Thinking Beyond Debt Consolidation Loans


Planning to devise a permanent solution to the problems of debt? The chances of success, to be exact, are lesser, given the features which characterize the debts. Debts are the result of the disequilibrium in the relationship between income and expenditure. Whatever be the income of a person, they seem inadequate to suffice the unlimited expenses. Thus debts are bound to emerge again and again.

This must not however discourage us from finding a solution to the debts. Debts can make lives difficult. You will have creditors making regular phone calls and then dropping by at your house demanding the amount lent out. With the creditors making a scene, the personal image and the credit is badly marred. The mind is heavily stressed and some people may even contemplate suicide.

But how many of us do actually take the step to end ones life? Only a handful of us; because we value our lives and because we know that ending ones life is not going to solve the problem of debts. The creditors do not intend to leave the amount. Once the principal borrower deceases, they catch the co-borrowers or the dependants of the principal borrower.

A simpler method of getting rid of debts is debt consolidation. Debt consolidation can provide relief from the debts without burdening the borrowers. Debt consolidation as the name goes consolidates or brings the various debts on the borrowers account together. The debts could have been dealt individually, but this would have been a tedious process. The consolidation of debts helps to generate the feeling that they are not as invincible as they appear.

Once the debts are consolidated or brought together, they are ready to be settled. The borrower will have to choose from a variety of ways of debt consolidation. In the following section we shall discuss the methods of debt consolidation in detail.

Debt consolidation through credit cards:

Credit cards can be an excellent method of debt consolidation. There is no requirement of the collateral. This saves the users from the fear of losing assets in case they are not able to repay. However credit cards are very costly. The interest rate charged by the credit card companies is very high. The manner in which the user negotiates the interest rate will decide the actual interest charged on the balance transfers.

Debt consolidation through debt consolidation loans:

Borrowers who want to save on the interest rate would do best by repaying debts through a debt consolidation loan. The interest rate is minimal. The debt consolidation loans are traditionally used and preferred most because of the flexibility that they offer. The burden on the borrower is reduced by spreading the loan amount on the various months making up the term of repayment. People having resources can pay off the loan amount without waiting for the term of repayment to end, provided the lender does not forbid a premature repayment. The borrowers can decide on the manner in which the interest is to be charged.

Debt consolidation through home equity loans:

Home equity loans are secured loans. These are generally issued against the home as collateral. The minimal risk calls for a lesser interest rate. The repayment of the home equity loan is similar to the debt consolidation loans. However, the borrowers must be regular in the monthly repayments to the home equity loan. Otherwise the home may be repossessed to make the default good. The home equity loan can be used for purposes other than debt consolidation, if the borrower so desires.

Debt consolidation through credit counseling:

Credit counseling agencies help in the settlement of loans by payment plans. The borrower will be required to make monthly repayments to the payment plan suggested. Credit counseling can agencies provide tips on how the debts can be prevented from erupting again.

Debt consolidation through cash-out refinance:

Cash-out refinance helps to refinance mortgages and other debts. These mortgages and debts are refinanced either to get an improved interest rate or get benefited on the increased equity in ones home.

Debt consolidation through debt settlement:

When consolidating debts through debt settlement, the borrowers are to make the repayments to the settlement company. As the balance on the debt falls, the settlement company repays the balance of the debts. The main advantage of debt settlement is that the borrowers are freed of dealings with the creditors. Creditors contact the settlement company for any queries related to debts.

Debt consolidation through rapid debt repayment:

The method of debt repayment repays the debts according to the priority. A monthly repayment is to be made towards the payment of debts. The high interest debts are to be repaid first because more is the delay in the repayment, more will the cost be.

Since there are massive differences between people and their conditions, no one method can be imposed on all. Each method has its own pros and cons. while some may be benefited by a debt consolidation loan, others are not. A proper study of the individual condition either by oneself or by people having a proper knowledge of the field can help find the best method to fight the monster named debt.

James Taylor holds a Master's degree in Commerce from JNU. He is working as financial consultant for http://www.chanceforloans.co.uk.

To find a personal loans, bad credit loans that best suits your needs visit http://www.chanceforloans.co.uk


More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Debt Consolidation Information:

Related Articles


Whats the Difference Between Debt Settlement and Debt Consolidation?
The Debt Settlement process involves negotiating with your creditors to settle your debt for amounts significantly less than you currently owe; typically debt settlement can settle your debts for 40-60% of your current balances. This will save you sizable amounts of money on debt principal and interest.
Debt Consolidation Mortgage: Home Solutions for Integrating Arrears
Credit card debts, auto loans debts, secured loans debts, unsecured loans debts - debts of all sorts and types registered against your name. It is hardly a very promising situation.
Reducing Credit Card Debt
One of the easiest "things" that can happen in life is the ratcheting up of a large credit card debt. For whatever reason, making purchases with credit cards seems easier than spending cash to obtain a product or service.
Credit Counseling - Six Tips to Avoid Counseling Scams
Credit counseling is a useful service for anyone with problem debt. A good counseling agency can provide advice regarding money management and debt consolidation.
Individual Voluntary Arrangement IVA, an alternative to bankruptcy
Individual Voluntary Arrangement, IVA is an alternative to bankruptcy - which could provide you with a real solution to your debt problems.An Individual Voluntary Arrangement (IVA) is an alternative to bankruptcy.
Debt a Glossary of Terms
Bankruptcy - Having been legally declared financially insolvent. There are two types of bankruptcy - liquidation, in which your debts are cleared (discharged) and reorganization, in which you provide the court with a plan for how you intend to repay your debts.
Burdened with Debt?
Too many debts? Having trouble paying your bills? Are you worried about losing your home or your car?You're not alone. Many people face a financial crisis some time in their lives.
Debt Consolidation with Free Government Grants? One Scam to Avoid
Have you ever seen a commercial or an ad promising "free government grant money?" According to these ads, the government and other organizations give away nearly one half a trillion dollars each year, and all you need to do is apply! The ads go on to state that the money can be used for anything, including debt consolidation , student loans, a yacht or just about any frivolous thing you can imagine. All you need to do is call their toll free number, buy their book or enroll in their program and the details are soon on their way to you.
Debt Consolidation - Options for Reducing Your Debt
Studies show that Americans are now saving less than ever before. Along with that, Americans are carrying a heavier debt load than ever.
A Simple Question We All Wonder - Are Debt Settlement Companies Scams?
Are debt settlement companies scams? It's a simple question so does it have a simple answer?Along with the genuinely helpful firms, there are plenty of operations billing themselves as legit debt settlement companies. These debt company scams prey on debtors by promising relieved debt and empty their pockets forcing payment of outrageous fees.
Is There Something Called a Bad Credit Credit Card?
Is there something out there called a bad credit credit card? Well, when a bank or Credit company such as Bank of America, Washington Mutual or Chase receive an application from you, they use a statistical system to determine whether or not to grant credit to you by assigning numerical scores to various characteristics related to creditworthiness. This means the creditor's measure of your past and future ability and willingness to repay your debts.
The Pros and Cons of Debt Consolidation Loans
You are swimming in debt. You have 4 credit cards maxed out, a car loan, a consumer loan, and a house payment.
Use Caution When Entering Into Debt-Consolidation Loan
To the person drowning in debt, a debt-consolidation loan looks a lot like a lifesaver. But agreeing to such a loan without understanding it completely could be a serious mistake.
Debt Consolidation Company and Companies
Debt consolidation companies have dotted the debt solution landscape as a result of the critical financial conditions consumers find themselves in from heavy credit card debt and other unsecured loans. With approximately 80% of Americans in debt up to $10,000, some are exploring a debt consolidation company in order to reduce or eliminate the crushing debt load that they carry.
10 Pointers on College Loan Consolidation
Should I consolidate my college loans or not?1. Still in school, yes! Rates are low, but they're scheduled to go up.
Does Working With a Credit Counseling Organization Hurt Your Credit Score?
Credit counseling organizations do not lower your credit score when you approach them for assistance in creating a budget that you can work with. Credit counseling is designed by nature to assist each individual in a way that is unique to a person's particular situation.
Thinking Beyond Debt Consolidation Loans
Planning to devise a permanent solution to the problems of debt? The chances of success, to be exact, are lesser, given the features which characterize the debts. Debts are the result of the disequilibrium in the relationship between income and expenditure.
Debt Consolidation can Ruin Your Credit
Yes, Debt Cosolidation isn't a good idea and I'll tell you why. I've done research of my own and found out some disturbing information.
What is the Difference Between Unsecured and Secured Debt?
A secured debt is a debt in which the creditor maintains a security interest in an item or piece of personal property such as a house or an automobile. With secured debts, if you fall behind on payments, the lender can repossess the property that originally secured the debt.
No-Cost Student Loan Consolidation
No-Cost Student Loan ConsolidationA no-cost student loan consolidation - doesn't that just sound too good to be true? Think about it. You have just accrued thousands of dollars in debt through student loans after 4 years of college, or possibly even more.