Bad Debt....and Then What? -Then you stop spending
money hand over fist, and start taking an objective look at how
you have been managing your personal finances.
consolidation loans are often the only way to clean up your high
interest debt(s). Combining all of your "bad debt" is
a very smart thing to do, and every bank, credit union, and private
lender will tell you the same thing. However, there are some aspects
of a consolidation loan that must be understood.
someone in your family has recently been ill, or you have just
gone through a bad divorce, or you have recently become unemployed
- these things happen in life and it may be no fault of your own.
The question you have to ask yourself is;
"Why didn't I save some money every month when times were
better - when I had a good job and relatively low expenses".
of the reasons for having out-of-control debt and growing interest,
borrowers want to find a way to consolidate all their high APR
debt, and start all over. Sound great, but it's now that easy
to get approved if you don't have a long stanging job, and good
credit rating, a co-signer, home equity, or some form of security.
loan is not always easy to get approved.
However, if you are gainfully employed you will eventually find
a lender willing to make some profit from your high interest payments,
or a debt consolidation company that is willing to negotiate with
your creditors pennies on the dollar in repayment. The latter
involves pooling all of your creditor debt into one lump sum payment
over a period of years, in monthly or biweekly installment
you ARE approved for some form of debt consolidation plan or loan,
make sure you change your spending habits and earning habits.
Find ways to live within your temporary means, and find way to
earn more each month. Sounds easy right? I know it's not, but
if you start with baby steps, you will find out that in time you
can change your spending habits.
Sure Your APR is as Low as Possible - You don't have
to settle for a high interest rate on your consolidation.
and private lenders make a great deal of money off every customer/client
that is approved for consolidation financing, when those customers
successfully make their monthly or biweekly payments until the
final termination of the loan term.
You should never just except the first interest rate a lender
offers you - you need to shop around and do business with the
fairest lender you can find. Patience is a virtue as usual. It
likely took you years of over-spending and under-earning to accumulate
all your high interest debts, so you can afford to take your time
to seek out the lowest APR possible.
Even when you are sitting in a loan officer's cubicle or office,
and it looks like you are going to be approved, stop, take a deep
breath, and take the loan agreement to a third-party lawyer to
read over. Sounds "nuts" perhaps, but a bad loan deal
will cost you much more than the small fee charged by a lawyer
to protect you.
for Credit Cards - Lower Loan Principal
usual suspects when it comes to debt consolidation relief are
credit cards. Credit card interest rates are bad enough when the
APR is between 16% - 19% - but when there are rate hikes as high
as 30% you are quickly in deep trouble (and deep debt). Some CC
companies offer low rates for a limited period of time, and then
they hike the interest rates up into the stratosphere - be aware
of these kinds of predatory credit card companies by reading their
CC client agreement.
store cards and gas station cards are also troublesome, because
the interest rates are very high from the first purchase. Department
stores (and the like) learned decades ago (60's - 70's) that they
can make more money from financing your purchases than the markup
on the actual products they sell you.
of Vehicle Loans, LOC, and Mortgage - Higher Loan Principal
higher level consolidation loan is one whereby you pool larger
personal debts into one very large amount. With this type of relief
you are combining vehicle loans, unsecured lines of credit, home
mortgages, medical expenses, etc. These loans can get very high
in the principal amount - often reaching hundreds of thousands
of dollars. This kind of consolidation is usually carried out
prior to a personal bankruptcy, or Chapter 13 proceedings, and
usually involves the use of a debt consolidation company, employing
a structured settlement of some kind (paying back pennies on the
Borrowers Requiring a Debt Consolidation
CLF, we publish the consolidation requests of actual borrowers
who are seeking a debt consolidation loan, and most importantly
we can see WHY they need a consolidation. The personal information
is changed to protect the privacy of our submitters.