-interest credit cards puts your investments at risk. If you default on your consolidated loan you will still owe your credit card companies but you'll have lost your asset.

It should be obvious that, over the long term, debt consolidation is not worth the trouble it costs. Consumers are better off going with a program like debt settlement to reduce their credit card debt.

Author Bio: Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. Read additional articles by Drew on Debt Management and more.

Debt Consolidation for Retirement Success

Fri, 12 Oct 2007 13:19:04 CDT

Retirement is supposed to be the golden, restful period of life. During retirement the last thing you should have to worry about it money. Shuffleboard, bridge, bingo and bowling – those are the preferred preoccupations of the retired soul.

Just kidding.

I know there is much more to life in retirement. It is a time of honest reflection and continued learning about oneself. It is the time in life when people are free to travel as much as they want, dote on their children and grandchildren as much as they want, and not have to worry about money while they are doing so.

Unfortunately, many retirees are still worrying about finances as they age. Fewer companies are offering employees pensions to support them in retirement, and savings nationwide are at an all-time low.

Added to this is the epidemic of credit card debt. As workers' salaries increase with age, so do their spending. Consumers who used to live comfortably on the high salaries earned by managers and upper-level executives are now finding it difficult to make ends meet because of high credit card and loan payments.

One way to combat this trend is debt consolidation. This process allows consumers to minimize their interest payments by combining their high-interest debt into a low-interest loan. Whatever money is saved on interest payments can then be put toward investments that will yield a return for the future retiree.

So, minimizing debts through debt consolidation not only makes one's financial life easier during middle age, but also creates a healthy foundation upon which a retired worker can build his or her future.

Author Bio: Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. Read additional articles by Drew on Debt Management.

The Latte Effect

Thu, 11 Oct 2007 16:34:01 CDT

Financial experts have touted the latte effect phenomenon since Starbucks hit mainstream America in the 90s. The root of the concept is that consumers spend seemingly small amounts of money daily that add up to large sums of money over the course of the year. The idea behind the effect is to see how much we spend on unnecessary items every day, and more importantly, how that money could be put to use in a more productive way.

The point behind the concept is a look at our money and spending habits over the long term. For example, if you spend $3.50 every morning on a cup of coffee (or latte, cappuccino, mocha, whichever you prefer), you will spend almost $1,000 in one year.

Keep in mind that $3.50 is a median price. Some drinks at Starbucks and other coffee houses can cost more than $5 per cup if you add syrups, extra espresso or substitute soy milk.

If that $1,000 were invested into an IRA or other retirement fund, in 30 years you could see a substantial amount of money, upwards of $16,000. (Of course this will vary greatly depending on the retirement plan.)

The concept is not limited to coffee alone. It could be applied to cigarettes, candy, or any other items you buy on a daily basis. The theme is money management, and how easy it is to spend a large sum of money, or worse charge it, without even realizing it is happening.

The consequences for charging small items such as these can be very detrimental to your finances if you are not paying off your credit card each month. It is easy to charge your way into hundreds, if not thousands, of dollars worth of debt because the price seems so small. But, over the course of a year, unpaid balances on credit cards hurt your credit score.

If the latte effect has helped you charge your way into unmanageable debt, consider a debt relief program such as debt consolidation or debt settlement.

Debt Consolidation for Millionaires

Thu, 11 Oct 2007 15:28:40 CDT

Being a millionaire isn't as glamorous as it used to be. Twenty years ago, if you had a couple million in the bank, then you could feasibly live the rest of your life in high style.

But times have changed. According to an article by Carrie Coghill Kuntz on Forbes.com, millionaires with a net worth of between $2 million and $10 million are having a harder time keeping ensconced in their mansions and Mercedes.

Kuntz writes, "Just a generation ago, a person with $2 million or more in liquid assts would have had enough for a secure retirement. But not today. Combine longer life expectancies and the rising costs of health care, food, transportation and property, and you have financial challenges ahead for the Millionaire."

Now, I know this sounds ridiculous to most readers. Millionaires don't really deserve pity for being unable to maintain their daily caviar-for-breakfast habit. But millionaires, like all humans, are creatures of habit. Like all habits, giving up a lavish lifestyle can be very difficult for these wealthy individuals.

Whether you're a millionaire or an average middle-class Joe, your focus should be on saving money and increasing your wealth. Obviously, the ways millionaires go about doing this will differ from the ways median income earners go about it, but the principal is the same for both groups: spend less money and save where you can.

To that end, debt consolidation is a valuable method for both groups. Debt consolidation is the process of moving high-interest debt into a low-interest loan. For the millionaire, this might mean paying off their high-interest car loan with a low-interest second mortgage. The middle-class Joe, however, would use a low interest personal loan to pay off credit card debt.

Credit card debt is the bane of the lower and middle class. Upper-class consumers don't use as much credit, don't abuse it and usually don’t need debt consolidation to take care of their debt problems.

Average consumers, however, are much more likely to need a debt-relief service, such as debt consolidation, to take care of their financial woes. These types of services allow the middle-class debtor to minimize interest payments and work toward debt freedom. The more they save, the more they can put toward building their own wealth.

Author Bio: Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. Read additional articles by Drew on Debt Management.

Shady Debt Consolidation Companies

Thu, 11 Oct 2007 15:20:44 CDT

A recent articleon Bankrate.com by Lucy Lazarony outlined some of the shady practices used by some debt consolidation companies. There has been a great increase in the number of these companies in operation of late, and many of them adhere to the same nefarious business model: promise clients to help with their credit card debt, charge exorbitant fees and fail to help clients reduce debt. In the end, debtors are left much worse off than before they started.

Some of the practices used by shady debt consolidation companies include:

Promising to lower debt and deal with your creditors, for a fee. But when clients send the company their fee, the company keeps it and doesn't pay the creditors.
Damaging the debtor's credit score without explaining this may be a consequence of the debt consolidation plan.

Often, debtors will come to a debt-relief firm with a fairly good credit history. These folks just need help reducing their debt. They may owe a lot, but they aren't necessarily on the verge of bankruptcy.

The debt consolidation company, promising a quick and easy fix to their debt, actually leaves debtors in a much worse position. Basically, these companies prey on the hopes and fears of honest citizens who may have made a few bad financial decisions.

Lazarony notes that complaints against these types of scams are growing: "In 2000, complaints against credit counseling and management agencies totaled 404, and complaints against debt-consolidation companies reached 653, according to the Council of Better Business Bureaus."

But things have gotten much, much worse since 2000. Complaints against credit-relief firms and debt-reduction companies have skyrocketed as the debt management industry becomes saturated with dubious businesses.

As a consumer in need of debt relief, you have one major tool in your arsenal: research. Search tirelessly online for information about debt-relief companies. Don't engage the services of a debt consolidation firm until you're certain they are reputable and have your best interest at heart.

Author Bio: Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. Read additional articles by Drew on Debt Management, Credit Management and more.

Debt Relief Must Align With Your Needs

Thu, 11 Oct 2007 14:51:34 CDT

Your credit problems are unique to you and unlike any others. Therefore, a proper course of debt relief must be a right fit for your financial situation. The best debt-relief program keeps you in charge of your path to being debt free.

Legitimate financial emergencies include as a job loss or hospitalization. On the opposite spectrum, overuse of credit cards on material items puts unnecessary weight on the budget.

No matter the sources of your credit problems, when collection calls come constantly and past-due bills crowd your mailbox, then it's time for debt help. But what does this kind of help entail? Well, it kind of depends of your money situation. As a homeowner, you could opt for a home equity line of credit to help consolidate bills. This type of debt consolidation loan offers a lot of money at a low interest rate. Your home is collateral. But if you don't repay this loan, then you could lose your house.

People could choose a straight unsecured debt consolidation loan. Since there is no collateral put down, this loan has a higher interest rate than one involving home equity. This is a popular option for people who don't own their own homes or who don't have enough equity in their homes. While this form of debt relief allows one monthly payment, just remember, you are just moving debts from place to place. It takes a long time, often up to 30 years, to eliminate debt through an unsecured consolidation loan.

Another method is with debt settlement where a credit expert works to reduce your total credit card debt balance, possibly saving you thousands of dollars.

Author bio: Brian Williams, a graduate of the University of Texas at Arlington, has 11 years’ experience writing and editing at daily newspapers in Texas. Learn more about credit debt from Brian through Credit Solutions. Credit Solutions is your alternative to debt consolidation.

Credit Card Help For Young Families

Thu, 11 Oct 2007 12:41:59 CDT

Substantial debt can cripple a young family's budget. Many couples start life together with student loans and staggering credit card debt. Add a mortgage and car loans to the equation and a young family is near financial disaster.

Starting a family is a huge decision that carries emotional and financial responsibilities. Raising children takes a good amount of your money. Here's a sample of some of the things what parents' pay for:

Child care
Health and dental insurance (braces aren't cheap)
Dance lessons
Soccer and baseball practice
College savings

Poor credit stymies many families. With bad credit, you may not get that house in a nice neighborhood. You may be denied a job based on shaky credit, limiting your future earning capacity. Plus, paying off debt for years siphons money away from family needs.

Many families seek debt consolidation to address their credit woes. Debt consolidation lumps all debts into monthly payments and, while this is a streamlined approach to handling debt, repayment of that debt still takes several years.

Many families are not deterred by decades of paying off debts through a debt consolidation loan. Indeed, many young families can't take advantage of a low-interest home equity loan because they haven't yet invested enough money into their home.

There are several debt relief options to eliminate debt quicker. A good option is reducing debt. Paying a reduced debt balance leaves you with more financial options for your family. In addition, outside credit counseling can help guide your family to financial stability.

Author bio:

Brian Williams, a graduate of the University of Texas at Arlington, has 11 years’ experience writing and editing at daily newspapers in Texas. Learn more about debt relief from Brian through Credit Solutions. Credit Solutions is your alternative to debt consolidation.

Don’t Miss Your Debt Vaccine

Thu, 11 Oct 2007 10:06:59 CDT

Summer is officially over, and fall is gradually making its entrance. Students are back at school and, ever so slightly, the leaves on the trees are beginning to change. If there are certainties about the emergence of fall, they are these: midterms, flu season and college students racking up debt.

Just as you would study for a midterm to ensure you pass, and just as you would get a flu shot to keep from being out sick for a week; you must also seek preventative measures in regard to your debt.

If you are still in school, this means starting good habits now.

Do not sign up for credit cards you do not need
Pay cash for items such as food, clothing and social events
Budget – Know how much money you make and how much you can afford to spend after you pay your bills
Keep track of your student loans.

All of the suggestions above can keep you from ending up in serious debt. In a way, you can think of them as a vaccine for debt or studying to pass an exam. One of the most important suggestions is to keep track of your student loans. This is money you will have to repay later. Additionally, you should know if you have federal or private loans because this will come into play later if you wish to consolidate your student loans. Read more about student loan debt consolidation.

Credit card debt is the most tempting of all debt. The “buy now, pay later” mentality is appealing to undergrads. Perhaps this is because they assume they’ll have a good job after graduation that will enable them to “pay later.” However, without a budget in place, they may not have taken into consideration exactly how much they will be paying on student loans each month. The chances are most entry-level salaries will be stretched thin trying to cover a load of credit card debt in addition to student loan debt, a new apartment, and everything else that comes with starting a life after college.

If you missed your debt vaccine, and you have found yourself in overwhelming debt, consider debt consolidation as a means of debt relief. You can combine all of your debts into one monthly payment. Paying bills becomes easier, the creditors stop calling, and you can rest easy knowing that you are on your way to a debt-free life.

Author Bio: Allison Roberts is a graduate of the University of North Texas Department of Journalism. She has experience in agency and in freelance public relations. Allison currently writes for Credit Solutions and she is completing an unfinished work of her late grandfather. For more articles by Allison on bankruptcy, visit Credit Solutions.

Let's Make A Deal

Thu, 11 Oct 2007 09:57:40 CDT

You may think that’s just the name of a game show from the 1960s, but it has a practical application to most Americans. A large number of Americans are suffering from debt and searching for relief. Debt settlement is on the rise as a popular form of debt relief and an alternative to more traditional practices such as bankruptcy and debt consolidation.

Debt settlement is the process of working with a creditor to lower the balance on your debt. So, in essence, you are playing Let’s Make A Deal with your creditors. Some debt management websites encourage you to play this game by yourself with your creditors; however, teaming up with a debt settlement company gives you extra leverage to get the biggest debt reduction possible.

More traditional means of debt relief such as debt consolidation and bankruptcy are not as effective as debt settlement. Debt consolidation is merely moving all of your debt into one place, and then paying it off over as many as 30 years. Depending on the interest rate on your debt consolidation loan, you could end up paying much more in the long run. Bankruptcy has similar problems. New bankruptcy laws made it more difficult to file Chapter 7, which wipes your debt slate clean. This means the majority of individuals filing bankruptcy will have to file Chapter 13, which means they will have to pay back all of their debts in their entirety.

Debt settlement is different from traditional means of debt relief; it is more effective and faster. Skilled consultants work with your creditors to lower the amount of debt you owe to them. Sometimes they can save you thousands on your debt. If you let a debt consultant make a deal with your creditors, you can be debt free in 12 to 36 months.

Debt Consolidation with Life Insurance is a Bad Idea

Thu, 11 Oct 2007 09:44:25 CDT

Debt consolidation means obtaining one large loan to pay off your different high-interest credit card balances. You can consolidate your debt several different ways, one of which is through your whole life insurance policy.

Debt consolidation has become very common among the millions of people who struggle every day just to pay their minimum balances. For some, it is the only way to stop living paycheck to paycheck, and to regain control of their finances.

The major benefit of debt consolidation is convenience. With a debt consolidation loan, you simply pay back your debt with one payment every month, instead of balancing all your different balances. It is key to find a new loan with a much lower interest rate to consolidate your debts.

If you have whole life insurance, you can borrow against its value for debt consolidation. This is a compelling method of debt consolidation for those without any major tangible assets (like a house) to use as collateral.

The unique thing about borrowing against the value of your whole life insurance policy for a debt consolidation loan is that there’s no time limit to pay it back. In fact, you don’t really have to pay it back at all. If you don’t pay it back, the amount of the loan is deducted from the amount paid to your beneficiaries.

Taking money from your beneficiaries to use for debt consolidation is a risky proposition. If you fail to pay back the loan, then your spouse/children will be out of luck financially. Be sure to discuss with your family the consequences of taking out the loan. Is it really worth the temporary relief you'll get to rob your family of their future finances?

Author Bio:Drew Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. Read additional articles by Drew on Debt Management.

Don't Consolidation Debt, Snowball It

Thu, 11 Oct 2007 09:34:27 CDT

Debt consolidation is the process of moving several unsecured credit card loans under another unsecured or secured loan. Consolidating debt is usually done to achieve a lower interest rate and to consolidate monthly payments for greater convenience.

Debt consolidation is usually the last refuge of consumers harried by monthly calls from collection agencies. Consumers rely on credit counseling firms who promise that, through credit card debt consolidation, the consumer will face a rosy, debt-free future. This is often a lie, as credit counseling is only the first step in total debt relief.

Consumers must be wary of debt-relief companies which offer debt settlement or debt consolidation. Often these agencies will fail to mention that their services carry heavy monthly fees. Further, these nefarious companies will claim that, after using their services, debtors will once again have the pleasure of pristine credit. This is simply not true. Those consumers who hire the services of a credit counseling firm will often be left with a much lower credit rating than if they simply pay off their debt.

What is the alternative? Instead of debt settlement or credit card debt consolidation, consumers should consider a process called snowballing. This involves paying the minimum balances on those cards with the largest balances, while using all their extra income to pay off those with the lowest balances. Once they have paid off their lower balance cards, consumers move on up to the one with the next lowest balance.

While it may look appealing on paper, debt consolidation will often leave the consumer worse off. Careless consumers risk running up high balances again on their credit cards once they have moved their debt under the new loan.

In light of all this, the savvy consumer should seriously consider snowballing their debt instead of choosing credit card debt consolidation.

Debt Consolidation Does Not Encourage Saving Money

Wed, 10 Oct 2007 14:56:52 CDT

Many people in debt don't think about the long-term consequences of their choice of debt relief. You have no incentive to save money if you choose debt consolidation to handle your credit problems

You just want the debt to go away. Debt consolidation often seems like a magic panacea to eliminate stifling debt. But your debt really doesn't disappear through consolidation. Sure, your debts are much easier to manage with monthly payments under one loan. But a debt consolidation loan means you have just replaced one debt with another.

Being trapped in a cycle of consumer debt is not a good financial practice. Savings, a key component of financial security, is often missing from most debt consolidation practices. Some debt-relief practices mandate saving money as part of their programs – debt settlement is one of them. Basically, you have to put away a certain amount of money to pay your debts. A debt settlement expert can reduce credit card debt balance, knowing you have enough money saved.

Saving money is a way to wean yourself from consumer credit. When those large emergencies crop up – such as car repairs or last-minute travel – your savings can provide a necessary buffer. Credit cards can be used in emergencies, but their interest charges make them hard to pay off. Credit card debt is a primary reason people seek debt consolidation and other forms of debt relief. People who can't get credit cards turn to payday loans and car title loans for temporary financial help. Those types of credit contain even higher interest rates than credit cards.

Your debts will not go away without discipline and hard work. By compiling a savings account as part of your debt relief, you take ownership of clearing your debts.

Author bio:

Debt Consolidation Eliminates Debt with One Loan

Wed, 10 Oct 2007 14:06:07 CDT

Debt consolidation is a program that allows you to eliminate multiple credit debts with one loan. When you face overwhelming debt and decide to pursue debt consolidation, you must select a loan to obtain and pay off your creditors. Several different types of loans are available and selecting one is the most important decision you'll make in the debt-relief process.

A debt consolidation loan for credit debt will enable you to manage your budget without hassle. Once you obtain the loan and pay off debts, you make one payment each month to the consolidation loan lender, instead of paying numerous creditors and bill collectors. With only one lender, you can control your personal finance situation and begin living debt free.

Searching for a debt consolidation loan presents borrowers with several options. Here are two of the most common types of loans consumers use for debt consolidation:

Personal Loans
Specialized Debt Consolidation Loans

Personal Loans Consolidate Debt

When you elect to obtain a personal loan for debt consolidation, the first step is to find an honest lender, such as your bank or credit union. By using a reputable lender, you reduce the risk of incurring more debt, ensuring a clear path toward debt freedom. Personal loans allow you to consolidate credit card debt, medical bills and overdue utility bills.

Specialized Debt Consolidation Loans

Many banks and financial lenders offer loans designed specifically to pay off multiple debts. These loans carry low interest rates and affordable monthly payments, which benefit the debt consolidation program. Another key aspect of these specialized debt loans allows consumers with bad credit records and low credit scores to apply and still benefit from low payments.

You may also prefer using credit counseling, along with your debt consolidation loan, to help with the debt-relief process. Credit counselors help guide you through the debt repayment program and provide advice on personal finance. Credit counseling agencies set up a debt management program to help consumers with their debt consolidation loans.

About the Author
Settle your debts today! Read about debt relief from financial writer Brad McDonnell, who is an expert on personal finance topics involving debt consolidation, credit card debt, and bankruptcy. Credit Solutions provides an affordable consolidation alternative.

3 Tips for Debt Consolidation Loans

Wed, 10 Oct 2007 14:01:25 CDT

Debt consolidation loans combine all your high-interest debts into one large debt. You save money by paying a lower interest rate on the debt consolidation loan and benefit from an easy-to-manage budget.

In order to maximize your savings with debt consolidation, you should adhere to the following three tips:

Choose the best lender to consolidate debts
Ensure your consolidation loan carries a low rate
Check your credit report

Choosing a Consolidation Loan Lender

Borrowing a debt consolidation loan from a reputable lender ensures safe debt relief. You should research several different lenders to find the best terms and lowest interest rate. When searching for a lender, make sure you select one that will design a debt consolidation loan according to your financial situation.

Obtain a Low-Interest Loan for Consolidation

Instead of paying high interest rates and other fees charged by your credit cards, debt consolidation loans allow you to pay one low rate. The goal for any debt-relief program is to reduce your debt principal, and paying a low interest rate enables you to direct more money toward your debt principal. Debt consolidation loans that carry the shortest repayment terms often yield lower total interest charges than loans with longer terms.

Check Your Credit Report

Prior to meeting with a lender for your debt consolidation loan, you should obtain a copy of your credit report. Once you receive a copy of your credit report, you can review the information to ensure no errors exist. If your report contains an error, it could cost you thousands of dollars on your consolidation loan by preventing you from receiving a low interest rate.

Author Bio: Settle your debts today! Read about debt relief from financial writer Brad McDonnell, who is an expert on personal finance topics involving debt consolidation, credit card debt and bankruptcy. Credit Solutions provides an affordable consolidation alternative.