Have you ever considered debt consolidation? For some folks with credit issues, debt consolidation could very well be the only solution. Debt consolidation simply means borrowing enough cash from your bank to cover the repayments on all your arrears, wherever you borrowed the money from originally. There are a number of advantages when you consolidate - you only need to make a single payment every month, direct to the bank that now holds your consolidated debt. This also means you'll usually pay out less cash every month, too, although the overall amount you end up paying is likely to be greater. Don't forget that there will be finance charges when you agree the consolidation - these typically run at a few percent of the total loans you are consolidating.
People generally run into trouble and need to consolidate when they have run up large amounts on their various credit cards. Credit cards have surprisingly large rates of interest (APRs), and consolidating these credit card debts into one straightforward loan allows you to effectively reduce the rate of interest you pay monthly. What this means is that debt isn't a difficulty so long as you can repay it at the new reduced level. In conjunction with debt consolidation, you should think about making a few lifestyle changes too.
For example - the most significant step in conquering credit card debt is to effectively manage your spending. This starts with being a decisive customer, one who can detach themselves from their wants and focus instead on their needs. The issue with credit cards is that they allow people to blur this distinction, and make it seem like 'everything is available now'. This attitude is the main reason modern society is generally so indebted - the easy availability of credit cards and loans in general have engendered a 'buy it now' mentality, where our predecessors, if they could not afford something, would save up for it.
Another example is to prioritise. Figure out what bills MUST be paid immediately and which can be put on the back burner for a while. if you have consolidated your credit card debts, of course, this chore is no longer necessary.
Questions to ask before signing on the dotted line? What upfront fees are involved, how much you'll end up paying in total over the life of the loan, what their procedure is if you miss a payment, whether you can pay it all off in one go without penalties. more...