Debt Help Services

Posts Tagged ‘Credit Consolidation’

Question: Credit Card Debt/Debt Consolidation Loan?

I have amassed $16,000 in credit card debt. I am contemplating the best way to tackle this debt as there are other things that I want to do with my recently purchased condo. However, I will not begin to make any improvements or take on further debt until I am totally credit card debt free.

The credit card debt is contain on (2) credit cards that have an interest rate of 9% and 12% respectively. I am considering a debt consolidation loan but preliminary research shows that the interest rates being offered are higher than my credit cards’ interest rate. The fixed payment of a debt consolidation loan is what is most appealing to me. What suggestions do you offer? Is it possible to receive debt consolidation loan at a rate lower than what is being offered? Are there other debt reduction remedies that I should consider? Let me know if you need additional information. Please help. Thank you for your time

Answer: This is actually a pretty easy answer. If you can get a consolidation loan at a lower interest rate and can afford the payment, you should do it.

Otherwise, it really is a discipline issue. Any installment loan will have a fixed payment, but the payment would certainly be higher than the combined credit card minimum amounts. Therefore, there is nothing preventing you from paying the same amount (as the would-be installment loan payment) on the credit cards each month. Depending on the balances, most would say pay the higher interest rate first but there are benefits to paying off one completely first as well. The interest rates are close enough that I really don’t think it matters where you put the extra money as long as the balances are coming down each month.

The only possible benefit to getting an installment loan at a higher rate than the cards would be to try and quickly improve your credit score. This is not a given depending on your credit file but in theory, reducing your credit card utilization should have a pretty big impact on your score. This is assuming your utilization is over 35% with current balances. Paying these off with an installment loan could improve your score more than the negative impact of opening a new account and taking an inquiry or two to get the installment loan. If you do not need the bump quickly, I would NOT get the installment loan unless the rate is lower. It doesn’t make financial sense and there is not a 100% guarantee transferring the debt from cards to an installment loan will improve your score.

I cannot answer your question about whether or not you can get a debt consolidation loan at a lower rate or not. That depends on so many things like credit, income, and assets that you really need to speak to a banker. I would recommend a credit union in most cases.

The only other possible thing you can do is contact the credit card companies and ask for a concession on rates or fees. If you have not been late, this is unlikely but many card issuers are working with the card holder more and more to reduce the payments, fees and interest they pay in an effort to stave off delinquency and chargeoffs. This is less likely in your case because the cards are already at a pretty low rate.

Otherwise, there really is not much more you can do that makes sense. Just apply as much as you can to the card balances each month. Just “pretend” you have an installment loan and pay that much each month – the results are the same.
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Hope that helps, post back if need be- regards

Good luck!

How Credit Card Debt Can Affect Your Marriage — A New Horizon Credit Counseling Thinks Debt Consolidation May Help …

A New Horizon Credit Counseling sees that marriage in these difficult economic times can be stressful enough, but when both spouses have credit card debt, it can make things even worse. Stress can sometimes lead to arguments and problems within a marriage and unmanageable credit card debt can be the leading source of this stress.

Credit Card Debt Consolidation 181

Question: What is the best company for credit card debt consolidation loans?

I am planning to consolidate about $4000 in credit card debt by personal loan. What are the best lenders to approach?

Answer: What keeps most people in debt is the fact that they keep spending more money than they make. They look at the “monthly payments” instead of the total debt loan that they are carrying. People need to stop spending now and concentrate on becoming debt free. Please do not consolidate or use a debt reduction company . It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. Student loans are the only debt that can garnish your wages for non payment without taking you to court first. Just list them out on a piece of paper or a spreadsheet and follow the plan. If you work the plan, the plan will work for you.

A. Have a garage sale and sell anything that you no longer need or want.

B.Get a temporary part time job, if you have one, get another.

Here is a plan that can help you. If you work the plan, the plan will work for you:
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an “emergency fund” category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don’t even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment

Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment

Debt #1: paid off
Debt #2: paid off
Debt #3:Minimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for “fun” to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

You can do it and it isn’t as hard as you think. Just follow the plan

Financial Literacy Month and Credit Card Debt Consolidation — A New Horizon Credit Counseling Weighs in

FORT LAUDERDALE, FL–(Marketwire – March 31, 2010) – A New Horizon is a well established Credit Counseling company with over 15 years’ experience as a non-profit organization assisting individuals and families from all walks of life in regaining control of their finances. This is accomplished utilizing Financial Literacy training and a host of programs to counsel and educate individuals on the …

Credit card companies target bankruptcy filers.

Question: What is the best route to go? Debt Consolidation Services or Credit Repair Services?

I am currently overseas and would like to fix my credit as soon as possible, but definitely do not have the time or the resources to contact my creditors. The internet is the only means possible right now and I would like to know if there is any services out that that stand out above the rest.

Answer: I would go with the Credit Repair, after all that is what you are trying to do is repair your credit. Good luck.

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While most debt can be found in the mortgage belt, some of Brisbane's blue chip suburbs are drowning in it.

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Question: Help- credit card debt!!!?

I have the following debts:
Wells Fargo Mortgage- $62000.00
Citizens Auto Finance- $25000.00- Behind 3 payments
Debt Consolidation Loan- $18000.00
GE Money Line of Credit- $8000.00
Chase Credit Card- $5500.00- Behind 3 payments
Sears Card- $1600.00- Behind 2 payments
JC Penney Card- $1200.00- Behind 4 payments
Wal Mart Card- $1500.00- Behind 1 payment
Natural Gas- Behind 4 months

HELP!!! I only make $45000 a year before taxes!!!

Answer: First CUT UP THOSE CARDS!!!!!

Next you need to try and cut down the debt. If possible refinance and consolidate- though I see you have a Debt Consolidation Loan... so if you can, do it.

If you can't, of course pay the highest interest rate cards first. Or calculate the amount each card will cost + interest in the long run according to the amount you owe.

Next sell your car, or give it back, obviously you can't afford whatever type it is. Buy a used car -or even better, use public transportation, a bicycle, or your own two feet.. Who cares if the car is nice, when it's costing you an arm and a leg?

Next you have to CHANGE YOUR LIFE STYLE, as in cut your other expenses

Take shorter showers- get wet, turn off water, soap up, rinse off.

Turn off lights, go buy energy saving light bulbs. Don't use heating for your house, if you're cold suck it up and wear a damn extra sweater. Similar if it's burning up outside, only use a fan, carry an ice pack, go around with light clothing.

Learn to cook, at home, no exceptions. Brown bag your lunch.

From all the store cards you have I'm guessing that you buy a lot of things- either pawn them, or sell them on ebay.com, half.com, amazon.com etc.

Have a garage sale and get rid of your junk-it's amazing what people will buy.

Try to work overtime.

If you live by yourself, consider getting a roommate to cut costs, or move into a cheaper place.

Does this all sound stupid?

It's lifestyle choices that will help you from now on, even if you file for bankruptcy, because the choices you made were the ones that got you into the debt.

If you buy stuff to keep up with appearance and to impress people, you'll only look a fool later because they'll be hearing about your bankruptcy.

Make a strict budget. Don't break it, or get frustrated and say F-this. It's what will keep your from going into further debt, or in the future, from falling into the same cycle. Living within your means, it what will allow you to live comfortably.

Wells Fargo Reports $2.5 Billion in Net Income

SAN FRANCISCO----Wells Fargo & Company : Strong, broad-based earnings Net income of $2.5 billion after integration expenses of $247 million after-tax Earnings per common share of $0.45 after integration expenses of $0.05 per common share All business segments contributed to the strong earnings results: Net income from Community Banking of $1.5 billion; Wholesale Banking of $1.2 billion; and ...

Question: Reducing credit card debt?

I am on a budget, successfully last two years. Before then, we racked up nearly $9000 total in credit card debt on five cards. (home repairs, stuff). We have paid our credit cards on time, and have NO credit cards now. My problem, I am aggravated. Before my budget, I was late paying on two cards , and all cards jacked my rates to nearly 30%. So, even paying on time the last two years, the companies still deem me ‘risky’ since I only pay minumum. I still owe $9000!! I asked for a payoff amount, since half of what is owed is interest and penelties. They all say no, nor will they reduce the interest rate. (heck, they have a gold mine with me!) Anyone have luck with a letter asking creditors to take a lower payoff amount ?? I am caring for an ill son so i can’t work, and my husband’s job cut back so we are getting half of what we were earning. I don’t want to do debt consolidation, since they tend to be a scam. If I can’t negotiate a lower payoff amount, how can they?

Answer: If you own a home, a secured debt consolidation loan may be right for you. This type of loan is essentially a home equity loan which is used to pay off your other creditors. Secured consolidation loans help many consumers by consolidating all of their debts into a single monthly payment with a lower interest rate and payment amount. However, be careful before you borrow money against your home to pay off credit cards and unsecured loans; you are converting what was previously unsecured debt into secured debt. This could cause you problems down the road if for some reason you are unable to make your payments, or if life circumstances force you to file bankruptcy, as you may not be able to discharge the secured debt as you would unsecured debt. However, secured debt consolidation loans work for many people, so this is an option to consider carefully?the Bills.com Savings Center is a great resource to help you find a lender for this type of loan.

Also, a good resource is...

http://www.safelinked.info/jump.php?link=debt

Best of luck to you.

Debt Settlement and Mortgage Modification Scams on the Rise, Warns Chicago Bankruptcy Lawyer Richard Fonfrias

Experienced Chicago bankruptcy lawyer Richard Fontrias of the Fonfrias Law Group, LLC, warns that the number of debt settlement scams and mortgage modifications scams reported in the state of Illinois is on the increase and that consumers need to better understand their rights under the law in order to take control of their financial future.

Consumer Credit Card Consolidation Fraud