Low Interest Bill Consolidation
Low interest bill consolidation can help people buried under a mountain of ever-increasing debt get back on their feet again. High rate credit cards, loans with fluctuating rates, and dozens of creditors sending monthly bills and demanding payments can frustrate the calmest of individuals. Reorganizing these debts under one loan with one solid rate and one monthly payment provides a way for many individuals to better manage personal debt. Rates are generally lower than the average rate of current bills. Installments are smaller, giving consumers the opportunity to use surplus funds to reduce debt even further. Low interest bill consolidation is convenient and can give great hope to those in despair.
Credit card debt, student and car loans, as well as debt attached to high rates can all be consolidated into one account with a lower rate. Low interest bill consolidation generally comes in two types. Secured loans are based on collateral, an item that is used to ensure repayment of the amount borrowed. If the debtor defaults or doesn't pay back what is owed, the collateral is taken. Secured contracts generally come with lower rates because they are secured. Unsecured consolidation loans usually have higher rates but still lower than credit card rates. Without the security of collateral, individuals must have good credit to be approved. The higher a consumer's credit rating, the lower rate he or she can qualify for. However, regardless of the loan type, low interest bill consolidation doesn't reduce personal debt. It simply combines debt under a lower rate that is more management for the consumer. Because payment terms are usually longer, even with lower rates and installments, the final payout amount could be greater than the initial pre-consolidated debt. Plus, some creditors will add additional fees to compensate for what they lose in lower interest or charge penalties for early payoff. In some cases, it could be worth a higher rate to avoid such penalties.
Some of the best options for low interest bill consolidation are through home equity. Home equity loans tend to carry the lowest interest rates of any loan type. Those rates are often tax-deductible up to $100,000. There are several options for consumers who have built up enough equity in their homes to use for personal debt repayment. Since rates are fixed, refinancing a home can actually reduce the rate on a home mortgage, if timed right, as well as outstanding debt. The debt is rolled into the mortgage. This could result in higher mortgage installments, plus additional closing costs. These fees can outweigh the amount saved on interest. Consumers can also take out a second mortgage loan to repay debts. Payments and rates are also fixed. Payoff terms range between 10 and 30 years, and there is no prepayment penalty. Thirdly, home equity lines of credit are open lines of credit that can be used over and over again as the balance is paid down. Lines of credit have very low variable rates and a draw period of 5 to 10 years. However, early termination of a line of credit does result in a penalty fee. In all of these cases, an individual's home is used for collateral. Defaulting results in the loss of a home. In addition, consumers with little equity built up could have difficulty selling a home or if they do sell, could be stuck with an even larger debt.
Individuals with good credit can take advantage of special credit card offers as a type of low interest bill consolidation. Many credit cards will offer low introductory rates for transferred debt. If used properly, these offers can help consumers greatly reduce their debt load. However, financial advisors warn them to use these offers with caution. Offers are usually only good for a limited amount of time - usually six or twelve months. Once it expires, resulting rates can be quite high. If payments are missed or late, high fees are charged. These card offers also have a lot of conditions, so consumers must read the fine print before choosing this option. Plus, new credit cards can tempt consumer to purchase even more. "There hath no temptation taken you but such as is common to man: but God is faithful, who will not suffer you to be tempted above that ye are able; but will with the temptation also make a way to escape, that ye may be able to bear it." (1 Corinthians 10:13) Before taking this option, check with current credit card companies to see if their rates can be adjusted. Many companies will negotiate rates to keep customers around.
Consumers have many other options to take advantage of as well. Hiring a professional who specializes in low interest bill consolidation can be helpful. These services set up a new loan with a lower rate and one monthly payment that is comfortable for the consumer. Debt management counselors help people in debt by negotiating with creditors to reduce the total amount of debt. The consumer pays one installment to the counselor who then pays all the creditors. However, the consumer remains responsible, even if the counselor makes a late payment. Credit ratings will drop and it can do more harm than good. Individuals can also borrow against their own retirement accounts with no pre-qualification or credit checks required. Rates are generally low and are paid right back into the account. Be careful to borrow against the account. Withdrawing from the account is subject to a 10% penalty, and if the borrower loses his or her job, the amount must be paid immediately. Low interest bill consolidation can be a great way to repay outstanding debt, but each option must be weighed carefully to make sure it doesn't end up costing the consumer more than the original debt. The goal is to get out of debt, not pay more. Always compare the final payout amount of several options before deciding on a final plan of action.
Consolidation Loan Not Owning A HomeA debt consolidation loan without owning a home permits non-homeowners to take all of their outstanding bills and overdue balances and consolidate them into one large lump sum, with no need for a home as collateral. The beauty of this option is that the same consolidation loan is available if someone is in debt and has a desire to get their finances back in order even if they don't own a home. If they would like to reduce the interest charges on their credit cards or personal loans by consolidating into one lower monthly payment, they can easily find a program that will cater to their personal needs.
Those who want to see if they qualify for consolidating can do an Internet search of all the programs available to non-homeowners. By submitting some requested financial information, anyone can find out exactly what kind of program is recommended and how much money could be saved with the debt consolidation loan without owning a home. Those who want to eliminate late and over limit fees, stopping the harassing calls of bill collectors, should apply for consolidating. Some loans even request a reduction of balances due from creditors.
Consolidation offers more than just financial help. Learning how to control spending and curb credit use can go a long way toward changing the financial habits that may have gotten one into too much debt in the first place. The educational and life-changing aspects of credit counseling can be worth the price of the whole program. The benefits of a debt consolidation loan without owning a home are far more than just the loan, so debtors need to find the right consolidation company. These are numerous and available both locally and online. It's best to find a company that is known and reputable, but also offers little to no fees and low interest rates. It is also important to make sure the company has no complaints on file.
Consolidating can bring a whole new perspective to one's ideas about money and finance. First Samuel 22:2 says that everyone in debt is distressed and discontented. Making wise financial choices can get people out of the vicious cycle of debt and poverty and bring them contentment and peace in life. Debt consolidation loans take all credit cards and personal loans and pay them off by sending one payment to a professional that divides it between all the creditors and lenders. A debt consolidation loan without owning a home can change the way anyone views money forever.
A debt consolidation loan with bad credit, contrary to popular belief, is available with or without securing the loan with home equity or any other types of collateral. In fact, if the debtor has good references and stable employment, they should qualify for a debt consolidation loan with bad credit. The severity of current debt, reasons for bad credit and salary determine what amount loan the debtor will qualify for. The other alternative would be to pledge a home, a car, a boat or anything else that has value as security of loan repayment.
Finding the best option for each individual situation can be done through meeting with a financial advisor. A consolidation loan with bad credit can actually improve a credit score after having regular payments made for at least 6 months. If there is no prepayment penalty, the debtor should make extra payments to the principle amount as often as possible. This will reduce the amount of interest being paid on the loan. Once the loan is paid off, in addition to the previous debts being paid off, the debtor will see a substantial improvement in his/her credit score. Credit scores determine insurance rates, rental deposits, and sometimes employment.
The goal to reduce and eliminate debt to raise a credit score should be a high priority on everyone's list. Something as simple as a debt consolidation loan with bad credit can improve an individual's personal financial portfolio tremendously. Before deciding on any organization, be sure to check the BBB or Better Business Bureau for the company's overall rating and to see a list of complaints or compliments from previous clients. Caution is recommended for debt consolidation loan with bad credit businesses that don't require detailed income and financial information from the debtor.
In order to effectively provide a realistic budget lifestyle plan for eliminating debt and controlling spending, the company will have to know extensive knowledge about a consumer's financial history. If a company does not require this important information, find out why. Decide for how they could best serve the current needs. It is better to be on the safer side when it comes to financial livelihood and future. Psalm 37:4 says Delight thyself also in the LORD: and he shall give thee the desires of thine heart. It is wise to consider the direction of God's guiding when it comes to our financial matters. He will provide beyond anyone's wildest dreams.