pay debt – Phuut Thai http://phuutthai.com/ Tue, 08 Mar 2022 18:09:05 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://phuutthai.com/wp-content/uploads/2021/10/icon-5-120x120.png pay debt – Phuut Thai http://phuutthai.com/ 32 32 Will a debt consolidation loan affect my credit rating? https://phuutthai.com/will-a-debt-consolidation-loan-affect-my-credit-rating/ Tue, 08 Mar 2022 18:09:05 +0000 https://phuutthai.com/will-a-debt-consolidation-loan-affect-my-credit-rating/ Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own. (The Credible Money Coach explains the possible […]]]>

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

(The Credible Money Coach explains the possible credit impact of a debt consolidation loan.)

Dear Credible Money Coach,

Is it true that when you take out a debt consolidation loan, it hurts your credit? —Twila

Hello Twila and thank you for your question. Debt consolidation affects your credit differently depending on how you structure it and manage loan repayments. This can be a smart way to manage multiple high interest debts without hurting your finances.

If you’re considering a personal loan for debt consolidation, compare rates from multiple lenders to get the best deal. Credible, it’s easy to view your prequalified personal loan rates in minutes.

Why do people consolidate their debts?

When you consolidate debt, you open a new credit account, such as a personal loan, credit card, or home equity loan, to repay several existing debts. This leaves you with one payment instead of multiple accounts to manage.

If you have good credit, you may be able to get an interest rate that’s lower than the combined effective rate you’ve paid on multiple debts. This saves money in the long run.

Ways to Consolidate Debt

There are several options for consolidating debt, including:

Each of these options has advantages and disadvantages. For example, personal loan interest rates are generally lower than credit card rates. But if you continue to incur credit card charges, you could go into more debt.

Doing a 0% balance transfer could save you interest for 12 months or more. But if you don’t repay the entire balance before the end of the promotional period, the interest rate could increase significantly.

If you sign up for a debt management plan with a credit counselor, they can negotiate with your creditors to pay less than you owe, lower your interest rate, or extend your repayment period. But if you can’t repay a debt management plan as agreed, your credit may suffer.

Risks of a debt consolidation loan

A debt consolidation loan can lower your credit scores in the short term. This is because new credit applications cause your scores to drop. And if you use the loan to pay off a credit card and then close it, you reduce your total available credit, which leads to lower credit scores. (It’s best to keep a paid credit card open so you have more credit available in your name.)

However, if you make your new loan payments on time each month, your credit should recover fairly quickly from the slight hit it took when you opened the loan.

Should you get a debt consolidation loan?

A debt consolidation loan is not for everyone. I advise you to think twice before emptying a retirement account to pay off debt or putting your home at risk with a home equity loan or line of credit.

And if bad spending habits are causing your debt, working with a qualified credit counselor to improve your financial habits may be more helpful than lowering your interest rate with a debt consolidation loan.

If you decide a personal loan is right for you, Credible can help. compare personal loan rates from multiple lenders without hurting your credit.

Ready to know more? Check out these articles…

Need Credible® advice for a money-related question? Email our credible financial coaches at moneyexpert@credible.com. A Money Coach could answer your question in a future column.

This article is intended for general information and entertainment purposes. Use of this site does not create a professional-client relationship. Any information found on or derived from this website should not replace and should not be taken as legal, tax, real estate, financial, risk management or other professional advice. If you require such advice, please consult a licensed or competent professional before taking any action.

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About the Author: Laura Adams is a personal finance and small business expert, award-winning author and host of silver girl, a weekly audio podcast and top notch blog. She is frequently quoted in the national media and millions of readers and listeners benefit from her practical financial advice. Laura’s mission is to empower consumers to live richer lives through her work as a speaker, spokesperson and advocate. She earned an MBA from the University of Florida and lives in Vero Beach, Florida. Follow her on LauraDAdams.com, instagram, Facebook, Twitterand LinkedIn.

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Alternatives to Debt Consolidation Loans https://phuutthai.com/alternatives-to-debt-consolidation-loans/ Fri, 25 Feb 2022 08:00:00 +0000 https://phuutthai.com/alternatives-to-debt-consolidation-loans/ Debt consolidation loans are personal loans used to merge high interest debts such as credit cards, payday loans or other bills into a brand new fixed rate loan. After you receive the funds from this loan, they are used to pay off your other debts. If you pay off the loan on time, get a […]]]>

Debt consolidation loans are personal loans used to merge high interest debts such as credit cards, payday loans or other bills into a brand new fixed rate loan. After you receive the funds from this loan, they are used to pay off your other debts. If you pay off the loan on time, get a lower interest rate, and don’t incur any additional debt that you can’t handle, you might be able to pay off your debt faster and save a ton of money on interest.

However, while using these loans is a good way to consolidate payments and hopefully lower the interest rate on your debt, there are several debt consolidation loan alternatives for people who don’t. may not qualify for a debt consolidation loan or those looking for lower interest rates. .

Debt Consolidation Loan Alternatives

A debt consolidation loan is not for everyone. Since debt consolidation loans are unsecured personal loans, lenders may have stricter eligibility criteria or the loans may not be large enough for the types of debts you are trying to consolidate. Here are some debt consolidation loan alternatives:

  1. Balance Transfer Credit Card: A balance transfer card allows you to transfer debt from other credit cards – usually credit cards from other companies only – or use a balance transfer check to combine other forms of debt into one 0% interest rate. This promotional low rate period typically lasts 12-21 months, and a good to excellent credit rating is required for approval. Once the introductory period is over, you will be responsible for paying the card’s standard interest rate on the remaining balance. Additionally, most cards will charge you a balance transfer fee on the total amount you transfer, usually 2-5%.
  2. Home equity loan or HELOC: Home equity loans and home equity lines of credit (HELOCs) allow you to borrow against the equity in your home. While a home equity loan has fixed monthly payments at a fixed interest rate, a HELOC works like a credit card and has a variable interest rate. Both can be used to consolidate high-interest debt, but you risk losing your home if you can’t pay them off. Also, both require you to have some equity in your home. In comparison to debt consolidation loans, home equity loans and HELOCs often have longer repayment periods, larger loan amounts and lower interest rates.
  3. Refinancing by collection: A cash-out refinance replaces your existing mortgage with a brand new mortgage for more than your current outstanding balance. You can withdraw the difference between the two balances and use it to improve your home or consolidate your debts. As with using a home equity loan or HELOC, you risk losing your home if you cannot repay your new loan.
  4. Debt settlement: Debt settlement takes place when you negotiate with your lender to pay less than what is owed to settle the debt. You can negotiate with the debtor yourself or pay a fee to a debt settlement company or lawyer to negotiate on your behalf. Even if you, a lawyer, or a business successfully negotiate a settlement, your credit score can take a hit.
  5. Bankruptcy: Filing for bankruptcy involves going to federal court to have your debts canceled or reorganized to give you time to pay them off. While you can pay off your medical debt, personal loans, and credit card debt in the event of bankruptcy, paying off your student loans and tax debt is incredibly difficult. Before choosing this alternative, keep in mind that your credit score will take a hit; it may take years for him to recover.

The bottom line

While using a debt consolidation loan to merge your high-interest debts might make financial sense if you can get a lower interest rate, it’s not your only option. In some cases, choosing an alternate route may be a better choice. For example, you might be able to get a lower rate by taking out a home equity loan, since it’s a secured loan backed against your home.

However, it is also important to know the risks involved in choosing such an alternative. Shop around the different options and compare interest rates, repayment terms, and the trade-offs you’ll make with each before continuing.

Learn more:

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Affordable debt consolidation https://phuutthai.com/affordable-debt-consolidation/ Wed, 16 Feb 2022 23:09:09 +0000 https://phuutthai.com/affordable-debt-consolidation/ Credit card spending has increased in the United States due to financial constraints caused by COVID-19. Texas leads the pack behind California for states with the highest increase in credit card debt, according to a Sept. 21 study by WalletHub. And low mortgage interest rates haven’t translated into low credit card interest rates. Surprisingly, the […]]]>

Credit card spending has increased in the United States due to financial constraints caused by COVID-19. Texas leads the pack behind California for states with the highest increase in credit card debt, according to a Sept. 21 study by WalletHub. And low mortgage interest rates haven’t translated into low credit card interest rates. Surprisingly, the median interest rate on all credit cards in the Investopedia Card Database for October 2021 is 19.49%.

These high interest rates can create financial hardship for people who have significant credit card debt. High payments can make it impossible to cover rising living expenses. Debtors who have fallen behind face relentless collection calls and sometimes debt collection lawsuits. Fortunately, there are solutions to this crippling debt. Let’s look at the most common options.

Secured or unsecured debt consolidation loans:

Unsecured debt consolidation loans involve taking out a low interest loan to pay off higher interest credit card debt. Since these loans have no collateral that the lender can seize or repossess, they require high credit scores and excellent debt-to-income ratios to reduce their risk. Most secured debt consolidation loans use home equity as collateral. In Texas, your home must be maintained at less than 80% when using equity, so not all of the equity is available through a refinance or 2nd mortgage . However, if you have sufficient equity, the credit score requirements are lower than for an unsecured loan because your home is collateral.

Debt management plan with credit counseling:

A credit counseling program can offer some of the benefits of a debt consolidation loan, including the need to make one monthly payment and lower interest rates. There is no need to take out a new loan since the rates on your existing debts are reduced, so good credit scores are not required, but you must afford the monthly payments. However, this is considered a “hard” program, so if you want to take on more debt (and have the ability to pay for it), then this is not a program you should consider. Based on your current interest

rate, the monthly payment is likely to be lower than your combined minimum payments, and these programs are designed to pay off the debt in about five years or less.

Debt Negotiation for Debt Relief

Debt negotiation, also known as debt settlement, is another common way to resolve crippling credit card debt and personal loans. This is a hardship program, and similar to credit counseling, it is not an option if you plan to apply for more debt before completing the program. These programs are usually structured to last around 24-48 months, depending on your monthly budget and negotiated amounts. Monthly program payments can cost less than half of minimum payments. A reputable program will not charge trading fees until a debt is settled.

The savings are the result of not making monthly payments to your creditors. Instead, money is deposited in an FDIC-insured special purpose account while debts are negotiated and settled for less than the total balances, one at a time. The program is ideal for those who are about to fall behind or those who have already fallen behind, as failure to make minimum payments will negatively affect a credit score. However, it can be a great alternative to bankruptcy, and since the program can be completed much faster than most other options, you can also start rebuilding your credit score quickly. All debt negotiation programs are not created equal. Debt Redemption trading fees are often 20-40% lower than foreign firms. They also have special resources to help Texans who have been sued by a creditor or debt collector.

Chapter 7 or 13 Bankruptcy:

Bankruptcy may be the shortest and cheapest way to settle a debt if you can qualify for Chapter 7. Many people with large incomes or non-exempt assets have issues that prevent Chapter 7 filing and chapter 13 might be the only form of bankruptcy available. In some cases Chapter 13 will be more expensive than a debt negotiation program, and in other cases it will be less expensive. If you are considering this option, consultation with a Texas bankruptcy attorney is necessary. Debt Buyback does not provide legal advice.

Get Free Debt Relief Consolidation

Affordable Debt Consolidation in San Antonio, TX also has several offices in the Lone Star State to help Texans struggling with crippling debt. If you’re considering debt consolidation loans, credit counseling, or debt settlement, a Texas Debt Specialist can provide you with a free, no-obligation phone or office consultation. We can also refer to Texas bankruptcy attorneys when needed. Learn about your options for resolving your debt today so you can start living your debt-free life. Call 800-816-1003 or visit https://affordabledebtconsolidation.com

For more coastal life, visit our website or follow our Facebook and Instagram.

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6 reasons why a personal loan is ideal for debt consolidation https://phuutthai.com/6-reasons-why-a-personal-loan-is-ideal-for-debt-consolidation/ Thu, 10 Feb 2022 11:32:42 +0000 https://phuutthai.com/6-reasons-why-a-personal-loan-is-ideal-for-debt-consolidation/ Image source: Getty Images The right personal loan could make your debt much cheaper and easier to pay off. Key points Personal loans allow you to borrow money for almost any reason. They often come with affordable interest rates. Personal loans can be used to consolidate debts. This means that you take out a new […]]]>

Image source: Getty Images

The right personal loan could make your debt much cheaper and easier to pay off.


Key points

  • Personal loans allow you to borrow money for almost any reason.
  • They often come with affordable interest rates.

Personal loans can be used to consolidate debts. This means that you take out a new personal loan and use it to pay off several existing creditors. You can use a personal loan to pay off credit cards, medical debts, other personal loans, etc.

But why would you want to do that? Here are six main reasons why a personal loan can be the ideal tool to use to consolidate your debts.

1. You can use the loan proceeds for anything you want

Most personal loan providers offer great flexibility in how the borrowed money is used. They may not even ask you what you will do with the loan proceeds.

Therefore, after borrowing, you are free to pay off just about any debt you want, from credit cards to medical debt to other personal loans.

2. Personal loans often offer competitive interest rates

The interest rate on a personal loan is often much lower than the rates for other common types of debt, such as credit card debt.

If you can lower the interest rate on your borrowed funds, repayment should be less expensive over time because you won’t have to give the lender so much money to have the privilege of accessing credit.

3. Many personal loans allow you to borrow a large sum

It is often possible to borrow a large sum of money when taking out a personal loan – sometimes as much as $50,000 or $100,000, depending on your income and other financial qualifications.

Since you can borrow a lot, you should hopefully be able to use your personal loan proceeds to pay off most or all of your outstanding debt. This will simplify the debt consolidation process since you won’t have to choose which debts to pay off with your consolidation loan, and you won’t end up with multiple creditors when you’ve completed the process.

4. You can lock in your interest rate with a personal loan

Many lenders offer you the option of choosing a fixed rate personal loan. If you refinance variable rate debt into a fixed rate loan, you won’t have to worry about rising rates and your debt going up.

You’ll have complete certainty about what you’ll be paying each month because your monthly payments and borrowing costs will never change.

5. Personal loans come with fixed repayment schedules

When you apply for a personal loan, you decide on a fixed repayment schedule for your personal loan, such as three years or five years. This time frame will not change once you sign your loan agreement and commit to borrowing.

As a result, you’ll know exactly when you’ll complete your debt repayment plan and be free of any debts you’ve consolidated.

6. You don’t usually put your assets at risk when you take out a personal loan

Typically, you will use an unsecured personal loan when consolidating debt. This means you don’t need to use any assets as collateral, unlike a home equity loan, where your home secures the loan.

Each of these benefits distinguishes personal loans from other debt consolidation options, such as home equity loans or balance transfers. If you’re hoping to consolidate your debt this year, a personal loan should be considered when deciding what new credit to take out to pay off your existing lenders.

The Ascent’s Best Personal Loans for 2022

The Ascent team has scoured the market to bring you a shortlist of the best personal loan providers. Whether you’re looking to pay off debt faster by lowering your interest rate or need extra money to make a big purchase, these top picks can help you reach your financial goals. Click here for the full rundown of The Ascent’s top picks.

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Using a Home Equity Loan for Debt Consolidation – Forbes Advisor https://phuutthai.com/using-a-home-equity-loan-for-debt-consolidation-forbes-advisor/ Fri, 04 Feb 2022 17:43:13 +0000 https://phuutthai.com/using-a-home-equity-loan-for-debt-consolidation-forbes-advisor/ Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors. As a homeowner, you have additional financial responsibility, including mortgage, property taxes, home maintenance, and other expenses. You may also be carrying high-interest debt, such as credit cards. Fortunately, there are ways […]]]>

Editorial Note: We earn a commission on partner links on Forbes Advisor. Commissions do not affect the opinions or ratings of our editors.

As a homeowner, you have additional financial responsibility, including mortgage, property taxes, home maintenance, and other expenses. You may also be carrying high-interest debt, such as credit cards. Fortunately, there are ways to pay off your debt faster with help from your home.

A home equity loan allows you to use the equity in your home to consolidate your debts at a lower interest rate. However, this strategy has some drawbacks. Here’s what you need to know.

How a Home Equity Loan Consolidates Debt

Home equity is the difference between what you owe on your home (the mortgage balance) and its current value, usually based on the current appraised value. You cannot get a home equity loan unless you have some equity in your home; lenders usually look for at least 15% equity in order to lend them to you.

The more you pay to your lender, the more your capital increases. Another way equity increases is when the overall real estate market is healthy and home values ​​(or sale prices) in your area increase. A home equity loan allows you to borrow against that equity in the form of a lump sum installment loan.

This money can be used for a variety of purposes, such as renovating your home, paying for college, covering emergency expenses, and consolidating debt.

Home equity loans are a good debt consolidation tool because the interest rates are quite low compared to other forms of debt. Once your home equity loan is closed and you receive your funds, you can use the money to pay off your existing debt and then make a one-time payment to your lender until the loan is paid off, usually over a period of five to 20 years.

Advantages and Disadvantages of Using a Home Equity Loan to Consolidate Debt

When deciding whether or not to use a home equity loan to consolidate your debt, you should first consider a few important pros and cons.

Advantages

  • Lower interest rates: If you’re looking for ways to borrow money or consolidate debt, a home equity loan offers some of the lowest rates available. Currently, their annual percentage rate (APR) is around 4% to 6%. Personal loans and credit cards, on the other hand, often have double-digit interest rates.
  • Easy access to financing: Although there are certain income and debt balance requirements that you must meet, a home equity loan tends to be easier to obtain than other types of debt. This is partly because your property serves as collateral, so there is less risk to the lender than an unsecured loan, which has no assets used as collateral, as they can repossess the collateral. in the event of a defect. Therefore, the lender is more willing to offer a home equity loan.
  • Tax deduction potential: You may be able to write off some of the interest you pay on your home loan. However, you can only take advantage of this deduction if you use the money to pay for home improvements. If home renovations are part of your larger financial plan, it may be worth relying on a home equity loan rather than a credit card, especially if you’re also trying to pay off your high-interest debt.

The inconvenients

  • Risk of losing your home: Since your property serves as collateral, you could lose your home in the event of late payment or default. As long as you’re able to track your payments, this shouldn’t be a problem.
  • Your house could fall under water: Since a home equity loan relies on the value you have accumulated in your home, there is a chance that you will end up under water on your mortgage (you owe more than the value of the property) if the value of the house drops. This is not a problem if you plan to stay in your home for several years, or long enough for the property to recover in value. But if you were hoping to move soon, you might suffer a loss.
  • There could be more fees: You may need to pay to have your home appraised by a professional to determine the value to get a home equity loan. Usually it costs a a few hundred dollars but could be higher depending on where you live and the type of property. You may also have to pay closing costs on the loan.

Is a home equity loan the best way to consolidate debt?

If you’re in a strong financial position, leveraging the equity in your home to get rid of high-interest debt faster is a smart move. However, if you are not planning to stay in your home for long or you are not sure that your income will be stable throughout the repayment period, you may be better off choosing another method of debt consolidation. .

Other Debt Consolidation Options

There are several ways to consolidate your high interest debt without risking your property.

1. 0% Balance Transfer Cards

To attract new business or issue cards to existing customers, credit card companies often offer a 0% introductory APR to customers who rollover their existing credit card balance, usually from a competitor.

The introductory period typically lasts 12-18 months, during which this balance incurs no interest charges. This means that your payments go 100% towards paying off the principal balance, allowing you to get rid of this debt faster. Usually there is a 2% to 5% balance transfer fee up front. The key is to pay off your balance before the end of the introductory period or you’ll start racking up interest charges again.

2. Take out a personal loan

Personal loans, which are loans you can use to pay almost anything up to a predetermined amount, can also help consolidate your debt. Rates are generally lower than credit card rates, at least for borrowers with good credit.

There are two types of personal loans: secured and unsecured. Secured loans are secured by collateral, such as a bank account or vehicle. This helps reduce the lender’s risk, which results in a lower interest rate. Unsecured loans allow you to borrow money without providing collateral; the trade-off is that the rate may be a bit higher and you may be subject to stricter requirements.

3. Develop a debt management plan

If you’re having trouble making payments on unsecured debt, such as credit cards or personal loans, you might consider working with a nonprofit credit counseling agency to develop a debt management plan. debt (DMP). An accredited advisor will take care of your payments and negotiate on your behalf with lenders to reduce the cost of your debt. You will then make your reduced payments directly to the agency and receive regular progress reports. Registration for a DMP may be chargeable.

Find the best home equity lenders of 2022

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YK Osiris Joking Receives $65,000 Debt Consolidation Check From Barstool Sports https://phuutthai.com/yk-osiris-joking-receives-65000-debt-consolidation-check-from-barstool-sports/ Mon, 17 Jan 2022 08:56:58 +0000 https://phuutthai.com/yk-osiris-joking-receives-65000-debt-consolidation-check-from-barstool-sports/ Debt free is the way to be! If it looks like YK Osiris has finally found relief to pay off all the debt he owes. The singer owes money to people left and right, from Lil Baby to the recently paid Drake. With all the buzz surrounding his debt from making multiple bets, Barstool sports […]]]>

Debt free is the way to be! If it looks like YK Osiris has finally found relief to pay off all the debt he owes. The singer owes money to people left and right, from Lil Baby to the recently paid Drake. With all the buzz surrounding his debt from making multiple bets, Barstool sports decided to step in and help Osiris clear his name. In an episode of the YouTube series “Sundae Conversation”, Osiris explained how he got into the debt situation to begin with.

Host Caleb Pressley asked him, “Why do you owe so many people money?” While laughing and showing his perfectly white teeth, the ‘Worth It’ singer replied, “I don’t make smart bets. I just jump in the water and swim. Osiris then asked Caleb: ‘Es you gone to save me?” Caleb came over and handed her a check for $65,000.

As Osiris sat there laughing, Caleb asked if the debt consolidation check was enough to cover his debt? Still laughing, Osiris explained, “I need more than this man. How can I get more? How much do I owe you on interest? Caleb told her they would worry about it later. Although it seemed like a joke, Osiris was in good spirits about the show. The housemates liked the video and the majority of the comments were about the beauty of her teeth.

One commented, “That’s the smile for me.” Another commented: “At least he doesn’t flex like he has the racks. Even if he was buying earrings for $300,000. If you remember last month, Osiris published a $60,000 reward for his missing diamond earring, he lost. Osiris has not revealed whether the earring, which cost $325,000, has yet been found. Roommates, leave a comment and let us know what you think of the clip?!

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The post office YK Osiris Joking Receives $65,000 Debt Consolidation Check From Barstool Sports appeared first on The shadow room.

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Struggling With Debt? Four Ways a Debt Consolidation Loan Can Help You https://phuutthai.com/struggling-with-debt-four-ways-a-debt-consolidation-loan-can-help-you/ Tue, 11 Jan 2022 15:48:53 +0000 https://phuutthai.com/struggling-with-debt-four-ways-a-debt-consolidation-loan-can-help-you/ Views of the publication: 188 Personal debt in the UK has risen by £ 63.7 billion since September 2020, with the average household owing nearly £ 63,000 according to Charity of money. While most people think they can balance their finances, many feel overwhelmed, Citizens Advice currently deals with nearly 2,000 debt issues every day. […]]]>

Views of the publication: 188

Personal debt in the UK has risen by £ 63.7 billion since September 2020, with the average household owing nearly £ 63,000 according to Charity of money. While most people think they can balance their finances, many feel overwhelmed, Citizens Advice currently deals with nearly 2,000 debt issues every day. So it’s no surprise that many are looking for a way to take control of their finances. This is where a debt consolidation loan could be the solution.

A debt consolidation loan involves taking out a larger loan to pay off all of your other debt, leaving you with one more manageable repayment each month. It is often used to simplify finances and get borrowers on the right track if they are struggling to get their debt under control. Here are four ways they can help.

1. Speed ​​up your way to free yourself from your debts

It can be easy to get into the habit of paying only the minimum monthly payment on credit cards, usually just five percent of the outstanding balance. This means that it will usually take decades to clear the balance, while still being charged a hefty amount of interest along the way. You’ll also always have access to whatever credit limit you have left, leaving you at risk of continuing to spend on the card and never actually reducing what you owe.

Likewise, a lot of people go so far with their overdraft that sometimes, even after getting paid, they don’t make it. In this situation, it can be difficult to justify asking your bank to lower your overdraft limit if that leaves you in trouble for the rest of the month. Also, if you accidentally go over your authorized overdraft limit, most banks charge a penalty and a higher interest rate, making it a costly situation.

Consolidating your debt into one loan means you’ll have a fixed end date in sight, so you’ll know exactly when you’re debt free. Provided you can follow the repayment schedule, knowing when your debts will be paid off can be a huge relief from financial stress.

The interest rate charged is usually much lower than that of a credit card, and spreading repayments over time can mean those payments are lower and more manageable. However, there are usually fees associated with these types of loans and different providers charge different rates, so it pays to shop around.

To get an idea of ​​how much you might need to borrow and for how long, the experts at Loan.co.uk have a very useful debt consolidation calculator.

2. Only process one refund

If you manage multiple lines of credit, one of the things you will need to manage is multiple amounts and repayment periods. While this is often facilitated by setting up a direct debit for the amount you need to pay, you still need to make sure you have enough funds in your bank account to cover each transaction.

This is where many run into problems: either they do not have enough money to meet all the direct debits they have set up, or they have so many repayments to make at different times that they it’s easy to forget what you owe where. The problem with missed or late payments is that they usually come with a fee, on top of the interest you would usually pay, which further increases debt. Add to that the damage this causes to your credit score, and it’s not hard to see why multiple repayments can quickly become a serious problem.

A debt consolidation loan benefits from only one repayment, for a fixed amount, at the same time each month until it is repaid. It is common for people to set up a direct debit so that this payment is taken automatically from their bank account shortly after payday. This means that they can be confident that they can repay the right amount, at the right time, month after month.

Another benefit of having only one refund is that it makes day-to-day life more manageable. Without having to keep track of so much, it should be a lot easier to see how much disposable income you have each month and a lot less stressful on you and your finances in general.

3. Potentially get lower interest rates

Most debt consolidation loans will fall under the umbrella of “homeowners” or “secured” loans, which means that your home will be used as collateral against the amount you borrow. Because of this security, there is less risk for the lender, who will therefore be more likely to offer you better interest rates.

This can be especially useful if your debt is spread across multiple lines of credit. In particular, payday loans, overdrafts and some credit cards carry some of the highest interest rates. If you have just enough money to pay off the bare minimum on this type of credit, and the interest rates are high, it could take you decades before you can pay them off completely.

By getting a debt consolidation loan with a lower interest rate, you will find that more of the repayment amount will go towards debt reduction, rather than interest.

Keep in mind that you usually take out a debt consolidation loan for a longer period of time than an unsecured loan. Although the interest rates may be lower, you may be able to pay off more interest overall. However, it is often worth it if it makes everyday life much easier.

4. Improve your credit score over time

If you’re struggling to manage your debt and you’re likely to be late, or worse, miss your payments altogether, it could really hurt your business. credit rating. Any missed or late payments will be recorded on your credit report for six years, which means that even if you’ve been paying off your debt for a long time, you could still suffer the effects for years to come.

Also, if you repeatedly fail to keep up with your repayments, you may find that your lenders are taking extra steps to get their money back. This could include legal action, which could end up with you with a CCJ (County Court Judgment) or IVA (Individual Voluntary Arrangement).

These will also stay on your credit report for six years, but can make it nearly impossible to approve new lines of credit. While it might be best not to borrow more money while you are paying off your debt, it could also affect much more ordinary, everyday things like renting out a property and getting a mortgage. mobile phone contract.

Paying off your creditors and closing your accounts with them using a debt consolidation loan is a great first step in improving your credit score. Then, provided you can keep track of your repayments on your debt consolidation loan, you will demonstrate to lenders that you are a responsible borrower who can manage credit well, which can go a long way in improving your credit score.

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Best Debt Consolidation Options of 2022 https://phuutthai.com/best-debt-consolidation-options-of-2022/ Fri, 07 Jan 2022 08:00:00 +0000 https://phuutthai.com/best-debt-consolidation-options-of-2022/ Editorial independence We want to help you make more informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and allow us to earn a referral commission. For more information, see How we make money. Juggling debt from multiple sources can make your finances feel like the […]]]>

We want to help you make more informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and allow us to earn a referral commission. For more information, see How we make money.

Juggling debt from multiple sources can make your finances feel like the biggest puzzle in the world.

Debt consolidation can help organize those debts and monthly payments into something much more manageable. By streamlining your debts from different credit cards or lenders into one consolidated payment — especially if you get a lower interest rate in the process — you can jump-start your debt repayment success.

However, you need to be strategic about how you implement consolidation into your repayment plan. Choose a consolidation option that works with your credit score, matches your timeline and goals, and will help you establish healthy, long-lasting financial habits.

Choosing the Right Time to Consolidate

Before choosing a consolidation method, make sure you are at the right stage of your debt repayment journey to reap the most benefits. If you’re just starting out, your options may be limited.

“Often, if someone has maxed out or their credit has been affected, it can be difficult to qualify for many options,” says Katie Bossler, financial expert and quality assurance specialist at Greenpath Financial Wellness, a national non-profit organization that provides financial counseling services. “Or the conditions may not be favorable.”

This is all the more common as lending standards change in response to the economic downturn. Lenders and creditors reduce their own risk by being more selective about who they offer these options to, let alone who qualifies for the most favorable terms.

If your credit isn’t great today, start paying down your balances using standard best practices: pay more than the minimum amount due and start making additional payments when possible.

“As you pay down debt, your credit will likely increase accordingly, so these options may become available or be more favorable,” Bossler says. Once you are further along in the payment process and have improved your score through factors such as your positive payment history and low credit usage, your consolidation options may improve.

You should also consider the types of debt you want to consolidate and how you might approach your options differently. For example, credit card balances and high-interest personal loans can be consolidated, but you should generally only consolidate student loans with other student loans.

When you’re ready to consolidate, here are some options to consider:

Credit cards with balance transfer

Balance transfer cards offer zero percent interest introductory periods, usually between 12 and 18 months. After opening the card, you can transfer other high-interest debt balances for a fee and pay them off throughout the introductory period. As you do not accrue interest, each payment will go directly to the principal.

Jordanne Wells WiseMoneyWomen spent much of 2019 paying off $30,000 in credit card debt. She started by changing behaviors like adopting a strict budget, making regular extra payments, and automating her payment schedule.

But Wells, 34, says consolidating the balances of his most valuable cards onto a single balance transfer card was a key part of eliminating his debt.

“Instead of having five or six different cards that I was calling, it was just one big card. I could just hit it and do it.

But like everything else in 2020, balance transfers are getting trickier. Issuers not only pulled many of their best balance transfer offers, but they also tightened lending standards, so available cards are harder to get without great credit.

Pro tip

Whichever consolidation method you choose, be sure to save money by transferring your high-interest debt to an option with a lower APR. Over the course of paying off your debt, even a few percentage points in interest could add up to huge savings.

If you can qualify, always make sure you have a repayment plan in place before transferring your balance to a new credit card. If you are unable to repay a significant portion of your balance during the introductory period, you will only prolong your debt and may even pay more in the long run. In fact, some issuers retroactively charge interest back to the day you transferred your balance if you don’t pay the balance in full by the end of your introductory period.

Personal loans

Like a balance transfer, consolidation through a personal loan can help simplify your debt repayment by combining your debts into one standard monthly payment.

The best part? You can significantly reduce your interest. While credit card interest rates average around 16%, average personal loan rates are below 10%, according to the Federal Reserve (although terms vary, with the best rates going to those with the best credit). And since personal loan rates are often fixed, you don’t have to worry about your rate fluctuating over time.

Prepare to be proactive with paying off your debt if you choose a personal loan. Depending on the length of your repayment period, the amount you owe each month could be more than the minimum payment you’re used to paying on your credit cards, even taking into account the lower interest rate.

Before taking out a new loan, always make sure the repayment schedule matches what you are able to pay. Also, do your research to find a lender willing to give an interest rate lower than your current APR; you can get an interest rate as low as 6% with some of today’s best personal loan deals.

home equity

If you’re a homeowner, you may be able to use the equity in your home – what the home is worth minus what you owe – as a consolidation tool, through a home equity loan or home equity line. home equity loan (HELOC).

With a home equity loan, you can take out a lump sum, use it to pay off your high-interest debt, and then pay off the loan in standard monthly installments. A home equity line of credit acts more like a credit card; you can borrow against the line of credit as needed to pay off your other debts and then pay off the HELOC over time.

Like other consolidation methods, the best reason to consolidate by home equity is to score a lower interest rate (loans can be fixed, while HELOCs are often variable). Secured loans like these may also be more viable options for homeowners without great credit, as other consolidation methods generally require a good credit history.

But a home equity loan or HELOC can be risky. Because these are secured loans, using your home as collateral could risk foreclosure if you don’t pay. And since home equity loans are based on the value of your home, you could also risk owing more if your home’s value drops.

Debt management plan

If other consolidation options don’t work or you’re really overwhelmed with your debt balance, consider working with a nonprofit credit counselor on a debt management plan. These plans are designed to consolidate and reduce your monthly payments, whether your debt is from credit cards, personal loans, or even collection debt.

Always look for credible, non-profit credit counseling agencies such as those approved by the National Credit Counseling Foundation.

Credit counselors can help you negotiate the terms of your debt, lowering your interest rate and reducing your minimum monthly payments, often based on your discretionary income and the payments you are able to make each month . This could be a particularly useful option if you want to start paying off your debts, but are facing a period of financial difficulty.

“When you’re on a debt management program, you have that monthly payment and you know the debt will be paid off within that time frame,” says Bossler. Removing the pressure of arranging payments to different lenders on different dates throughout the month lets you focus on the other details that will help you pay off your debt, like streamlining your budget and cutting expenses.

Conclusion

Debt consolidation can be a great tool for paying off your debts, but you have to be smart about how you implement it. Take the time to work out the different types of debt you have and how different consolidation options can best align with what you can afford, your schedule, and your other financial goals.

“When you go through all of this, there’s not necessarily a right or wrong answer,” says Bossler. “It’s just a matter of evaluating the options available to you. Really understand the terms, the interest rates, what you’re getting into before you jump in.

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Is Debthunch’s 0% Interest Rate Offer a Debt Consolidation Scam? https://phuutthai.com/is-debthunchs-0-interest-rate-offer-a-debt-consolidation-scam/ https://phuutthai.com/is-debthunchs-0-interest-rate-offer-a-debt-consolidation-scam/#respond Thu, 07 Oct 2021 11:34:18 +0000 https://phuutthai.com/is-debthunchs-0-interest-rate-offer-a-debt-consolidation-scam/ Editorial credit: Gearstd Debthunch looks like a bait and switch debt consolidation loan scam. Debthunch has flooded the market with offers of 0% APR debt consolidation and personal loans in the mail. The problem is, the terms and conditions are confusing, if not suspect, to say the least. The interest rates are so low that […]]]>


Editorial credit: Gearstd


Debthunch looks like a bait and switch debt consolidation loan scam. Debthunch has flooded the market with offers of 0% APR debt consolidation and personal loans in the mail. The problem is, the terms and conditions are confusing, if not suspect, to say the least.

The interest rates are so low that you would need near perfect credit to be approved for any of Debthunch’s debt consolidation offers. “This is nothing new,” according to Ed Miles of Crixeo, “Low APR debt consolidation offers through the mail are about as old as the US Postal Service.”

According to an industry insider who has chosen to remain anonymous, “Debthunch is just a middleman. The companies they sell leads to are the real bait and switch artists. But Debthunch knows that they sell most of their leads to debt settlement companies, not to real lenders.

If you are drowning in the deep sea of ​​student loan payments, medical bills, credit card debt, or auto loans, you may be looking for a life jacket to help you. However, did you know that debt consolidation can make paying bills an organized and easy process by consolidating multiple high interest debts into one payment? So, if you are looking for a way to balance your unpaid debts and keep track of your payments, debt consolidation will allow you to manage it. Read on to learn more about debt consolidation, its pros and cons, and how debt consolidation will work for you.

Is Debthunch's 0% Interest Rate Offer a Debt Consolidation Scam?  1

The process of debt consolidation can be defined as the combination of two or more payments into one larger debt. The approach is often used by consumers who are struggling with multiple loans at the same time. This makes it easier to keep track of your payments, but debt consolidators usually get a lower interest rate on their credit cards.

How Does Debt Consolidation Work?

When a person opts for debt consolidation, they combine all of their monthly bills or loans into one debt, so instead of making several small payments, you only need to make one payment per month. Plus, the new consolidated debt loan is usually at a lower interest rate, which can be beneficial to you in the long run.

DebtHunch Debt Consolidation vs. Debt settlement

Both debt settlement and consolidation prove to be beneficial in improving loan repayment. However, the two work differently. When debt consolidation reduces the total number of creditors, debt settlement will help you reduce the total loan amount you owe. Read on to find out more about the approach you should go for.

Debt consolidation

In addition to making your life financially easier, debt consolidation also benefits you psychologically. Combining all of your payments into one lump sum takes the stress out of managing multiple payments each month. In addition, it is also possible that consolidating your debts will reduce the overall average interest rate on your debts. For example, if you previously juggled five loans at a time, that means you had to pay variable interest on each loan. However, opting for debt consolidation will result in a single interest rate each month.

Debt consolidation can be subdivided into two broad categories: secured and unsecured debt consolidation loans. The secured loan requires you to use one of your assets as collateral. This means that if you take out a home equity loan, your property papers will secure the loan.

Debt settlement

On the other hand, debt settlement requires you to ask your creditors to reduce the amount of debt that you are supposed to pay. If you and your creditor reach a settlement, all you have to do is pay the new amount either in installments or in one lump sum. One of the main benefits of debt settlement is that it allows you to reduce the total amount you owe.

However, you should know that creditors have no legal obligation to accept or even participate in debt settlement negotiation. Additionally, suppose you opt for debt settlement. In this case, it is essential to have the amount of the offer on hand in order to be able to close the deal easily. It has been suggested that creditors should only consider debt settlement if payments are significantly overdue.

If you’re struggling with recent loans or don’t have enough cash on hand, consider debt consolidation over debt settlement.

Pros and Cons of Debt Consolidation

There is a high likelihood that the amount you owe will increase over time, especially if you own a credit card or have multiple loans to pay off, each with specific terms, balances, and interest rates. You should try to combine them all into one easy to manage payment. The advantages of debt consolidation are as follows:

  • Allows you to pay off debt sooner.
  • Simplify your finances.
  • The consolidated debt amount has a fixed repayment schedule.
  • Boost your credit.
  • Consolidating your debt lowers the overall interest rate.

However, like everything else, even debt consolidation has its drawbacks. Below are the downsides you should consider before taking out a consolidated loan:

  • It will not solve your financial problems.
  • Debt consolidation can have initial costs; this includes annual fees, closing costs, balance transfer fees, and loan origination fees.
  • You may have to pay a higher rate.
  • Missed payments will slow you down and cost you more.
  • Debt consolidation will not reduce the total amount of your bills.

Is debt consolidation a good idea?

Debt consolidation can be a wise financial decision if you are trapped under the burden of loans. It can help you simplify your payments to a single amount. However, you should only consider going for debt consolidation if you have significant debt or are planning to improve your financial situation and are looking for a quick fix. On the other hand, consolidating your debt is also ideal if your credit amount has increased until the total interest on a consolidated payment is lower. Finally, you should only opt for debt consolidation if you have reliable cash to cover your monthly payments.

Before you start consolidating your debt, your goal should be to create a plan to help you pay off your loan early. However, you must also qualify and get approved for a lower interest rate. If you can’t control your financial balances and you tend to go up, credit debt consolidation might not have a major effect on your finances. A person who opts for debt consolidation should be someone who can keep control of future debt for a financially stable future.

Wrap it all up!

Do the math and only consider consolidating debt if it saves you money and benefits you financially in the long run. The most important thing to remember is that debt consolidation does not decrease your credit payments; it only helps you to repay them on favorable terms.


William Wrigley Jr.


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What is debt consolidation? | The bank rate https://phuutthai.com/what-is-debt-consolidation-the-bank-rate/ https://phuutthai.com/what-is-debt-consolidation-the-bank-rate/#respond Tue, 28 Sep 2021 07:00:00 +0000 https://phuutthai.com/what-is-debt-consolidation-the-bank-rate/ Even if you work hard to manage your money the right way, paying off high-interest debt each month can make it difficult to reach your financial goals. No matter how much you owe, it can take months, or even years, to get out of debt. One way to handle multiple debt payments is to consolidate. […]]]>


Even if you work hard to manage your money the right way, paying off high-interest debt each month can make it difficult to reach your financial goals. No matter how much you owe, it can take months, or even years, to get out of debt.

One way to handle multiple debt payments is to consolidate. Debt consolidation is a form of money management where you pay off existing debt by taking out a new loan, usually through a debt consolidation loan, a balance transfer credit card, or a debt consolidation loan. ” refinancing a student loan, a home equity loan or a HELOC. Here’s what you need to know about debt consolidation and which method might be right for you.

Definition of debt consolidation

Debt consolidation is the process of merging multiple debts into one debt. Instead of making separate payments to multiple credit card issuers or lenders each month, you consolidate them into one payment from a single lender, ideally at a lower interest rate.

You can use debt consolidation to merge several types of debt, including:

  • Credit card
  • Medical debt
  • Personal loans
  • Student loans
  • Auto loans
  • Payday loans

While debt consolidation won’t erase your balance, the strategy can make paying off debt easier and cheaper. If you get a low interest rate, you could save hundreds or even thousands of dollars in interest. Managing a single payment can also make it easier to control your bills and avoid late payments, which can hurt your credit.

Types of debt consolidation

No matter what type of debt you are consolidating, if you are looking for how to consolidate debt, there are a number of options to choose from.

Debt Consolidation Loan

Debt consolidation loans are personal loans that combine several loans into one fixed monthly payment. Debt consolidation loans generally have terms of between one and 10 years, and many of them will allow you to consolidate up to $ 50,000.

This option only makes sense if the interest rate on your new loan is lower than the interest rates on your previous loans.

Best for: Borrowers who want a fixed repayment schedule.

Balance Transfer Credit Card

If you have more than one credit card debt, a balance transfer credit card can help you pay off your debt and lower your interest rate. Like a debt consolidation loan, a balance transfer credit card transfers multiple streams of high interest credit card debt to one credit card with a lower interest rate.

Most balance transfer credit cards offer an introductory 0% APR period, which typically lasts 12 to 21 months. If you can manage to pay off all or most of your debt during the introductory period, you could potentially save thousands of dollars in interest payments.

However, if you have a large unpaid balance after the period ends, you might find yourself in more debt later, as balance transfer credit cards tend to have higher interest rates than other forms of credit. debt consolidation.

Best for: Borrowers who can afford to pay off their credit cards quickly.

Student loan refinancing

If you have high-interest student debt, refinancing your student loans could help you get a lower interest rate. Student loan refinancing allows borrowers to consolidate federal and private student loans into one fixed monthly payment on better terms.

While refinancing can be a great way to consolidate your student loans, you will still need to meet the eligibility criteria. Plus, if you refinance federal student loans, you’ll lose federal protections and benefits, like income-tested repayment and deferral options.

Best for: Borrowers with High Interest Private Student Loans.

Home equity loan

A home equity loan, often referred to as a second mortgage, allows you to leverage the equity in your home. Most home equity loans have repayment periods of between five and 30 years, and you can typically borrow up to 85% of your home’s value, less any outstanding mortgage balances.

Home equity loans tend to have lower interest rates than credit cards and personal loans because they are secured by your home. The downside is that your home is at risk of foreclosure if you don’t pay off the loan.

Best for: Borrowers with a lot of equity in their home and a stable income.

Home equity line of credit

A Home Equity Line of Credit (HELOC) is a home equity loan that acts like a revolving line of credit. Like a credit card, a HELOC allows you to withdraw funds as needed with a variable interest rate. A HELOC also taps into the equity in your home, so the amount you can borrow depends on the equity in your home.

A HELOC is a long-term loan, with an average withdrawal period – the period during which you can withdraw funds – of 10 years. The repayment period can be up to 20 years, during which time you can no longer borrow against your line of credit.

Best for: Borrowers with a lot of equity in their home who want a long repayment period.

How to consolidate your debt

If you are trying to figure out how to consolidate your debt, the process is quite similar no matter what form of debt consolidation you use. It is important to understand that debt consolidation is different from debt settlement. With debt consolidation, you will use the funds from your new debt consolidation loan to pay off all of your existing debt in full.

Once you have secured the funds for your personal loan, home equity line of credit, or any other debt consolidation loan, you can begin the debt consolidation process. Use these funds to pay off all of your existing debts. You will then have only one monthly loan payment, generally with an interest rate lower than all the interest rates of your previous loans.

Pros and Cons of Debt Consolidation

Debt consolidation is not the right choice for everyone; Before consolidating your debt, consider the pros and cons.

Advantages

  • Pay less total interest. If you can consolidate multiple debts with double-digit interest rates into one loan with an interest rate of less than 10%, you could save hundreds of dollars on your loan.
  • Simplify the debt repayment process. It can be difficult to keep track of multiple credit card or loan payments each month, especially if they are due on different dates. Taking out a debt consolidation loan makes it easier to plan your month and control your payments.
  • Improve Your Credit Score. You might see an increase in your credit score if you consolidate your debt. Paying off credit cards with debt consolidation could lower your credit utilization rate, and your payment history could improve if a debt consolidation loan helps you make more payments on time.

The inconvenients

  • Pay the upfront fees. Any form of debt consolidation can incur fees, including origination fees, balance transfer fees, or closing costs. You’ll want to weigh these fees against the potential savings before you apply.
  • Put guarantees at risk. If you are using any type of secured loan to secure your debt, such as a home equity loan or HELOC, that collateral is subject to foreclosure in the event of late payment.
  • Could increase the total cost of debt. Your savings potential with a debt consolidation loan largely depends on how your loan is structured. If you have a similar interest rate but choose a longer repayment term, for example, you will ultimately pay more interest over time.

When debt consolidation is a good decision

Debt consolidation works best when the debt you have incurred is primarily from a past situation that no longer applies to your life. Examples could include past medical debts, student loans, or debts that you racked up before taking control of your life.

In this case, debt consolidation can make a lot of sense. You can take those existing debts that often come with high interest rates and combine them into one monthly payment. You may also qualify for a lower interest rate, especially if you are using a secured loan such as a home equity loan or home equity line of credit.

When you shouldn’t be considering consolidating your debt

Debt consolidation can help you save money on interest and pay off debt faster, but it doesn’t solve the underlying reason for your debt. Before consolidating, consider the internal and external factors that led to your current situation.

It’s possible to consolidate debt if you’ve been through debt consolidation before, but it’s not ideal. Debt consolidation works much better when you have corrected the underlying reason why you got into debt in the first place. Making sure these root causes are addressed will help make debt consolidation a successful experience for you.

Key points to remember

If you are interested in debt consolidation, make sure you consider the underlying reasons for how you got into debt. If you are in a more stable situation but have debt earlier in your life, then debt consolidation can make a lot of sense. Take the time to consider all of your options and get quotes from several lenders, including credit unions, online banks, and other lenders. Compare interest rates, fees and terms before finalizing your decision.

Learn more:


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