For starters, you might want to know what debt solutions are available.

A debt consolidation loan may be what you need. This type of debt solution gives you the option of consolidating your numerous debts into a single, more manageable loan. You can also take advantage of lower interest rates and lower monthly payments by using secured loans.

Secured loans, usually in the form of home equity loans, home equity lines of credit and remortgages, are a type of loan where you use a valuable real estate as collateral or a form of security against your loan. This makes the lender more generous in terms of interest rates and monthly payments since there is less risk on their part.

If in case you are suffering from a bad credit rating, either because of current financial issues or a bad credit history, a bad credit debt consolidation loan may be the debt solution for you. There are lenders specializing on cases like yours. You might want to look into bad credit remortgaging. This is a variation of the popular remortgaging designed for people with bad credit ratings. It is advised that you go to a specialist bad credit mortgage lender instead of mainstream high street type lenders, for they are likely to reject you. Every rejection you get will be recorded in your credit ratings and can further injure it.

If refinancing does not seem a good debt solution for you, you might want to look into debt management. Negotiating with your current debtors may be a more attractive option for you. You can lay down the facts—that is the dollars you have left after living costs and monthly outgoings are covered, to your creditors. This is to give the creditors a picture of what you can afford. Some creditors will consider the option of adjusting to your means. They may consider this arrangement better than delinquent payments. Debt management arrangements are done through informal transactions and there is more possibility that the creditors will deny your offers. It will be helpful to approach professional debt managers. They can help you argue your case.

Whatever your case may be, there are ways by which you can free yourself from the stress brought about by your mounting debts. The key is to be well-informed. There are a lot of resources available in the Internet for your perusal. Don’t be a bum and act now.

What is a Debt Consolidation Loan? In layman’s term, a Debt Consolidation Loan is a type of loan a borrower uses to pay all his other debts resulting to a single more manageable monthly payment.  This usually comes in the form of secured loans wherein you use a valuable asset as collateral against your loan. The most popular forms of secured loans are home equity loans and home equity lines of credit. In these types of loan, residential houses serve as security against the loan.

These assets become subject to foreclosure. Because the lenders hold a lien or a legal claim on valuable assets, they have the luxury of offering lower interest rates and more manageable monthly payments. Borrowers have to be aware though that lower monthly payments or a lower interest rate may mean a longer credit term, or the number of years the borrower will be paying for the loan. This amounts to greater long term costs. Plus, there is the danger of losing you home which may well be your most valuable asset.

In a nutshell, debt consolidation loans offer the following advantages: you will be dealing with only one monthly payment and only one interest rate; this interest rate is usually lower than most unsecured loans such as your credit card loans; lower interest rates give way to lower, more manageable monthly payments which may be the short-term solution to your debt problems; this short term solution may, in turn, result to a long term debt solution, given that you are faithful in your monthly payments.

Refinancing from second mortgages such as home equity loans and home equity lines of credit has been proven to improve bad credit ratings. To top it all is the added advantage of a tax deductible interest. Unlike credit card loans, interests paid to mortgages are written off the taxes.

You have to keep in mind though that you went into a debt consolidation loan to make your debts more manageable, and in the process even save some money. If in any case, your debt consolidation loan successfully gives you your most coveted financial freedom; make sure that you don’t go back to your old ways. Manage your expenses well so that your debts do not go into uncontrollable heights again.

What you are about to read will shock many people and will be information that the professional debt companies do not want you to know! This is my story of my experiences of how I was able to negotiate a reduction in my overall debt by just over 50% without having to pay a cent to any professional debt settlement company!

My troubles began just over about 5 years ago. I got myself in some pretty serious debt problems. It wasn’t that I was being overly stupid about my finances it was just that I truly believed that I would be able to pay for my purchases because I was making good money. Well the fact is, I was making good money and would have been able to handle the purchases had I not run into some unexpected financial burdens including an injury that I sustained which meant that I had to take a lesser job that paid less than half what I was making. Yes, I was smart enough to have some insurance that helped cover some of the medical expenses but the insurance policy only paid a nominal wage and did not take into account the commissions I was making on my sales job. Soon it got to the stage where I was just making minimum payments on my 5 credit cards, three of which were maxed out. I also had to sell my car as I wasn’t able to make the lease payments any longer and since it was only the second year of a 5 year lease, I didn’t get as much on the sale as I owed the finance company. I had to take out a personal loan to cover the difference.

It wasn’t long before I started not being able to make the minimum payments. I was able to borrow some money from some relatives to help whilst my injury healed but I’m not the kind of guy to want to burden my family and so was committed to take care of things myself. It soon got to the stage where I knew I was in serious trouble. The interest and late fees on my cards were adding up and I started getting some nasty calls from the credit card companies as well as the bank about my personal loan. I tried to take out another loan to cover the credit cards but I was rejected by every bank I went to. They didn’t seem to even care that I was making good money at one stage, they just looked at the fact that I was struggling with debt at that moment and said no.

After selling a bunch of stuff on eBay, which helped for a couple of months, I had no where else to go. I knew that I had to look at some other way to help myself. I started looking at my options with my worst fear being that I would have to file for bankruptcy. I was determined not to go down this path as I knew this would impact me in the long run. I conducted some research on the internet and found a big range of options including debt consolidation, debt settlement, debt reduction plans and so on. There was also a huge range of different professional companies offering their services to help me with my debt problems. All the companies announced loud and clear that debt wasn’t something that an individual could get out of by themselves, and that I needed to use their services in order to get real debt help. So I researched a few companies and chose one that was in my area that claimed that they could give me a written guarantee of what they could do for me. They stated that they would reduce my monthly interest rates and would reduce my overall debt by up to 70%. I thought wow, that would be great, and so sought their advice. I met with a certified debt consultant and went through my sordid details. At the time my debt overall debt had grown to a shocking $86,675! After a week or so, the consultant came back to me with some advice and told me that I had reached a stage where the only option was a program of debt settlement or debt negotation, whereby the agency would act on my behalf and negotiate with my credit card companies and bank to reduce my loan and reduce my interest rates.

They said that I would then pay the agency one amount each month and they would then distribute that amount to the various creditors. I asked the consultant whether or not I could do this myself without having to engage the services of the company. The consultant basically told me no – stating that it would be a waste of time as credit card companies and banks did not want to deal with the individual – that they didn’t trust an individual as they were a risk and that their agency knew what to say to get me the best deal. I thought to myself, that’s odd, what great power do these companies really have? I then enquired about the charges and they advised me that it would be a percentage of what they are able to save me plus an initial set up charge and some ongoing administration charges. I did the calculation and the total amount it would cost me would be somewhere around the $10,000 mark. I thought that this was a bit excessive so I decided to look at other options. Surely there was something that I could do by myself that would have some impact on my situation.

After searching around the internet I stumbled upon a program that guaranteed that I would save thousands of dollars with creditors by negotiating with them myself or I would get my money back in full. The program would cost me about $400 and I would also receive coaching from an expert. I thought to myself $400 versus $10,000 & with a money back guarantee, what do I have to lose.

I’m not going to go into great deal about what that program is about as its actually copyrighted so I will just tell you briefly that debt settlement is essentially like good old fashion haggling with your creditors. Just like you may haggle with a 2nd hand car dealer to give you a better price, you can haggle with your creditors to reduce your debt. At the end of the day, creditors know that bankruptcy has become an “easy” option for many consumers in serious debt. And they know that this means they can kiss their money good bye. So they would rather negotiate with you for a lower amount if they get some sort of level of confidence that they will get this money. What I learnt from this program was how the collection process works and therefore the right time to put through your settlement offers. I also got to understand what creditors would settle for and I worked hard to get the maximum reduction. The creditors will want you to sign some documents and they will hit you with a settlement letter. The program gave me some professional advice about what was in the letters and showed me how to even negotiate these. At the end of the day, I was able to dig my heels in with some of my creditors and was really surprised when they accepted an amount that was just over 50% of what I owed them in total.

Some words of warning before you think to do this yourselves. The process is not a pleasant one and creditors can become very nasty especially when they turn their debt over to a collection agency. The process is fraught with emotions and can get your blood pressure levels up! The collection agencies try to catch you out with their tactics as they are motivated to try to get the very most out of you. You need to be the type of person that can stay focussed on your goal to reduce your debt and it helps to have the coaching advice of an expert to help you.

At the end of the day, if you think you can do this, you can save yourself a lot of money both from not having to engage a professional debt company, as well as reduce your overall debt. The happy ending to my story is that I am now back in control of my debt. It is down to manageable levels and I am now in the process of repairing my credit report (which is a very important step in the process).

For more information about the above debt settlement program and other possible debt solutions, visit Debt Solutions Portal.

About the Author
Colin Lim has a rich background in sales, marketing and finance.

It is a boon for people who are:

1. dead-beat of paying a number of payments every month and wishing to combine all of it into a single payment,
2. having problems in maintaining an up to date payments of loans,
3. paying different interest rates,
4. longing to trim down their expenses for debt repayment,
5. exploring possible ways to be free from debt through easier payment terms, and
6. on the brink of bankruptcy.

While at one glance debt consolidation loan is the perfect choice for these people for its convenience in paying off certain debts, this remedy is not a quick fix for debtors. As you probe deeper into the system, there are some dangers lurking behind which should be looked into.

One should be extra cautious in applying for debt consolidation loans because period of payments are surely got to be longer than expected or additional years of paying interest rates. Though consolidating debts may give a feeling of erasing some debts in favor of a major one, this should not entice one to do so. Believing in this notion, a lot of people become more indebted after applying for debt consolidation loans.

Hence, when push comes to a shove and the only solution is applying for a debt consolidation loan, one should be wise enough to examine the cost of the latest loan because it is basically lesser than the current amount you pay to your creditors. Being knee-deep in your debts, it is impossible to avail or be offered of very low interest rate on a new loan especially if there is not a home to serve as an equity. The most that a lender could do is to jack up the charge.

Discipline and good sense are required before taking this big leap. Everything comes in handy to you the moment you turn into debt consolidation loan with the ubiquitous credit companies offering affordable and down-to-earth interest rates. Take time out to compute the interest and fees of all your present accounts to find out the sum of all the expenditures for your debt. Match it up to the consolidation loan to double-check the figures and finally decide which is the best to minimize your debts.

Though difficult to believe now, at one time many years ago credit cards were a luxury, owned and flashed around only by the rich and famous or businessmen on a magnanimous expense account. (Years later the same flaunting by the same beautiful people was to be made with mobile phones – strapped conspicuously to the belt remember?).

Be that as it may, nowadays both these accoutrements are no
longer luxuries; in fact they have become necessities of daily
living. And along with them – or at least with credit cards -
has come a rather nasty little problem, to whit ‘credit card
debt’. If we are not too careful it tends to steal up on us
unawares, to make itself painfully obvious on a regular monthly
basis.

What is it and whence does it come? To answer this we need to
know what happens behind the scenes, behind the counter of the
bank or card provider. Your credit card merely represents the
account you have with the bank or supplier. Whenever you use it
to buy that latest laptop or pay for an expensive dinner or
whatever you are actually borrowing that money from the bank and
the bank will remind you of these payments, or borrowings, at
the end of the month. The chickens – as chickens are wont to do
- have come home to roost.

And these payments, aka borrowings, are what contributes to your
credit card debt. Quite simple isn’t it. Not exactly rocket
science although if you let things slide it might need rocket
science to get the situation back on the right track. But of
course you will not let that happen will you? You may not but
thousands do though. And therein lies the scourge of the
ubiquitous credit card.

So, you pay the amount on your monthly statement by the due date
and you pay no interest. However, if you have been a bit
careless with your spending during the month, you may not be
able to pay the amount so you will incur a late fee and lefty
interest charges. Or you may be able to pay a little of this
debt. That’s better than nothing – the bank will not charge a
late fee, just the interest on what has not been paid off.

So far so good. Some left still to pay, with interest accruing,
at the end of the next month. When, oh dear, a bad month, a bit
short again so you can only pay part of the debt again. And the
next month – only part of it again…

So your credit card debit, like Topsy, grows. And grows .If you
continue making partial payments (or no payments at all) the
interest charges are calculated afresh on the new credit card
debt. So you end up paying interest on the last month’s interest
too.

A nasty looking circle is forming, made even nastier by the
extortionate interest rates that are charged on credit cards.
This interest is far greater than the interest on most other
loans that the bank may make Thus your credit card debt
accumulates rapidly and soon you find that what was once a
relatively small credit card debt has ballooned into a large
amount which you might very well find almost impossible to pay.

Further, if you don’t still control your spending habits, your
credit card debt rises even faster. This is how the vicious
circle of credit card debt works.

The moral is obvious isn’t it? Cut your spending, leave your
card at home and go back to using that old fashioned green paper
stuff

Though difficult to believe now, at one time many years ago credit cards were

About the author:
Michael Perrin
www.felicitasio.com (loosely translated as ‘Oh frabjous day’) for more musings on the ubiquitous credit card and gateway to the ‘Credit Secrets Bible”

Debt is no stranger to most Americans. Credit is becoming easier to obtain and people are charging well beyond their means and at interest rates reaching 20% or more. While “debt” is a scary word that usually is seen in a negative light, not all debt is bad. You can actually make intelligent decisions and use debt as a vehicle for building personal wealth.

Being intelligent with money and making good choices means you need to understand the difference between good debt and bad debt. Consider purchases “bad” that immediately lose their value as soon as you purchase it, or a purchase that has no potential to increase in value. Those are bad debts!

There are many times when it’s almost impossible to avoid bad debt completely. For example, if you need a new vehicle, you may need to obtain financing. A car loan is actually considered a bad debt, because once you drive it off the show room floor, it loses some of it’s value; and the car will continue to lose value every day that you drive it. If you’re unable to pay cash for a car, then you have little other options when it comes time to get another vehicle.

What about credit cards and store credit? Plastic money can be extremely tempting, with promotional offers for low or no interest repayment options and the ability to make smaller payments on a larger purchase when the money is tight. If used widely, many credit cards can actually help people leverage their spending power and their wealth. Unfortunately, most people aren’t always able to pay off their credit card balance in full each month, and the resulting interest charges from carrying a balance from one month to the next are often quite staggering.

For people who fall for the store credit promotional offers- the ability to save 10, 15 or even 20% off the current day’s order is tempting enough for most people to open a new store credit account. The problem with store credit offers and discounts like these is that if you miss a payment or carry the balance to the following month, often the interest rate is charged at a higher
rate than the amount of money you will save on the purchase.

While most people can understand the downfalls of bad debt, many may be confused to learn that there is actually debt that is considered “good”. Any debt that is actually an “investment debt” and has the potential to create value is considered a good use of your debt. For example, real estate loans are usually good debts because the land and/or building can increase in value. Student loans are considered good debt because you are investing in the probability of obtaining a higher paid job once you graduate college.

Other debt that is considered a good choice is debts that are tax-deductible and have the potential to generate wealth over the long term. If you use a tax-deductible, home equity loan with a fixed, 6 or 7% interest in order to pay for a high interest credit card, your new debt is a good choice. Unless you are independently wealthy, it’s almost impossible to avoid all types of financing and debt throughout your lifetime. In order to keep it under control however, you should limit the amount of “bad” debts you acquire and try to maximize your debt by financing your purchases with as much “good” debt as possible.

About the author:
Destroy Debt has the advice and resources you need on debt consolidation and other financial topics.

There are many loan options open to those who want to refinance
their current home loans. You may find yourself faced with the
option of an ARM (adjustable rate mortgage) or a fixed rate
loan. Which type you will choose depends on your personal
sitation and the expectations you have for your refinanced
mortgage.

A fixed interest rate mortgage is just what it sounds like. This
type of home loan has a set, unchanging interest rate for the
entire term of the loan. Should you refinance your loan over a
term of thirty years, the interest rates will not fluctuate over
that thirty years unless you once again refinance. Other fixed
rate mortgages may run for only a set number of years (perhaps
one to ten years). After this, they become adjustable rate
mortgages.

A fixed rate mortgage differs from an ARM in that the adjustable
rate mortgage has an interest rate which fluctuates, depending
on the state of the current market and financial trends. This
means that the monthly payments on an ARM loans are subject to
change. When the prevailing interest rate increases, so does the
monthly payment on your ARM.

Borrowers seeking stability in their loan are most likely to
benefit from a fixed interest rate mortgage. Those with good
credit ratings will always be offered reasonable interest rates
and terms on their loans. Those who have a stable, long-term
career and want to be able to budget over the long term will
choose a fixed rate loan over an ARM. The ARM might have a lower
initial rate, but that rate is subject to change depending on
the current market.

A fixed rate mortgage loan is among the safest type of loan you
can take. From the very beginning, you know that you will be
paying an amount which does not change over the term of the

loan. This allows for more accurate budgeting, and no sudden
suprises. Among the problems that one might encounter with a
fixed interest rate mortgage loan is the deffence between
various interest rate. The fixed rate mortgage will always carry
a higher interest rate than a similar adjustable rate loan. Bad
credit histories prevent lenders from offering lower rates, and
will increase the interest rates of loans available to you. This
fact causes many to choose an adjustable rate mortgage over the
fixed rate loan.

It is also wise to keep in mind that interest rates do sometimes
drop dramatically. When this happens, people with a fixed rate
loan can find themselves paying a much higher rate than others
with adjustable rate mortgages. This is the biggest risk of a
fixed interest rate mortgage loan. Other than this one risk,
fixed interest rate refinancing has few risks, and provides long
term stability to borrowers who use it.

About the author:
Joshua Suffie is the expert behind the refinancing website
Refinancing Right. Get one up one the mortgage brokers. Our mortgage refinance information will make sure you get the best deal possible.

When it comes to seeking debt relief, many Americans feel the only viable option they have is credit counseling or filing bankruptcy. What many people are not aware of is the little known process of debt settlement. The goal of debt settlement is too, one satisfy your creditors for less than what they claim you owe and two save you as much money as possible during the
process.

One reason many people choose a debt settlement company is because their debt amounts are too high for them to realistically manage to payback in full and want to avoid bankruptcy. Another reason why thousands of Americans choose a debt settlement company is because they are extremely upset and
fed up with the credit card company over the fact that their interest rate has increased to an unfair high rate like 28 – 30% and the company refuses to lower it no matter how much you plead. But the number one reason why Americans choose a debt settlement company is because their desire to have closure on being in debt and their priority of becoming debt free becomes
their number one goal and it outweighs any real or perceived thought of any negative impact that it could have on their credit history while going through the process of debt settlement.

According to the Fair Isaac Company your debt to credit limit ratio accounts for more than 30% of your score, so it becomes absolutely essential to eliminate your debt first when you are trying to improve your credit score. Also remember your credit report is only a snapshot in time and is never a permanent record, you can recover and improve your credit score over time.
Everyone gets a second chance in America!

The banks would love to keep you in the mind set that your credit score is absolutely the most important part of your life and by not paying them back in full would decrease your score and put you in the gutter forever. By all means your credit is important but should not completely dominate your life. This mentality works in the banks behalf and keeps you in fear, just where they want you.

But think about it, if the banks where really were concerned about you and your credit score then why would they extend you more credit on your current credit card so you can charge more when they know that this will decrease your score. So do they really care, NO.

When researching the option of debt settlement as your choice to become debt free understand that there are basically two types of companies to use when considering who you will choose to settle your debts. First there are the very common non-lawyer based debt settlement companies which comprise of over 95% of the companies currently advertising over the internet and TV. The rest are law firms that practice debt settlement as one of their services.

In the rest of this article I am going to list some of the ajor important points that you need to consider when choosing a debt settlement company to help you become debt free. As well as give you a warning sign for each point when speaking with the representative of a debt settlement company.

1. The company should save you at least 40% of your debt including fees and paying your creditors.

You can usually save 20% on your own with very little effort but any more than that requires experience and negotiating savvy.

Warning Sign: When you are speaking to the representative from any debt settlement company you need to be cautious and do your homework. There are many debt settlement companies that just want to make as much money as possible without any real regard for the clients best interest. A lot of these representatives will say just about anything that pleases you to enroll you in their program. One way to recognize this type of company is by the tactic of setting a monthly payment amount to whatever the client wants. Usually very low and for a much longer period of time than what other reputable companies offer.

This defeats the purpose of their claim of saving huge amounts of money because the interest keeps growing and the consumer does not realize that the longer the payback plan time frame the less they save.

Most Americans are getting caught in the magic bullet or quick fix syndrome, which these unscrupulous companies’ operators understand all to well and sign up tens of thousands of trusting people each year. If the representative is saying that they will save you over 60-70% of your debt be wary, at first it might sound great but verify what the overall cost is before signing on. Once they add on their fee and include your payback to your creditors it will be a lot less and they never mention this.

Make sure to ask the representative if their claim of high savings for you is also including the companies fee.

2. Make sure your payback plan is in a realistic time frame to complete this process.

The major benefit of debt settlement is to become debt free in a very short period of time verses paying minimum payments to the credit card company which averages over 38 years to pay back.

You should choose a debt settlement company that will focus and emphasize on enrolling you to becoming debt free in two years or less, but only under specific circumstances no longer than three years.

Warning Sign: By stretching a debt settlement payback plan farther than three years you’ll never receive the full benefits that you were told in the beginning. Why, because of accruing interest. In other words the percentage of money your saving on the original debt decreases drastically when you
enroll in a program that has you paying for four or five years because the debt amount drastically increases.

3. Make sure the collections calls will be stopped.

One of the negative aspects of debt settlement is that you do need to fall behind in order for these creditors to be willing to accept less. While falling behind you will get barraged with calls from collection agencies. Simply put these can be very annoying, scary, embarrassing, and aggravating. Now when it comes to preventing collection calls from 3rd party collectors, only by retaining a lawyer to represent you will stop them from calling. The Fair Debt Collection Practices Act states that if a client has attorney representation the 3rd party collector by law must deal with the attorney and not the debtor. Once the collector has been notified but continues too contact you directly then the collector becomes subject to a potential law
suit.

Warning Sign: If a representative from a non-attorney based debt settlement company tells that they can stop the collections calls ask them how and why the collector has to abide by what the debt settlement company claims. By law the collector does not have to deal with them. Typically their advise is to send a cease and desist letter, this can stir up a hornets nest. While this may stop the calls it will leave the collector no other option of contacting you to collecting the debt. So if they wish to continue to pursue with their collection attempts they will have to serve you papers to appear in court. Meaning that you will be sued.

4. Make sure the company is reputable.

A good place to start is to check the Better Business Bureau (BBB). Next thing to consider is how long the company has been in business. A general rule of thumb is to look for a company to have been in business for over 10 years. Thus ensuring that they know what they are doing and have settled many people’s debts in the past. What the scam operations do is open up as ABC company put through hundreds of people on their program that they know are not qualified for debt settlement just to take fees. Once they have these people complaining about not doing the right job they close down and start up somewhere else brand new as XYZ company. So if the company is brand new within a year or two that may raise a red flag and should be a major concern.

When it comes to law firms you have an extra layer of protection, the bar association. Check the state bar for the attorneys standing if you are going with a law firm. The attorneys are held to a higher standard by being a member of the bar association. With unanswered complaints to the bar an
attorney can lose his/her license and business. The attorney cannot get another law license and just open up somewhere else. So it is in their best interest to do the best job for the client.

Warning Sign: This is pretty obvious, if a company has an unsatisfactory record with the BBB and is not a member it would be best to stay away. If a law firm is not in good standing with the bar in other words under investigation, then stay away. If the company is relatively new and is showing some of the warning signs mentioned above, definitely stay away.

While debt settlement can be a very smart and viable option for many you need to be very cautious about the organization you are employing. By following the points and warning signs above you will greatly reduce the risk of being enrolled into a program that will not benefit you.

About the author:
Steve Bis is a senior debt analyst and research assistant with
the USCA/Roll Law Firm which practices primarily in debt settlement.