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Debt Consolidation Loans replace your multiple existing loans and debts with a single consolidated loan from another creditor altogether. A debt consolidation process brings together your pending debts and multiple payments like store, gas and phone bills, medical bills, taxes, overdue rent etc. This consolidation reduces your monthly payments by lowering the interest rate or extending the repayment period or sometimes both. So finally all you have to do is pay off one loan by making single monthly payments. The creditor of this loan corresponds with all your previous lenders and you no longer have to deal with them. The main attraction of this loan is its low interest rate. Debt Consolidation Loans that are applied for and dealt with online, are called Online Debt Consolidation Loans.

Online Debt Consolidation Loans are very efficient and time saving. Instead of walking into a bank the traditional way, these loans allow you to apply online. The internet presents you with an opportunity to find detailed information on all the loans available, interest rates, repayment options, credit scores and lists of the innumerable companies offering them. With Online Debt Consolidation, you can compare quotes, choose your loan, fill out the required documents, apply for the loan, get an answer and manage your finances, all from the comfort of your home.

There are infinite loan companies that provide the online facility. It is not only easy for you but also for your creditors to deal with all their clients without having to personally visit them. They can maintain records and keep you informed by the minute. To find the best deals, you can simply start off with a search engine by typing “Online Debt Consolidation Loans”. From there, look up companies and check for reviews to see which are the most reliable when it comes to online debt consolidation. It may be a good idea to ask the company you are thinking of using, for references from former clients that had similar debt problems.

Remember:

•There are endless online debt consolidation programs available on the internet. Get as many quotes as possible. Find out about interest rates, repayment options, security or collateral needed, etc. Dig out all the information before getting one.

•Get references from former clients that had similar debt problems.

•Be vigilant about fine prints, lender fees and hidden costs. If in doubt, clarify with your lender; once the agreement is signed, the terms are binding to both parties.

•Do not hesitate in taking the help of legal experts.

•Always be cautious and keep an eye out for fraud.

Online Debt Consolidation Loans facilitate you further by allowing you to make your payments online as well. It uses your savings account number to wire money into your new consolidation loan. There is, as with anything, always a fear of being a victim of fraud when it comes to online dealings. Always remember that fraudulent companies will provide minimum information about themselves while extracting maximum out of you.

Do not apply:

•When there is a fee for application.
•When there is no customer service or representative help.
•When the company is not reputable.
•And even if your instincts just tell you so.

When it comes to managing your debt quickly, easily, and conveniently, Online Debt Consolidation Loans may be ideal for you. They help individuals research, apply, and use debt reduction programs in order to take charge of their debt. Look around and talk to people before committing to any lender. It sure pays off to take full responsibility for your own finances. All of it can happen through a series of mouse clicks and keystrokes. Get your deal right away!]]>

There are many factors that would contribute to such a terrifying state. Financial management, without a doubt, is one of them. Financial management does not only entail a wanton neglect of a budget plan and an uncontrollably vicious spending streak. Often, it is caused by lack of proper education in the in sound financial planning.

When we find ourselves in such a financial rut, we try to look for available options that would help us get out of the hole we have dug for ourselves. However, options drastically reduce in number the deeper we get buried in debts.

But this shouldn’t be taken to mean that we don’t have any options to resort to. There are some of them that are still available, and they deserve a closer look if we want to get out of our financial troubles.

There are still a number of options available for you. Let’s take a look at them.

Debt Consolidation

You could decide to merge your existing loans into one debt, though not directly. Through debt consolidation loans, the creditor would pay off your subsisting debt. You will then have just one debt to pay, that of your new creditor.

Debt consolidation is often resorted to for the following reasons:

It would extend the maturity date of your loans under the new consolidated loan.

You would pay a lower interest rate under one loan.

It would be easier to manage a single loan than having to pay off multiple ones every month.

Debt consolidation would not necessarily solve your debts per se, but at least, it would buy you the time that you would need to muster enough resources to settle your obligations. It is still a good option, especially when several debts become due and demandable within the same period.

Securing A Second Loan

Not as direct an option as debt consolidation, you could always apply for a new loan to pay off an existing one. This would be a great approach, not only in prolonging the maturity date of your obligation, but also in paying a lower interest in the event that the new loan has a lower rate than the previous one.

Second loans have always saved a lot of debtors from almost certain disaster. Most loans do not ask for the purpose of your desired borrowings anyway. By applying for a new loan, you’d be able to delay eventual payment, and you’d be able to answer the more pressing needs of your life.

Filing For Bankruptcy

Considered as the court of last resort, you could always file for bankruptcy. You would need to have exhausted all available remedies though, and you must prove to the court that your application is done in good will, meaning you have no intention whatsoever to defraud your creditors. You would also have to establish through preponderance of evidence that you cannot fulfill all your obligations once they have become due and demandable.

Your assets would thereafter be placed under the case of a court-appointed trustee. The said trustee would call all your creditors to an assembly, called a 341 meeting, where your assets would be liquidated and distributed among them, in proportion to their respective claims. The portions of the debts that cannot be fulfilled by your assets would be written as losses for your creditors. After this, your debts would be considered dissolved.

Though declaring bankruptcy has its benefits, it also has its share of disadvantages. Among them is the negative mark it would leave on your credit record, which would adversely affect future loan applications as well as when you’re applying for a job.

Also, you must be reminded that your line of credit may be suspended for at least 2 years. It would take quite some time before you could recover from a state of bankruptcy.

UPDATE: Congress has passed a new Bankruptcy Protection Law that now makes it tougher to file and declare bankruptcy. Make sure you understand how it will affect YOU.

Go to www.1debtfreedom.com for your free no-obligation quote.
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For example, stashing old ATM receipts and hanging on to a stub showing what you paid for a pack of mints two years ago (cash, of course), might be filed with your paycheck stubs, credit card statements – paid and unpaid alike – as well as a few tax forms, a stray paper clip and a penny.

Anything from an old shoebox to a toolbox would do you for this method of personal financial tracking but you can do better than that.

Not to worry. Here’s how:

1) Plan for a few hours of “alone time” with your financial records. This is a dandy time to pack the kids off to the mall, put up a pot of excellent coffee and a little snack (preferably chocolate), as a treat when you’re done.

2) Supply yourself with ample space, such as a large dining room table. Make sure you have enough organizing supplies close at hand: sticky notes, file folders, a tub to hold them with hanging file folders, large envelopes, a check file, ring binder/s and a three-hole punch if you like, an open stacking file, and an organizer/sorter. A trash can by your side is a must.

3) Get everything from everyplace – shoe boxes, check files, file folders, etc.

4) While enjoying your cup of coffee, make a game plan. Decide what you’re going to put where: e.g., checks and statements go in a specific file for checks and statements, credit card statements can be unfolded and placed in a file folder, etc.

5) Start sorting on the table. Checks go here, ATM receipts go there, paycheck stubs go over there, paid bills go on the other side, etc. until all the “stuff” is divided into neatly organized piles. Use sticky notes to mark what-goes-where on the table to avoid confusion.

6) Put all the “paid” items away first. Be ruthless – it’s perfectly okay to toss the receipt for those mints from two years ago.

7) Put the rest of the inactive items in the envelopes, file folders, check files or other storage devices as are interesting, functional, and readily available from your local office supply store.

Have another cup of coffee and tackle the active, or open, items. Decide what you’re going to pay and when. If you have an open stacking file, you will find one with four compartments (one for each week of the month), very handy for this purpose.

9) Balance your checkbook. Now.

10) Enjoy your chocolate after putting everything away where it belongs and, oh, by the way, check the calendar for when you’ll be doing this again next month.

Of course, next month this will all be done much faster.

I highly recommend using technology to make this much easier and faster. Programs like Quicken and Microsoft Money will help. Really any spreadsheet program will do.

Have a category for each life area you spend money. Once a week or month take your receipts, checkbook records and scribbled notes and record where you spent ALL your money….every penny. One of my students was shocked to find out he was spending $75 per month on orange juice!

Legend has it that the Rockefeller boys kept track of all their spending and they turned out alright.

This time next year you’ll wish you started today.]]>

Here’s what to do. Compare the interest rate on each of your loans and repay those with the highest rate first. The only way to do this is to look at the rate of APR on each of your debts. That’s the only way to decide which debt is more expensive. If you’re unsure, check your loan agreement or ask the lender.

Then, it’s just a case of throwing everything you can at the debt with the highest APR (provided you can still make the minimum payments on your other debts).

Then move on to the next most expensive debt, and wipe it out. Then focus on the next most expensive, and the next, and the next, until you’re entirely debt free!

This means that you should normally aim to pay them off in the following order.

Store cards, catalogue accounts and other hire purchase agreements
- Overdrafts
- Credit cards
- Personal loans/Car loan
- Mortgages and other secured borrowing

Get The Best Deal

Get the best loan deals that are available to minimise the interest that you pay.

Fact: It’s much easier to repay a loan with an interest rate of 5.9% APR than one set at 29.9% APR.

The less interest that you have to pay, the more you’ll have left to repay the amount originally borrowed.

Transfer each of your debts to as low a rate of interest as you can find. Transfer debts on your credit cards to a lower rate card. You might be able to find a card that gives zero percent interest on all balance transfers for 6 months. Likewise, why continue to pay 30% APR on your storecard debts, when you could transfer the balance to a credit card that charges a much lower rate.

But if you decide to do that, I’ve got two warnings for you. When you transfer debts from one of your plastic cards, destroy the old card immediately!

Avoid the urge to keep them, or before you know it both cards will be up to their limit, and you’ll be looking for an even lower rate just to keep up with the repayments.

And second, don’t waste these interest free periods. Just because you don’t have to pay interest for a while, don’t ease up on your efforts. Keep paying as much as you can to reduce the size of the debt.

Interest free periods are a golden opportunity to substantially reduce your debts. Don’t look on them as a ‘payment holiday’, or as an excuse to increase your spending.

by Stuart Laing

Copyright (c) http://www.icanhelpyougetoutofdebt.com]]>

The major difficulty that arises with self employed loans is the individual’s undocumented income. Regular salaried individuals can provide with pay stubs or lenders can verify about them with their employers. For self employed individual there is not such luxury. So, the next thing they look for is the income tax returns. Typically self employed loans lenders look for two to three years of income tax returns. Since income tax returns are not always so reliable for income is usually understated. Also, self employed lending suffers due to the fact that income of self employed people is not usually stable. Lenders would be eager to determine its stability and readily look towards current balance sheets. For self employed loans, business should not be less than two years old.

Most lenders offer self employed “limited documentation” or “no documentation” loans. This will be highly favourable of self employed who cannot forward documented income. In place of this provision Lenders will offer self employed loans at high interest rates (1-2% higher than normal interest rates) or will have tough requirement for qualifications. Lenders may compensate the high risk status of self employed with bigger down payments. Self employed loan programmes will vary from lender to lender. In such a scenario, looking around might be a good idea. There will be self employed loans lender who appropriately charge for self employed. All you have to do is keep shopping.

Credit history will always play a crucial role in deciding the various aspects of self employed loans. It is evident that good credit history will provide benefits that no other qualification criteria can provide. Good credit score will make it easier for you to get approved for self employed loans. With good credit score, loan to value ratio can reach up to 90%. Also with good credits score the down payment is as low as 20% which otherwise can go as high as 40%.

Self employed loans depending on your choice and compulsion can be both secured and unsecured. Secured self employed loans are available on lower interest rates cause here the loan amount is given in return of security. Security is usually home and real estate; however, depending on the lender, secured self employed loans may be available at lower interest rates. Unsecured will be at higher interest rate, will not require any security and are better suited for smaller loan amounts.

There are 2.75 million people which are self employed in UK. With the rising number of self employed in UK, it is not a surprise that self employed loans are an emerging category in the loans market. A self employed borrower is the one who owns 25% or more of the business from which income is derived. Self employed loans are not new to the loans market; however, they have recently been adorned with flexibility and ease with respect to a self employed. With this new outlook towards self employed loans, self employed should be careful not to misuse this freedom. Refrain from overstating your income and exercise self control. Then, there is no stating the fact that self employed loans will prove integral to strengthening your very own micro economy.
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The most important thing to implement and remember in any debt consolidation plan is to cut up all your credit cards, except for one or two, which can be used in emergencies. To symbolize a fresh start to your financial status, it is important that you take your debt consolidation plan seriously and thus throw away the pieces of your credit cards. For you to be able to create your own debt consolidation plan, it is important that you cancel all your credit lines and thus request a lower rate of interest on the remaining debt. With this, you should get an idea on how much money you will be expecting to cover with your debt consolidation plan.

Another point to remember and implement in your debt consolidation plan is to transfer as much debt as possible to the credit card having the lowest interest rate. This credit card will then be the focus of your debt consolidation plan, rather than the many different loans you have from different creditors. Another option for your debt consolidation plan to consider is to get a debt consolidation loan from a bank at a lower rate. To make sure that you will stick to your debt consolidation plan, and also not accrue further debts, it is important that you use cash for all your purchases, and to buy only what you can afford. Remember, if you don’t have the money for it, then it is probable that you don’t need it anyway! Remmebe that you are cutting down on your luxuries with a reason, and make it a point to focus on your debt consolidation plan. Never be tempted to think that one small charge on a credit card won’t have a negative impact on your debt consolidation, as it very much will! Remember, that there will be another sale coming to your favorite store in the future, but this is your only chance to get all your finances back on track. It is very important that you stick on your debt consolidation plan for this to happen.

The most important point of focus of your debt consolidation plan would be to commit yourself to start paying off your debts one at a time, and not only say this, to do it too! Make it a point to pay off the credit card and loans with the highest rate of interest first so that you give your plan the best possible start and thus, a better chance at success in the long run.

Get more on sticking to a debt consolidation plan]]>

A first word of warning is to steer clear of debt consolidation companies. These are the ones that run commercials promising debt help despite your poor credit. They will charge application and handling fees that other sources of help would not charge, and will oftentimes charge up to 23% in interest, which would be reflected negatively in your credit rating.

Credit cards often charge high rates of interest, which makes them a popular candidate for debt consolidation. In this case the process is relatively simple. If you hold several credit cards with high rates of interest, you can simply transfer their balances to a single credit card with a lower interest rate. Many times you will be able to find credit cards offering a low introductory APR, and oftentimes this introductory rate will actually be 0% for the first six months.

If you are accumulating credit card debt because you are constantly spending more than your actual income, then consolidation will not help in the long run since your credit card balances will inevitably surmount again. As unappealing as it is, you may have to force yourself to look long and hard at yourself in the mirror in order to see that you may have to change your lifestyle and spending habits in order to fully take advantage of debt consolidation. Canceling your newly-zeroed credit cards is a good place to start.

If you are a homeowner then you should look into obtaining a home equity loan. In this case your home will act as collateral. So long as your loan is not more than the value of your house the interest on the loan will be tax deductible. Remember that if you default on this loan, it is very possible that you will lose your home.

In other cases of debt, you can find help at your local bank or credit union in the form of a secured or unsecured loan. The difference between the two is that a secured loan requires you to put up property as collateral, while an unsecured loan does not require any collateral. Needless to say, it will be more difficult to qualify for an unsecured loan.]]>

This way of thinking is best summed up by the following comment; ‘I already owe $27500 so what’s another $500. It takes my debt to a nice round figure $28000’.

That’s a dangerous way to think. From bitter personal experience, I know what it’s like. You try to limit your debt to a certain amount, such as perhaps $10000. But that limit comes and goes. Your debt creeps up above that amount. But you’re enjoying yourself, so you carry on spending.

You reach $13500, but you don’t want to stop, so you readjust your ‘limit’, thinking ‘I’ll go up to $20000, but I’m not going a penny higher’.

So you carry on spending and your debts hit the $20000 barrier…and then go slightly beyond.

Then what happens?

Correct! You increase your self-imposed limit to the next psychological barrier. Perhaps $22000 this time! And then you carry on spending.

Eventually, after many more ‘final’ limits have come and gone, your debt stands at $27500. And then you see a rather nice 7 day package holiday advertised as a ’special, once in a lifetime, never to be repeated’ offer. $500 first come, first served!

Your reasoning goes something like this. ‘That’s a great offer. I’ve not had a holiday for two years, and I could do with some sun before the winter sets in. I’ve already borrowed quite a lot. But it’s a special offer, and I couldn’t normally afford that type of holiday. I know it’s kind of expensive, but I already owe $27500, so what’s another $500. It hardly makes a difference. And I’ll worry about paying it back when I get home.’

You’ve reached another of your preset limits. But is doesn’t stop there, oh no. After all, what about a new wardrobe of clothes to take on holiday! And you couldn’t possibly go away without some spending money. You just wouldn’t enjoy yourself otherwise.

And so the $28000 mark is broken. Next stop $30000, or will it be $35000?

But as I said earlier, every extra dollar that you borrow restricts your freedom even further. Every dollar that you owe will cost perhaps $2 to repay after interest. It could take you half an hour (after tax) to earn that amount.

$1 borrowed, half an hour of your precious, non-renewable life. Gone! Never to be replaced! Wasted!

Now half an hour may not seem like much. But what if it’s multiplied by five hundred?

That’s 250 hours of your life. That’s almost six full working weeks!

And once your debt reaches $28000, what is there to stop you from thinking ‘it’s only another $2000. It will take my debts to a nice round $30000’ when you see a leather sofa/laptop/hi-fi that attracts your attention?

Bang goes another 1000 hours of your life. That’s another six months of eight hour shifts to look forward to!

When will it end? When your life runs out of time or the bank manager says ‘no more’?

Round figures aren’t nice! Especially when it means that your debts are even bigger than before. When you owe money, every penny counts! I can’t stress how important this is!

This rounding up attitude is very subtle, that’s why it’s so dangerous. It draws you in. And the more you owe, the larger these ‘what’s another [insert sum of money]’ thoughts become. If you owe $9200, what’s another $800. That takes you to $10000. But if you already owe $92000, this ‘what’s another’ attitude could cost you $8000. That will take you up to a nice round $100000.

Don’t mentally round up the amount of your borrowing, in order to justify spending even more. Every dollar you owe = less freedom.

by Stuart Laing

Copyright (c) http://www.icanhelpyougetoutofdebt.com]]>

Debt is money that someone else lends you, on the understanding that you’ll pay it back. Let’s face it, if you didn’t have to pay it back, it wouldn’t be a debt, would it? It would be a gift or a grant.

But it doesn’t end there. If only it were that simple!

Almost everyone who is willing to lend you money will expect something in return. Yes, you’ve guessed it, interest. Now for those who have forgotten about the effect of interest, let me remind you.

I want you to open your wallet or purse, and take out a bank note (if you have any, that is!). Now hold it out in front of you and set fire to it.

Go on, watch it burn. Watch it shrivel up and disappear in front of your eyes. Think about the effort that it took to earn that money.

Now take another note and repeat the procedure. Set fire to it and watch it disappear. Then do it again. And again! And again!

Not too keen, are you? And I’m not surprised.

But that’s what interest means if you owe money. It’s money that you have to shell out just for the privilege of being able to use other people’s money. And that’s before you think about repaying the amount that you originally borrowed!

You may as well set fire to your money. At least it would keep you warm and give you something vaguely interesting to watch for about thirty seconds!

The interest that you pay on your debts is dead money. You have to pay it just to stand still. So despite all the time and effort you may have taken to earn it, you remain in exactly the same position as you were before.

It’s like repeatedly paying for meals that you’ve already eaten, trips you’ve already taken and entertainment you’re already enjoyed.

Right back at square one!

Interest is the price that you pay for not having enough money to afford the things that you’ve bought. It’s the penalty for having tastes that are more expensive than your means. It’s your punishment for being poor!

But interest works both ways.

If you have money, it can be invested to make more money. You are the master. It is your servant!

But things change when you’re in debt.

Every penny that is borrowed has to be paid back….with interest! You become the servant. Money becomes your master, and it fairly cracks the whip!

I think this example with make everything clear.

Money and debt are like a giant pulley. Okay, imagine you’re standing on the top of a 100 storey building. There’s a giant pulley attached over the edge of the building. Hanging from the pulley is a heavy weight. It weighs the same as you. This weight represents the state of your finances.

You are on the roof of the building holding the rope that supports the weight from the pulley. Now imagine that the height of this weight represents the amount of money that you have. It starts level with the fiftieth floor. That represents break even. No money, but no debt!

The higher the weight rises, the more money you have. The lower it drops, the more you are in debt. Nice and simple, except that’s not the whole story!

The higher you manage to heave the weight, the healthier your bank balance. And to represent the interest your money would earn, for every floor the weight rises, you become 5% stronger (that’s your financial muscle). So by the time the weight rises from the 50th to the 65th floor, you become twice as strong, making the weight much easier to support (and lift even higher!)

But that’s where the good news ends. If you ease up on your efforts to lift the weight any higher, it will start to drop, and the extra strength you had will start to disappear. By the time the weight falls back to the fiftieth floor, you’ll be of average strength once again.

And then it gets even worse! As the weight drops below the fiftieth floor, to represent you slipping into debt, the weight gets heavier. For every floor that the weight drops below the fiftieth, the weight will increase by 5%. This represents the interest that has to be paid on your debt.

So in other words, you have to work harder and harder just to keep the weight from falling any further. The further the weight slips the harder it becomes to stop it dropping any further.

By the time it is level with the 25th floor, the weight would be three and a half times heavier than it was at the start. That means you’d have to work three and a half times as hard just to stop the weight from falling any further. That’s a mighty strain!

And people who are in debt wonder why they feel miserable and full of stress!

Oh yes, one final thing, if the weight hits the ground at the bottom of the building it’s game over! Bankruptcy! You lose everything that you currently ‘own’.

And the sad fact is that millions of people around the world are struggling to hold their weight somewhere around the 25th floor! At that level they can’t afford (no pun intended!) to ease up on their efforts for a moment. One slip and their weight will hit the ground.

If that doesn’t motivate you to get out of debt, I don’t know what will!

by Stuart Laing

Copyright (c) http://www.icanhelpyougetoutofdebt.com]]>

invention of all time.” It has even been referred to as the
“Eighth Wonder of the World.” The trick is to get this
tremendous force working for you rather than against you.

Is compound interest gobbling up a significant chunk of your
earnings? If you maintain an ongoing balance with a credit
card company, compound interest is costing you much more
than you probably realize.

Let’s start with basic interest, which is a fee that you pay
to a lender for the privilege of borrowing his money. This
interest is attached to the original amount at an agreed
upon rate.

Compound interest is calculated on the balance owing plus
any previous interest charges. So then you find yourself
paying interest on the interest. This compounding effect
continues until it virtually takes on a life of its own.

Credit card lenders make a killing putting this principle to
work for them. Allow me to illustrate.

Let’s say you’re carrying a balance of $1,000 on a credit
card with a 15% APR. If you pay only the minimum each
month, you could conceivably gnaw away at this debt for over
25 years and end up repaying a total of over $3,400!

If, on the other hand, you could commit yourself to paying
$100 per month, this debt would be wiped out in less than a
single year and the interest would come to a much less
offensive $75.

Now let’s look at what would happen if you took $1,000 and
put it to work for you instead of against you. Let’s assume
that you are able to keep your hands off this money and
simply let it sit and earn 6% interest compounded annually.
After 12 years, your money would have doubled without you
adding one extra penny!

“Rule of 72″

You can quickly figure out in your head how long it will
take for a sum of money to double by applying the “Rule of
72.” You simply take whatever interest rate you’re earning
(6% in this case) and divide it into 72. The result will be
the number of years required to double your money. (72/6 =
12 in our example.)

You can apply the rule backwards as well. Let’s say you
have a lump sum of $5,000 that you would like to grow into
$10,000 in 8 years. You would need to find an investment
that pays 9% compound interest. (72/8 = 9). If the best you
can find is an 8% return on your money (hypothetically
speaking,) then it would take you 9 years to double your
money.

Not bad for just letting it sit there!

Now let’s assume that you want to help the growth rate
along, so you add an extra hundred dollars to this account
just once a year. At the end of the 12 years, you would now
have $3,800. If you could discipline yourself enough to add
$200 a year, then you would find yourself with almost $5600.

Seeing your money grow like this might well entice you to
invest more money each month and really reap the benefits of
this wealth-generating principle.

And there’s more good news. These examples demonstrate
what happens when your investment compounds annually. Some
institutions are more generous, compounding your interest
quarterly, monthly or even daily.

It’s pretty clear which end of the compound interest
principle you want to be on. The first step toward the
winners’ circle is to pay off your existing debts. Even if
you’re already having trouble making ends meet, a mere $1
addition to a minimum payment can significantly shorten the
life of that loan.

That’s right, just one dollar. You won’t miss it and it would
be well worth it. Remember the compounding effect.

And once you’re out of debt, there’s no minimum for earning
compound interest. Any sum that you can set aside will do.

You don’t need to be Donald Trump or Bill Gates in order to
benefit from compound interest. It can work wonders for us
all.]]>