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$130,000 Consolidation Financing in New Mexico

This home owner is pretty typical of many consumers who need some financial help controlling their costs (interest paid) and also managing their monthly cash flow i.e. lower monthly payments. This consumer is well employed, has a decent credit rating and should have no problems being approved for consolidation financing in New Mexico.

Many consumers use their credit cards like cash, and pay them in full each month. The credit card companies reward these good customers by increasing their credit limit on their cards and next thing they know they are carrying a balance close to the new credit card limit. It can be pretty easy to pay a small credit card balance when it is under $1000, but once it climbs to more than that, many people just do not have the money readily available to pay the balance in full by the statement due date. That is when the interest costs escalate to 19% or higher and any money you save by buying items on sale is quickly lost in interest charges.

That is one of the reasons that a consolidation loan makes so much sense especially if there is equity in your home that can be used as security. A decent credit rating also helps to secure a loan with a low interest rate which can save thousands of dollars over the life of the loan. This consumer will be able to consolidate his car loan, his personal loans and his credit card debt into one easy low interest loan. They also want to borrow a bit more to use for renovations of their home. All of this can easily be accommodated and secured by the equity they have with their home.


My Debt Is Out Of Control – Should I Use Debt Relief or Debt Consolidation

The writer to this particular post has raised two really good questions. The first, should he use debt relief or debt consolidation, is a question that we deal with regularly on this blog. The other is a question that many people struggle with every day and that is how to get control of their spending to avoid racking up even more debt after they consolidate their debt or even obtain debt relief.

Most lenders will help with debt consolidation if the client meets the criteria that they have for lending money. These include sufficient income to carry the loan, a credit rating that shows that the client will repay the loan and a history of managing their debt. The writer to this post has indicated that he has trouble on all three issues and he may not be too attractive to a lender. His payments as shown below in the table, will take a large portion of his income. In terms of debt relief, there are no circumstances in this clients profile that would qualify him, unless he declares bankruptcy. He may need to meet with a financial counselor to help get control of his debt and his spending, which brings us to the second question.

This writer has already indicated that he has gone through the debt consolidation process at least once before and has just added more debt by overspending on his credit cards. Somehow he needs to get control of his spending and at the same time establish a plan to repay his current debt. A debt counselor can help with this kind of situation. However, the old saying still applies, You can lead a horse to water but you cannot make him drink. This client can be shown all of the things he needs to do to get control of his debt, his budget etc to avoid just getting into more debt. But if he does not apply all of the recommendations and guidelines, he will be applying for more debt relief or debt consolidation in the near future.


How To Find a Lender When Credit Score is Between 500 and 650

This consumer is looking for a $10,000 loan to help with the purchase of a small boat and wants to know how to find a lender when credit score is between 500 and 650. The following paragraph provides some information on credit ratings and what it means.

Lenders rely a great deal on credit scores to provide them with an indication of how trust worthy an applicant is regarding the repayment of a loan, mortgage or even credit card debt. A credit score of 750 to 850 means you have an excellent rating. Good credit is between 700 to 750 and 650 to 700 is considered a fair rating. Anything below 650 is considered poor to bad. If you are under 350 it means you do not have any credit rating. The national average is 687.

The lower your credit score, the more risk the lenders feel they will be exposed to. To compensate, they either refuse to lend money or they raise the interest rate of the loan. With a fair rating, most consumers will still be approved by lenders, however they will typically be charged a higher interest rate. This means that your loan will cost you more money than someone who has an excellent rating.

In addition to credit ratings, lenders also consider employment, time on the job, recent credit activity and other factors that each lender feels is important. Most consumers with a record of employment, a good record of repaying loans etc will be able to borrow money for a variety of purposes. If they are able to offer something as equity towards the loan, e.g. a boat this may improve their chances of being approved.

Consumers with bad credit scores can improve them, although it takes time and effort to bring it back into the fair or good area. The longer in time you go with no unpaid debts, a record of meeting all financial obligations, work history etc, the better your credit rating will be and the faster it will improve.


How To Consolidate $40000 Without Home Equity

Many consumers find themselves in the position that this writer has asked about. He wants to consolidate $40000 without home equity to use to secure his loan. A secured loan would give him a better interest rate and lower his overall costs for the loan. The chart at the bottom of this post shows the difference in the amount of interest paid for someone paying credit card rates vs. an unsecured loan and also one that is secured over a 20 year period. The period and interest rates were chosen randomly for illustrative purposes only, but are typical of what consumers would pay. There is over a $60,000 difference in the amount of interest paid over the term of this loan which is substantial. It illustrates why that you want to find the lowest interest rate possible.

A lower interest rate also affects the monthly payment significantly as well. There is over a $250 difference in the monthly payment between the highest interest rate and the lowest rate. Anyone can use $250 a month to pay bills etc as well as to pay off a loan more quickly.

Consumers should look for loans to consolidate their debt with low interest rates. While they will not find loans that are as low as secured loan rates, there will still be significant savings for them vs. credit card interest rates. While this consumer has a car loan which has a competitive interest rate, there is the advantage as well of combining all payments into one easy payment. He should remember that he likely will not have his car after 20 years and if he consolidates this debt he is in effect deferring payment on a depreciating item which is not considered the best approach.

Financially he would be better off consolidating his credit card debt with a low interest unsecured loan, keep his car loan separate and use the money he is saving to retire the car loan as quickly as possible.


How To Consolidate Debt Between $10K and $50K in 2015

This consumer has a very good question about how to consolidate debt. His total debt is $28 thousand consisting mainly of credit card debt at high interest rates. He does not have any equity to speak of other than the small amount of equity he has in his car. He currently rents and does not own any property for personal use or investments. He is looking for assistance in finding a debt consolidation loan. He has also asked us to keep this application general so that no one can link him back to his employer.

Many consumers find it difficult to consolidate their debt in these situations due to the fact that they are considered higher risk borrowers. They typically are only eligible for non secured personal loans at interest rates that depend on their credit rating. Consumers with excellent credit ratings can often qualify for personal loans with competitive interest rates. If your credit rating is not in the excellent category, these consumers will pay a higher interest rate on a personal loan due to the perceived higher risk associated with their lower credit ratings.

Consumers in this category, particularly with low credit ratings may often not qualify for personal loans at traditional lenders. As a result they often turn to payday loan lenders who charge very high interest rates and fees associated with processing the loan. Consumers would be better off just continuing to pay their monthly payments and avoid payday loans of this type. The cost of borrowing is just too high.

Debt consolidation loans in general are usually a smart approach to take, however as with most things in life, the devil is in the details. We urge consumers to do the math and compare their current costs with those of the debt consolidation solution. Don’t forget to include any fees that may be needed when you make the comparison. Once consumers have compared their debt consolidation solution, the monthly payments and the cost of borrowing a debt consolidation loan, consumers can make the right decision for their particular solution.

As a final note, regardless of what solution is settled on, consumers are encouraged to meet all of the terms of their loans to maintain and / or improve their credit rating and ability to borrow funds in the future.


$30000, $40000, $50000 Loans For Debt Consolidation

The latest contributor to this web site has a pretty standard need for debt consolidation. Basically he spent some money on trips and home renovations, charged all of this to his credit cards and is now faced with high interest rates on the unpaid balance. Credit cards will charge upwards of 19% or more while personal loans are much lower. They can be as low as 3% at time of writing depending on credit ratings and any security that is provided by the applicant. This is a significant difference for anyone who is paying credit card debt. The savings could be put towards paying off this debt if he can be approved for a low interest debt consolidation loan.

This consumer appears to be in an excellent position to be approved for a debt consolidation loan. He has a secure job, makes decent money and has little debt other than his mortgage on his home in addition to the credit card debt. His car is paid for and he has always paid his monthly payments for utilities, taxes and debts on time. As a result he has a very good credit rating.

There are several potential solutions available for this consumer to consolidate his debt. The first is to assume a personal loan at the prevailing rates for unsecured loans and make the payments over a three to five year term. He will save money on interest, but this solution does not provide him with the flexibility he is looking for.

Another solution is to add the debt to his mortgage and spread the payments over 20 or 25 years. The disadvantage is that this will spread his payments over a long period of time and increase his mortgage. The advantage is that his monthly payments will be much lower and he will save a great deal of money on interest since the mortgage rate is secured and will be much lower.

The last solution is to apply for a line of credit, secure it with the equity in his home to obtain a low interest rate and draw on the loan as needed. This solution would allow him to consolidate his credit card debt at a low interest rate, save a great deal of interest and also provide him with the flexibility he needs to draw on the additional funds as needed when he plans to complete his additional renovation work.


Is The Wealthy Barber Mutual Fund Method Still Valid in 2015

A reader has asked if the wealthy barber mutual fund is still valid in 2015 and also whether his approach of refinancing his mortgage to put money into conservative mutual funds would be a good strategy to catch up on saving for retirement.

This is a complicated question and we have to stress that we are not financial planners and cannot provide professional advice regarding these questions. Reading the Wealthy Barber Returns and other financial books is a great start and one that should be considered for all consumers. The Wealthy Barbers advice includes to begin saving when you are young and watch your money grow as well as paying yourself first. If you start saving later in life and do not have a pension, your retirement may not be what you had planned. Even a wealthy barber can enjoy a very comfortable retirement by following this simple advice.

This reader plans to remortgage his home, take the proceeds and invest in a mutual fund. He hopes to catch up on his retirement savings by following this approach. He has a good credit rating and no other debt which is enviable. Provided that his home has the equity that he needs there should not be any problem being approved for this mortgage refinancing.  We strongly recommend that he hire an accountant to ensure that he follows the appropriate process to enable his plan to deduct interest costs against the income he generates from his mutual fund. Most investment advisers will also recommend that the investments should be completed on a diverse basis to avoid any major losses from being invested in only one  or two investments. Finally all investors should be aware that mutual funds charge MER’s which are an additional cost when you invest in mutual funds.