I have gotten a little bit of debt from credit cards that have gone into collections. I want to get these taken care of so I can begin repairing my credit and I don%26#039;t want to file for bankruptcy. Do debt consolidators work? If so how do they work? Do they charge a fee? Is it usually high? Can anyone give me advice on what I should do. I am currently going to school so I don%26#039;t have a lot of extra money to spend but I can work with it. Help please!
Do debt consolidations work?
How did you get a credit card if you are at school?
For reference: If you are no good with money these might not be an answer as you%26#039;d need to be strict about repayments.
Do debt consolidations work?
You already have bad credit. Think about filing for bankruptcy. Speak with a bankruptcy attorney. You owe it to yourself to explore all of your options.
Good luck.
Do debt consolidations work?
Myth: Debt consolidation saves interest, and you have one smaller payment.
Truth: Debt consolidation is dangerous because you treat only the symptom.
Debt consolidation is nothing more than a %26quot;con%26quot; because you think you%26#039;ve done something about the debt problem. The debt is still there, as are the habits that caused it - you just moved it! You can%26#039;t borrow your way out of debt. You can%26#039;t get out of a hole by digging out the bottom. True debt help is not quick or easy.
Larry Burkett, noted financial author, says debt is not the problem; it is the symptom. I feel debt is the symptom of overspending and undersaving. Our certified counselors will not recommend debt consolidation for a client. Why? Because debt consolidation doesn%26#039;t work.
Debt Consolidation Statistics
A friend of mine works for a debt consolidation firm whose internal statistics estimate that 78% of the time, after someone consolidates his credit card debt, the debt grows back. Why? He still doesn%26#039;t have a game plan to either pay cash or not buy at all. He also hasn%26#039;t saved for %26quot;unexpected events%26quot; which will also become debt.
Debt consolidation seems appealing because there is a lower interest rate on some of the debt and a lower payment. However, in almost every case we review, we find that the lower payment exists not because the rate is actually lower but because the term is extended. If you stay in debt longer, you get a lower payment, BUT if you stay in debt longer, you pay the lender more, which is why they are in the debt consolidation business.
Debt Consolidation Example
For example, let%26#039;s say you have $30,000 in unsecured debt, including a 2-year loan for $10,000 at 12%, and a 4-year loan for $20,000 at 10%. Your monthly payment on the $10,000 loan is $517 and $583 on the $20,000 loan, for a total payment of $1,100 per month. The debt consolidation company tells you they have been able to lower your payment to $640 per month and your interest rate to 9% by negotiating with your creditors and rolling the loans together into one. Sounds great, doesn%26#039;t it? Who wouldn%26#039;t want to pay $460 less per month in payments?
But they don%26#039;t tell you that it will now take you 6 years to pay off the loan. This may not sound that bad to you at first unless you realize how much more you will actually pay in additional payments. You will now pay $46,080 to pay off the new loan vs. $40,392 for the original loans, even with the lower interest rate of 9%. This means you paid $5,688 more for the %26quot;lower payment%26quot;. Not such a good deal after all. This example shows you why they are in the business - because they make money off of you.
Do debt consolidations work?
based upon your status,I believe you should find something useful here.http://debt-consolidation.featured-resou...
Do debt consolidations work?
Combination of various high interest loans into a single one, it is called debt consolidation. The aim behind debt consolidation is to reduce the payments or the interest rate. You make a single payment toward the loan instead many payments each month. This reduces your financial burden and you can have surplus cash left over. Credit counseling services offer debt consolidation loans. Check out the credentials of the credit counselor and find out if they are authorized by the government.
Opt for a debt consolidation loan: The easiest method of getting a debt consolidation loan is to utilize the equity of your home. Equity of your home is calculated and determined by the difference in the amount you have paid and the amount you owe. If the amount you have paid is more than the amount due, you can use it as collateral. This allows you to borrow money on lower interest rates. Besides, you also get tax benefit on this type of loan. Consult your tax advisor before opting for this loan.
http://debt-trap.com/category/Debt-Conso...
Do debt consolidations work?
Debt consolidation can work in many cases if there is no other way to get out of the debt. You can find some good information about how to become debt free at
http://www.mycashdiary.com
No comments:
Post a Comment