Debt Consolidation
The Credit CARD Act Opens For Business
i owe on a car, student loans, and some medical bills.... ive seen these debt consolidation adds on tv, and dont know how they really work, or if theyre even a good idea... can any share some insight?
bad idea -- don't do it
first off, they don't work for student loans. You will pay that money back in full one way or another...even if it takes the rest of your life. Also, since the car is secured debt...you might have issues with that as well. In order for most of these companies to work, you must be near the point of default, show that you have no means to pay these debts off, and that you are near bankruptcy. You are trading a lower payment for 7.5 years of ruined credit. The ads you see on TV are mostly scams. The only legit debt consolidation companies are mainly non-profits and will NEVER charge you an up front fee.
Run, and run away as fast as you can. Some of these are debt negotiation and settlement companies. They will line their pockets with your thousands of dollars and allow your bills to go unpaid. This is to make the creditors nervous to setttle - in reality it rarely works and you end up in court anyway being sued and your wages garnished. Horrendous reviews on every single company that does this - every single one ! You can do this yourself: Get a book on Debt and Credit Reapair from your library or bookstore. These books are a god send. They will teach you how to settle, negotiate, reduce payments, etc on your own like a PRO. No need to pay anyone for this simple information that is all clearly in books that are easy to understand. Go get a book or two and spend 2 or 3 hours reading. It will change your life - the tricks and tips are all there You can do a pay on delete on medical bills upon your request. The item will be deleted upon your payment - the steps are in the book...
I myself have quite a bit of debt and have checked into some of the debt consolidation and majority of them want a lump sum of money down before they will help u. So if u are like me and live pay check to pay check it is kind of hard to get the help.
Many of the debt consolidation commercials you see on TV are primarily for unsecured debt. This typically consists of credit cards, unsecured personal loans, or medical bills. With respect to student loans your best bet would be to contact your lender and ask what options may be available to consolidate your loans. With the crisis of the financial markets there are not many banks that lend to consolidate student loans anymore. Regarding your auto loan you don't have many options either. You can continue making the monthly payments until you pay it off. Or you can refinance the loan to see if you get a lower monthly payment and lower interest rate. In a worst case scenario, if you can no longer afford the monthly payments you can voluntarily surrender the vehicle. However, voluntarily surrendering your vehicle can have a severely negative affect on your credit rating. If you have a substantial amount of unsecured debt that you are trying to pay off you may want to look into the two options mentioned below. Credit Counseling A Consumer Credit Counseling Service (CCCS), is one specific type of debt management plan. It is a very common form of debt consolidation. There are many companies offering credit counseling programs. In a CCCS program, you make one payment to the CCCS firm and they then distribute that payment to your various creditors. CCCS firms negotiate lower interest rates with your creditors. By obtaining interest rate concessions from your lenders or creditors, more of the payment you make each month goes to the principle balance, thereby speeding up the time it takes to become debt free. Because the program lowers interest rates, it less effective for someone whose interest rates are already low. It is important to understand that in a credit counseling program, you are still repaying 100% of your debts, plus some interest. Often, in Consumer Credit Counseling program, the size of the payment is not significantly lower than your current monthly minimum payments you are sending to your creditors. This means that if you are having trouble making your current payment, a CCCS program may not be right for you. The program demands that you make a timely payment each month. If not, you could end dropping out of the program without having resolved the debt problem. Although there are no precise figures available, a high percentage of people who enroll in a CCCS program drop out. On average, most credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan does show up on your credit report and affects your credit rating. Unfortunately, many lenders look at enrollment in CCCS program as akin to filing for Chapter 13 Bankruptcy; in both cases you needed the assistance of an outside firm to re-organize your debts. Debt Settlement Debt settlement, also called debt negotiation, is a form of debt consolidation that reduces your total debt. Savings can be as much as 50% and debt settlement programs will significantly reduce your monthly payments. Debt settlement programs are geared for people who have a financial hardship that makes it so they either cannot pay their bills or are about to start falling behind. Debt Settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are not paying your creditors. This means that a debt settlement solution of debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money. I hope this information helps you Find. Learn & Save. Best, Bill Bills.com
Debt consolidation ads on TV may not necessarily be the best choice, especially if they promise something that sounds too good to be true. Here is what to watch out for in those that doesn't necessarily make consolidation itself a bad choice, as it may make sense in some cases. If you have multiple loans, like in your situation, and you are paying higher rates, and are unable to manage these multiple payments, then consolidation may make your life a bit easier, besides lowering the rate in certain circumstances. There are different types of consolidation companies - those which take your payment and send it to your multiple creditors on your behalf, those which negotiate lower rates with your creditors and put you on a payment plan, or those that provide you a consolidation loan. Just ensure you go to a reputed firm, or a Govt approved agency. You can find plenty of free information on consolidation this info provides you with some idea.
You can Go to you will get list of Debt Consolidation agencies With lowest Fees . Check and Compare before making any Final Decision.
