Top 10 Ways to Make Debt Consolidation Work for You

Debt consolidation. These two words have become the catch-all for everything from signing on with a credit counseling agency or a debt settlement firm to creating do-it-yourself plans, where you get a lower interest rate on a bunch of your higher rate debts and only have to write one check per month.
Debt consolidation can be a great money saver and stress reducer. Handled correctly, it can vastly improve the quality of your life – both down the road and even while you are going through it. To up the odds that you’ll actually save money and have a positive experience, here’s what you need to know:
1. If the debt collectors are calling, you’re facing a financial crisis. Do-it-yourself debt consolidation alone won’t solve your problems. Start reading and get professional help now. Your credit score has no doubt suffered because of your financial problems, so don’t bother applying for those great low rates that are endlessly advertised.
Instead, treat yourself to a free, private debt consultation and let a Credit.com professional steer you to the expert help you need. For example, your best option might be to work with a non-profit credit-counseling agency , which can help you create and stick to a budget – as well as negotiate with your creditors on your behalf.
2. Feel like you’re making ends meet? Don’t let the lure of the low minimum payment keep you from considering debt consolidation. Even if you owe a lot at a high rate, if you’re managing to pay the required amounts, you may be tempted to leave well enough alone. Watch out! Aside from all the money it would cost you, someone’s going to get sick, fired, divorced, flooded, and burned out – you name it – while you read this. It could be you or someone you love!
Olivia and Oscar Overspender jointly owe $20,000 at 18% on the various pieces of plastic in their pockets. Since they can come up with the $400 they’re required to pay this month on their credit cards, as well as the amounts they owe on their other bills, the Overspenders are tempted to simply write the checks, and not invest the time and energy to consolidate their debts.
But if they only knew how much their complacency was costing them … and their kids … they might think differently. By only sending in the required minimums, it will cost the Overspenders $78,931 by the time they finally pay off these credit card bills – some 69 years from now. That’s almost four times what they owe … assuming they don’t charge another nickel on these cards! (And this figure doesn’t include anything they could have earned on that money if they had it working for them as an investment account.)
3. Don’t rush into anything. It’s great to explore true debt consolidation plans – where you get a lower interest rate and pay off your debts quickly. But just like there’s no benefit to the sort of complacency that Olivia and Oscar Overspender have, rushing into a debt consolidation scheme can be just as bad. Don’t give into the feeling, “I want a solution and I want it NOW!”
If you’re tempted to jump at the first, “We’ll cut your monthly payments in HALF” ad that you see, turn off the TV. And certainly don’t run to call the advertised 800 number.
Hold off a little while longer. It took you quite some time to rack up all those debts, didn’t it? Take the time to consider the pros and cons of the debt consolidation options you have available to you. You probably have more choices than you think. For example, you may be able to get:
A personal loan
From a bank, credit union, or other professional lender
From a family member or a friend
One or more low(er) rate credit cards, which you could use to transfer balances from pricier pieces of plastic
A new or refinanced mortgage
A home equity loan or line of credit
A loan you give yourself
From your retirement fund
Against your life insurance policy
Against your savings (e.g. CDs, stocks, and bonds)
Each of these options comes with its own pros and cons. Become familiar with them before you do anything. For more information, start here . What might work for Olivia and Oscar Overspender might not be best for you. By taking the time to make the right debt consolidation choice for your family, you’ll save money – and grief.
4. Be clear on your payoff goal. If you want debt consolidation to save you money, getting the lowest interest rate you can isn’t enough. Commit to paying your debts off as fast as you can – in 3 to 5 years – and in even less time if you can swing it.
Do you know how much to send in to pay off your debts in 3 to 5 years? If the Overspenders first reduce the interest rate on their $20,000 debt from 18% to 13%, how much it will cost them a month to pay it off in five years?
$455
$674
$837
The correct answer is 1. $455. That’s not much more than they are sending in now. Take a look at the following “Pick a Monthly Payment” Chart to see how much you need to send in to reach your payoff goal.

SOURCE : www.credit.com

Student Loan Consolidation Tips

You’ve graduated from college and entered the “real world.” Now all you have to do is figure out your student loans. On average, college students graduate with a whopping $20,400 in debt. Consolidating your student loans can be helpful if you have a large balance spread out across multiple lenders. Before you apply, make sure you know the pros and cons of consolidation:
Pro – Consolidating helps you lock in a low interest rate. Student loan rates are currently at all-time lows, making this the perfect time to consolidate your federal loans. If you consolidate, your new interest rate will be calculated by averaging the rates on your current loans. If you don’t consolidate your loans, your rates could increase in the coming years.
Con – Consolidating can increase the overall cost of your loan. When you consolidate your student loans, the debts are combined into a new loan with a longer repayment term. This new 10-30 year term allows you to reduce the amount you have to pay each month but increases the long-term interest costs of your debts. If you can afford to pay off your current student loans quickly, it may be a good idea not to consolidate.
Pro – Consolidation makes it easier to manage your debts. Borrowers with multiple federal student loans can have a hard time keeping track of when to pay and how much is due each month. When you consolidate your loans, you’ll only have one payment to make each month. Plus, you’ll only have one lender to deal with.
Con – Consolidation requirements can be tough. Student loan consolidators have a set of strict requirements for potential borrowers. Your current loans must be from select lenders, your total loan amount must exceed $10,000, you must have graduated or left school already, and you must not currently be in default on your loans.
Pro – Consolidation comes with some other perks. Consolidating your student loans can help increase your credit score by reducing the number of open accounts on your credit report. You can also get a better deal on a consolidation loan if you meet certain special requirements, such as if you graduate within 6 months of the consolidation period and/or if you pay your loan on time consistently.
Con – Consolidation may not be your best option. There are other programs available to help you repay your loans or have them forgiven. Government programs exist that help borrowers repay their student loans by doing community service or becoming a teacher in certain areas. If you have a Perkins loan, there are opportunities that allow you to have the debt forgiven. It is a good idea to research all your options before you consolidate.

source : www.credit.com

Student Debt Consolidation Loan UK

The figures cast a shadow on the thousands of students hoping to start studies in the coming autumn. However dream is getting distant since spiraling debt problem. Debt has not deterred students from applying through, but daunting debt does put off some students from poor backgrounds from the facilities they are looking for. They have nothing to ponder over but debt elimination first before taking any loan. Consider the students’ financial situations; the lending authority has made their mind for generous assistance of student debt consolidation loan UK.

A student debt consolidation loan UK is an act of debt solution. This student debt consolidation program is an organised from of debt repayment on monthly basis. Under the provision of student debt consolidation loan UK a single lender works as a middle man. This selected man calculates whole of the debtors’ debt amount, and charts out a single comparative repayment scheme.

No matter of individuals’ credit history, since individuals having IVA, CCJs, bankrupts, arrears, defaulters too can avail the benefits of the student debt consolidation loan UK. On the problem if any they may have to face up with is a brief current credit checks. On the basis of the study of the debtors’ financial status, the subsequent student debt consolidation loan UK program is planned to the students.

There are many lenders going in for the cause of student debt consolidation loan UK. With their respect terms and conditions, these lenders try to lure student to their sides. Cautiously, students are required to hold their breath making any debt consolidation loan plan. Just once go through the policies and plans being offered to them.

For, the best thing about the student debt consolidation loan UK is that, these days, this loan can be accessed and applied through online too. There are innumerable sites of student debt consolidation loan UK, cull some of them and make a comparative study of the terms and conditions. Lastly, make your plan of student debt consolidation loan UK according to your financial feasibility.

The Basics Of Student Loan Debt Consolidation

You can consolidate your federal student loans too, but make sure that you do not consolidate both your federal student loans and private student loans into a single student loan debt consolidation program. Just as other debt consolidation loans, you must make your student loan debt consolidation payments to a single lender, who further disburses to your old creditors.

To go for debt consolidation of your student loans, your minimum balance should be $5,000, and you must either be in the six month grace period after your studies, or are already repaying your student loan.

Before selecting your student loan debt consolidation option, review all the advantages and the disadvantages:

• Through debt consolidation you make your student loan payments to a single lender.

• Depending on the balance of your loan amount, your consolidated student loan has an extended repayment term from 10 to 30 years.

• When negotiating with your bank or financial institutions, ensure that your phased repayment plan allows you to easily meet your monthly payments and have a good credit rating, at the same time.

• The rate of interest for student loan debt consolidation is capped at 8.25 percent for federal student loans.

• Once the rate is fixed you cannot take advantage if the interest rates fall in future.

• There are no fees charged for student loan debt consolidation.

• Once approved, you cannot undo your debt consolidation of your student loans as they have already repaid in full to your previous creditors, and they no longer exist.

You can still obtain debt consolidation for your over due, or unfulfilled, student loans if you negotiate a satisfactory repayment plan with your bank, or debt consolidation lender. Married couples, too, can consolidate their individual student loans together. This is regardless of how much each owns before consolidation, and must now agree to pay the consolidated amount.

Student Debt Management Services

Student debt management services are specially designed for the benefit of students. They can provide a clearer and easier way to manage their debts. There are many debt management services available for students. They also give many options for the students to get out of a large debt. Students can locate debt management services easily by browsing the Internet.

The high cost of tuition creates problems for many students. Students often enter their new profession with severe debt. Student debt management services not only lower the monthly payment of students, but also reduce the interest rate and late fees. The repayment of an educational loan is usually very difficult for students from low and middle class families.

Student debt management services mainly assist students with past due accounts, loans and returned checks. They work with the students to set up the repayment agreements.

Most of the student debt management services provide an online money management course to students. The online debt management course is usually designed to help the students to learn effective management of money. Student debt management services teach the students how to manage their debt by setting short term and long term financial goals, and developing and maintaining a budget.

High debt of students is often due to high tuition costs. There are many other important components that cause high debt. The debt of students from families of low or modest income is usually much higher than students from wealthy families. Thus, student debt management services are very helpful for the students from low and middle class families.

Student Loan Debt Consolidation - An Overview

There are a number of student loans and can be categorized into two main types: Federal Student Loans and Private Student Loans. The Federal student loans are disbursed through the US Department of Education's Federal Student Aid programs, and are the easiest to obtain. The private student loans are obtained from standard lending institutions and banks, among others. You can use both types of loans to fund your education, but when it comes to your Student Loan Debt Consolidation, never mix up the two together.

Start by consolidating your Federal student loans first. The benefits of student loan debt consolidation of your Federal loans is that:

• The rate of interest is lower

• It reduces your monthly payments as the term of loan repayment is increased to 30 years, depending on the loan balance

• The repayment is consolidated to a single check payment each month.

You are eligible to go for your student loan debt consolidation of your Federal loans when you are not enrolled in school any longer; you are actively repaying your loan or are in your six-month post-graduate grace period; you have a minimum loan amount of $10,000.

The reason why you should never mix up the Federal and private loans during student loan debt consolidation is that the interest on Federal loans is tax deductible; you can defer payments when you go back to school; and the loan is forgiven for certain types of service. Private students loans do not have these advantages as they are treated just as normal loans. Mixing up the Federal and private loans during student loan debt consolidation makes you lose all the benefits of the Federal loans consolidation.