December 9th, 2009 | 
Author: When credit card debts tend to pile up and payment is difficult for the card holder, debt consolidation is a method they should be seriously thinking of. Debt consolidation is the combining several credit card debts into one low payment. It means paying lesser interest rates, stopping the harassment, getting customized and individualized help, negotiating with the credit card companies on the behalf the card holder. This will deem advantageous to the card holder as it entails lower interest rates and great simplicity with achievable goals. One manageable payment to cover several debts can cut high-interest debts down to one low-interest loan. It will free more personal money which can be put toward the principal leading to quicker debt payment also. The main aim of debt consolidation is to reduce debt immediately. As the loan system works, more the wait, the more lost cash.
Credit card debt consolidation programs should not be confused with debt consolidation loans. Credit card debt consolidation does not involve loaning or lending. It involves strategic dialogues and negotiations with the credit card companies to reduce current interest, overall payments and the balanced owed to the company. Usually these negotiations involve bringing down the principal balance owed by the consumer to about 50 percent.
Credit consolidation loans; on the other hand, helps the card holder pay off unpaid credit card balances and charges by taking a loan. It can usually be done with collateral like home or vehicle deeds. Suitability of a loan will also depend on the nature of the loan and the debt, current income and other unexpected factors. Though in some cases taking consolidation loans may not even be an option when the consumer has a bad credit history, very high debt balances etc. On the other hand, one should also take notice of many studies done in this field which show that people who tend to take second loans to pay off primary ones end up in the same financial straits in a short amount of time. This credit consolidation loans should be viewed as a temporary relief measure which is short term and should be treated with caution.
Credit card debt consolidation can also be done by taking the balances of all pending credit card payments and putting them on another credit which has a lower interest rate and minimum payment. In the worst case scenario when the credit card debt seems out of hand for the holder, then the card holder can avail the option of paying back the credit card company over a period of 5 years through a court-approved payment option.
Overall credit card debt consolidation is a good option for consumers plagued with debt. Though it depends upon the terms, rate and conditions of the current payment course, which should be significantly lesser than the current ones. Income stability should be the most important factor for persons choosing secured debt consolidation, as unexpected expenses can arise and this can force the persons to miss a payment. Missing payments in secured debt consolidation can have serious repercussions like foreclosures and seizing of vehicles etc by the bank involved.
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Posted in reduce credit card debt
Need financial advise, I want to get out of my credit card debt!!!!?
Well, it is ashamed to ask this question but it is true that I’ve been living in this condition for couple years now and it made me so depress because of my personal financial problem. But I am still hoping and trying to find everything I could to recover my credit. I hope I will get some advise from you guys out there to help me start rebuild my financial life again.
Since last 5 years ago the first time I moved to this country I started apply my first credit card with US Bank, I’ve been living so happy with it, I thought it was cool when using credit card, I spent money like a rich kid, and I got a really good credit, then I applied for any other cards from one bank to other banks till I ended up with 5 different credit cards. Then 3 years gone by I couldn’t handle these credit cards, I ran out of control and ended up with a balance of 22K at the age 27 years old now, so still there is a long way to go, if I am keep paying the minimum payment like this I will end up paying those creditors for my whole life. I did try credit card consolidation but it just reduced my interest rate Now at this time I decided to go with debt settlement company in order to get rip of this debt and start a new life, but of cause it gonna take me couple years to settle this 22K debt. Now I m paying the settlement company $430/month for 28 months to settle my debt.
So first of all please ignore my grammars I know you understand what I am talking about, but I am seeking for advise from you guys out there:
1. I can possibly maintain my monthly payment of $500 to $800 toward my debt, so is there any alternative way beside debt settlement and bankruptcy to get rip of this debt? now my credit score gone so bad and there is one collection on my credit already, and soon there will be more as I am enrolling in this debt settlement.
2. I start looking at peer to peer loan and sound like an other option for me as long as I have a co-borrow with a good credit, but I am kind of hesitated and not sure how legitimated it is. Can anyone advise me if I should go with it?
I am making 90K from my job but I am still living in this horrible life because of my debt. This is a really bad experience that I am currently having in my life and I hope everyone who read this post will learn from what my mistake was, and won’t go on the same path as me.
Yes I will looking into my daily living expense and hope I will cut some of them. Originally, it was 35K on my balance but then I tried to sell most of my asset (Stock, I don’t have a house) and brought it down to 22K. So at this moment of 22K debt I have nothing beside my monthly salary. I am so upset when I see most of my friends now they bought houses even they make less money than me, I was really poor in my money management.
please note that it took you 5 yrs to build up this debt so it will not go away any time soon…you have lived beyond your means and now even with a nice salary you would need to live on a very tight budget…
if you are with one setlement agency let them deal with it. if you have any assets sell them or down size on you car etc..
try to pay off the high interest cards first as even ifthey have a less balance they are taking a smaller ammount out your repayment to pay the actual balance…
make a list of your monthly out goings and see where you can save—calculate down to the last dollar/cent… and try to hit the target set
you need to cut back on you outgoings… like going clubing on the weekend… this is not for a week /month but can be for longer so you need to perservere or the bankrupcy would not be a choice but unaviodable….and that would effect your future credit as you are only 27 yet to buy a house etc…
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Wow, its good you want to do something about it, so that is a good thing.
Do you have any assests you can liquidate? Do you own aby valued stock (well in this market, who knows?) or shares you can sell off?
Do you live with anyone? Do you have roomates? Someone to share monthly living costs with? That is an alternative to easing the burden and allow you to pay more toward the total debt monthly.
The only way to get rid of this debt is to pay it off is to pay more than your regular monthly payments. Minimum payments will not due, if at all try doubling them up if you can, or what you can.
Sit down and write out what you make, what you pay out and then look at your needs versus wants. Start eiliminating things you don’t need. I know this is tough but it will not be the end of the world, you can do this. And above all, you will learn and grow from this lesson.
Yes its a hard pill to swallow, but good for you, you recognize and want to do something about it.
This is hard on your emtions as well, because you will be feeling bad about what you let happen, try and keep positive and by that I mean, do something meaningful with your spare time to keep your mind off it. Volunteering can be very rewarding, whether you like to work with kids, animals, the elderly, the environment, teaching someone skills that you know to get them on their feet.
I wish you good luck, and keep a positive outlook (yes it will be a struggle at times) but you’ll be ok in time, just keep at it.
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You can write a proposal at http://www.LOANIO.com (not my website) and have investors bid to loan you money. The other top site Prosper.com has been closed by the SEC and is not loaning money..
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Hi,
I used "Credit Solution" to settle my debt and avoid bankruptcy.They managed to reduce my debt up to 58%.It’s legitimate.I came across this company on NBC News Special Edition.Check it out here:
http://CreditSolution.ez-mart.biz
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