Debt Consolidation: Facts you must know

If you’ve piled up huge amount of debt and want to get rid of it, then you should opt for debt consolidation. Debt consolidation enables you to reduce your debt load. It condenses all of your unsecured debts into single monthly payments. Several banks and financial organizations offer debt consolidation loans to the consumers. These loans are of 2 types – secured and unsecured. If you want to qualify for secured loans, then you have to pledge collateral for it. But if you want to take out an unsecured loan, then you’re not required to pledge collateral. The interest rates of these loans are low. Therefore, you can easily afford to make the payments each month.

How to settle your debt

If you have piled up huge amount of debt, then you should take necessary steps to curb it as soon as possible. If you don’t reduce your debt load, then be sure that your credit score will fall. And if you have poor credit score, then lenders will reject your loan applications. But the question is how you will reduce your debt load. Well, you can reduce your debt load with the help of debt settlement program. A debt settlement program can lower your payoff amount by 40% to 60%. There are lots of companies that offer debt settlement program for a fee.

When you hire a debt settlement company, the representatives of the company open a trust account for you. In that trust account you are supposed to deposit money till you have accumulated 50% of the total debt amount. Once you have done that, the representatives of the settlement company will negotiate a lump sum with the creditors. You have sign a contract and pay off the amount.

Four Easy Debt Reduction Tips

I like to write about an array of personal finance topics, but my true passion is debt reduction.

Tip 1 -
Make credit card Related payments as early as possible. This also decrease your average balance also the total interest charges.

Tip 2 -
Try to Be both physical and emotional Strong. Debt reduction also need 3 things 1) money, 2 a great plan, and consistent dedication.Towards credit card Related payments formulate a great Goal to reduce your debt.

Tip 3 -
Stop now adding to further debt.Decreasing credit card amount by $550,only to charge $700 on if you contain other card will not make any sense.

Tip 4 -
Basically Focus on small principal amount.I also know we too can get fascinated by high interest and correctly so but the instant road to eliminate tour total debt is also is reduce the principal amount.I want to disburse my regular EMI, too much early in the payment cycle, and after then i will disburse the extra payment for entire the month. also I have verified with my creditors to make sure that I know how they handle the extra amount of payments.

2 Small Steps On Getting Rid of Debt burden Syndrome

Worry is now a short of tale in recent state of the economy and usually slow spirits of the American recent population.According to reports of job market,interest rates is rising ,and growing debt is also increasing which is great burden for Americans.Self battles,with trying to secure our family at the same time is also to think about and security of job.

Dr.Alan Manevitz,has said that the burden of security from foreclosure,credit card debt help,is going to the man who have the good profile,and want to escape ignoring creditors also it has been designed with so many individuals.High B.P,inflammation,asthma,and heart rate,muscle tension these are some of manifestations you may consider from your burden.

The solution for Debt burden Syndrome is a different fever which can not be solve by general medicine or capsule.Rather the cure formula to this burden lies fully with the individual affected.We can follow some suggestions from Dr. Manevitz which can help is given below:

1.Never ignore It

The initial step in facing this problem is accepting yourself that it contains the first positions.If you wast some security from foreclosure, that is facing more credit card debt ever, and are also avoiding the cell in worry that that a creditor will be on the other hand, you are possibly under
few sort.Try to succeed the debt issue and stress head on if possible.

2. You need To Proactive Also

Always do remember If you do not begin yourself to look for solutions to your positions,you might hardly get rid out from debt also the critical problems which comes along with it.Also You would be guided to know the fact that how bankruptcy might assist you in getting rid of huge debt.

Know how a collection agency can help you

This editorial provides knowledge regarding process of recovering your awaiting debts, just catch some the steps that have to be use and in what way a debt recovery agency be capable of helping you in debt.

There are several small and big business concerns for debt collection whereas huge business houses are liable to include their personal debt revival process and techniques, debt recovery division of their own purpose. Whereas small business holders who countenance the utmost difficulty. In these cases some of the small size business owners surrender the liability for a variety of dealings along with that sometimes simply since the hassles concerned. Despite the fact that it is factual that debt collected works does engage long time and huge energy, amazing that's barely for ever and a day available, it must be include that this isn't unerringly the accurate loom.

Also there so many government avenues where you can approach, to regulate requisite assistance for debt recovery, like a little Claims Court for illustration. Though the difficulty here is with the intention of you can cash money of simply a little value, to facilitate up to $ 3000. A superior option why could be in terms of a debt collection agency.

While the largest part of us think that hiring a debt collection agency occupy big dollar is not unavoidably factual. In actuality it possibly will be a money-making good deal for you particularly in cases where the amount of debt to be repaid is quite large. You should enquire the collection agency about their fees before you employ them. The Internet will give you a wide range of choices from which you can take your pick. Maximum time a debt collection bureau mechanism on no assortment no debt basis, this workings fine for everyone concerned.

In actuality some of the additional options may also you could discover through a debt collection bureau agency. These comprise also selling of your bad debts to the collection bureau agency a cost that's less that the authentic collectible. Many recovery agency in recent days may offer profitable offers for minute industry houses which only you might attempt out intended for size.

Debt collection bureau agency, just defined is a personal agency so as to have a own team of citizens who are proficient in debt collection. Debts through different idea while of way enduring by the money owing collected works Practices Act.

These collection agencies always work with without help while using their individual Techniques to attempt and understandable the debt. Such actions frequently engage the following Tips :

-Dispatching drafting of warning letters
- giving the legal notices (in extreme cases)
- planned the important meetings with the debtor with his creditor
- functioning on about the court settlement
- Negotiation with customers about his skill to reimburse back the debt

Sooner than you in fact reconcile in a meticulous debt recovery agency bureau, ask for their testimonial also the proof of their earlier settlements. Also find out and make sure that they contain sufficient understanding in the division of you or your business is positioned. Also you need to make sure that the recovery or collection agency you engage utilizes reasonable practices in this era while recovering the debt. This probably would keep you safe from needless difficulty if the client makes a decision to take legal action against you for needless irritation.

A debt recovery agency might be your easiest method of an untidy continuing recovery method, just try it once and ensure on your options whilst you be at it!

Pay off your debt to lead a peaceful life

Whenever a person is drowned knee-deep into the huge burden of unpaid debt (may be of bills, loans etc.), the thing he or she is badly in need of is an option……which can make his debt paid, and take him out of this ongoing anxiety and pressure. We know, that Debt consolidation programs offered by many companies have already gained enough fame and publicity as a useful means to pay off our debt. However, other options are also there in market…and they are as good as the 1st option at the task of managing the payment of your unpaid bills, and protecting your financial set up. I have worked a lot on different bill management options so far, putting my endeavour in finding out every possible option, and counting the total number…and as per my findings, there are total 5 options including debt consolidation, to help you for your debt elimination and set your life free.

A) When you have huge amount of different unpaid bills you are unable to pay off, a debt consolidation loan from a consolidation company can be just the required to help you out. This loan, actually, works as a fine, single replacement of your different bills. How? It consolidates your different unpaid bills and converts them into a single payment scheme……that means, your making just one payment actually pays off all your bills. According to the terms, the loan company gives you a convenient, affordable monthly payment scheme to pay back your company. What are the benefits of this? We already know…
1) it helps us to avoid bankruptcy
2) Does not leave a negative impact on our credit report & credit score
3) helps to chalk out our budget each month as the repayment amount is fixed each month
4) No need to deal with several creditors at a time.
5) Helps us get rid of harassing debt collection calls

B) This is a very useful option for consolidating the debt of only different due bills. In fact this option had specifically been made to meet the need of fixing the unpaid bill debt problem.The process is almost similar to that of loan consolidation. You approach to any bill consolidation firm, which then starts negotiating with your creditor to get your interest rate reduced. And, then all your due bills are consolidated and converted into a single monthly repayment scheme.

C) I think, we are already pretty aware of the usefulness of debt settlement, and perhaps some of us have already been through this process…..so I desire here just to remind you of this available option. This process works best to get your debt paid off whenever you are shouldering a huge amount amount of debt, and unable to pay the total amount. The settlement companies, who gives this service actually negotiate with your creditors to get your total due debt reduced….at least by 40%-60%.....thus your total payable amount is settled at an amount pretty less than original amount. Pay that, and you are fee from debt!!

D) Bankruptcy is always an option to take you out of your debt. But frankly speaking, it is not very preferred, or recommended one. Rather as a man of finance world I would tell my readers not to go for a bankruptcy filling, because a single bankruptcy may be enough to disrupt you credit profile, or to leave a permanent negative impact on it. However as a consumer, you may file either Chapter 7 or Chapter 13 bankruptcy. Actually it depends upon what type suits you and which one you are going to qualify for.

E) You can manage the payment of all your bills, and pay them off even without any professional debt assistance. Sounds tough, especially under the post recession financial situation, but trust me it is possible. But to do that…1st you need to become an efficient manager of your own finance and monthly expenditure. You need to analyse your true financial set up and capacity, and based on that need to prepare your own monthly budget. Then stick to that, and follow a repayment plan accordingly. I myself have done it!!

Payday loan consolidation: kick off your payday loan debt

Proper consolidation of your taken payday loan, no doubt, is an ideal solution to being debt-stricken and a good way to get out of your payday loan debt burden. Many people, who take pay day loan and can not timely repay it, consider this option now a days. This is mainly a process of consolidation of your several unpaid bills/loans into a single monthly repayment scheme, where the payment is to be made at a lower rate of interest. Negotiation starts for getting a lower interest rate on your debt, and practically you are merging more than one debt to one payable loan .

The types of consolidation
Basically, 2 kinds of payday loan consolidation programs are normally offered. Precisely, those are as following:
1. Consolidation loan: Under this program, the loan consolidator firm you have appointed would offer you a loan for using the amount to clear all your payday loans with the creditors. You can repay more than one payday loans. After you do so, you need to pay off the consolidation loan in individual monthly installments.

2. Payday loan consolidation: Under this program, your payday loan consolidator firm hired by you would negotiate with your payday creditors for reduction of the rate on your loan debt and getting you a lower interest rate. This would be done to lower the amount of payments you owe to an amount within your affordability. The company will then take just that single monthly total repayment from you…..and that’s it, your unpaid debts are paid off now and you are free from payday loan debt!! Normally, the due amounts are reduced in case you missed any payment. This process is just similar to a debt consolidation program.

Comparing the benefits and demerits of both options, in 2nd option, one has to pay much higher interest rate while paying back for the consolidation loan taken from the company. And, as a whole on total amount of payment also you are paying much more due to higher interest. Besides, the payment term is quite long. Therefore, in my opinion, a payday loan consolidation program is a much better option compared to consolidation loan.

Advantages of loan consolidation-the 2nd option
1. Affordable monthly payments….payment within one’s capacity.
2. Easy process of paying off the debt with different lenders just at one shot…..no need to manage different creditors and different payments.
3. Reduced interest rates.
4. Just a payment each month…the amount is fixed, too. Therefore, planning the total monthly expenditure on different items and budgeting becomes simpler.
5. No late fees or over limit charges.
6. You can avoid creditor or collection calls.
7. Proper payment of your debts, definitely throws a positive impact on your credit report and credit profile.

A few essential steps to live a debt free life

Proper and timely financial planning is the secret to a life free from debt. You have to maintain a strict money management policy and develop the habit of saving your money. We all know very well that proper and efficient management of wealth raises your money investment potential. At the same time, it increases your financial security, stability and reduces your chances of being overburdened with debt due to failure to repay your loans and bills. The best way to avoid the loads of unpaid credit and live a debt-free life is to understand the difference between desires and necessities (or wants). Our desires do not always develop in accordance with our financial condition; they do often outnumber or outweigh our true affordability, and we end up spending a lot more than our fixed budget. That means the amount of money we owe others also increases. We all, therefore, should try and develop this habit of saving our hard-earned money during the summer time, in anticipation of a bitter forthcoming winter. You should buy only what is necessary and should avoid impulsive shopping. A healthy habit of saving money should follow the ant model.
Here I would like to share with you all a comprehensive set of practical suggestions which shall save you from living a debt-stricken life and help you live tension freely.

• Proper Budgeting
Make a proper and systematic plan of your monthly income and your expenditure per month. This is essential to properly organize and categorize your finances. Chalking out a monthly budget helps to avoid unwanted loads of debt. This way, you will have a ready reference of your financial position, and a picture of your true affordability.

• Savings
Controlled spending and proper saving of money is a practical and old method of strengthening your overall financial condition and creation of wealth, used for a long period of time. As the old saying goes, a penny saved is equivalent to a penny earned. Savings allow you to look forward to a safe and stable future. Even if some financial emergencies and other unfavorable situations arise, these can be tackled successfully with a strong savings, which indicates that you will not need to carry a burden of debt to be paid back once that financial crisis is over. Your savings would help you stay away from taking loans.

• Search for utility gifts
Giving decent, valuable and meaningful gifts to near and dear ones on different occasions bears a good social response and conveys positive and nice attitude. But we need to pick up things for gifting which best suits our pocket. Means we should not get carried away by the urge to give costly gifts, and spend on gifting beyond our affordability. Remember: the depths of your feelings are not judged by the price tags of your gifts. You must take care to develop a habit to evaluate the utility value of the gifts, rather than their price tag.

• Control your spending
Try and develop the wise habit to restrict your expenses on various occasions within your financial capacity. Unbridled spending is the most risky way for your finance…it may anytime invite debt in your life. Prepare a shopping list of the necessary articles before you go to shop. Also, inside the shop, buy the things which you only need. Then step out as quickly as possible. Try to spend the minimum possible time inside the shop.

• Check your credit card use
Everybody knows that credit cards are the perfect ways of being caught into trap of debt burden in near future. So we should not use more than one credit card under any circumstances. It is a better option to shop with cash money. That helps actually to keep a constant track of your spending and restrict your expenses time to time, if necessary.

• Festive season warning
The festive season brings the requirement for socialization and entertaining people. While you entertain people at home, try to avoid wastage of food at any cost. You have to make sure that the menu is prepared beforehand. Festivals like Christmas, New Years Eve etc. involve a lot of expenses. Make sure you have advanced planning for such expenditure.

Debt-to-Income ratio: Way to show how much u should owe

While planning to take any kind of loan for any purpose ( may be for-a new home, a new car etc.), one must keep in mind his /her true financial condition at that time and should act accordingly. Before applying for any kind of credit, a man or woman-no matter if he/she is into service or business, should first consider and calculate the highest loan amount the person is capable to repay in time-i.e., estimation of the capacity to pay off a loan is essential considering all other areas he/she simultaneously needs to spend money on.


Debt to income ratio (DTI) is an easy yet useful way of determining the net percentage of your total income per month that is available for making repayment of your pending debts.....
This ratio is of great importance to the creditors to judge your creditworthiness and your true financial capacity of repaying loans.Debt-To-Income ratio often plays a vital role when you want to go for a home purchase.

Calculation of debt income ratio is very easy.
There are two ways by which you can calculate this ratio: First one is called the Front-end ratio and second one is Back-end ratio.

Debt to Income ratio = Total monthly debt / Total gross monthly income

Front End Ratio = Monthly housing / Monthly income

There are another easier way to calculate your accurate Debt Income ratio. This calculation process includes all your pending debts like credit cards payments, mortgage, car loans, insurance premium, etc. and them divides this total monthly debt amount with your monthly gross income:

Back End Ratio = (Monthly debt amount / Gross monthly income) * 100

To calculate total debt amount for a particular month, you MUST NOT include monthly expenses on entertainment, grocery, food and other utilities.
Items to be considered for determining Total Monthly Debt :
• Monthly Mortgage payments or Rent Monthly Home Equity Line of Credit or Loan
• Monthly Car Payment
• Monthly Credit Cards payments
• Monthly Student Loan payments
• Monthly Child Support payments
• Other Monthly Loan amount

Items included in Total Monthly Gross Income :
1. Monthly Net (take-home) Salary
2. Annual Bonus and Overtime, divided by 12
3. Other Annual Income, divided by 12
A debt to income ratio equal to or below 28% speaks for a healthy and reliable financial condition. If the ratio stays between 28% and 36% for any person, then at this point he may be considered as financially fit, but at the same time he or she needs to keep a check on the amount of debt. Any value of the ratio above 36% raises an alarm of unstable, trembling financial condition for that person. It clearly expresses the person’s poor loan repayment capacity.


How to Improve your Debt Income ratio ?
• Figure out areas where you can cut some expenses: Chalk out your monthly budget at the month’s starting as soon as you get the income in your hand-make it a priority task to get a clear picture of your expense and pending debt situation.Once you have planned your budget for the month, sit down and figure out all those fields where u can bring about some reduction in your monthly expenses. Act accordingly, strictly follow your own-made financial expense plan, cut down on your expenses in those areas and put the money that you have saved to pay off the debt with highest interest rate like credit cards.
• Visit an advisor:
If your ratio is still not improving then don’t hesitate is seeing an expert financial advisor, like- a debt management professional, monthly budget and debt planning counselor etc. Just have some good financial counseling that will help you manage your debts in a smarter and efficient way, save you from ending up becoming debt-stricken and show you the way to a debt-free life in turn.
• Set yourself free from credit card debts:
Experts say try and start doubling your credit cards payments so that you start improving your debt to income ratio. If credit cards are not your problems then pay for any other debts as long as there are no prepayment penalties.
• Fund for emergency purpose:
Try and build an emergency monetary resource , so that you can come out of some kind of financial problems in future or have a nice vacation without falling back in credit cards debt.