Debt Consolidation Loans Offers Financial Relief

February 7, 2009

Making use of debt consolidation loans means that you will be able to consolidate all your various loans and accounts into one account. This means that instead of having multiple loans to pay at the end of the month, you only have one loan from one lender to pay.

Replacing several loans with one consolidation loan will also save you on costs associated to loans, such as monthly admin fees, annual fees and bank charges for multiple payments. Even though debt consolidation loans are a good solution for most individuals, do some research before you go ahead and apply, just to make sure that it is the best option for you.

It is very popular to make use of a second bond on ones property to use for consolidation. This means you are making use of the equity that has been built up during the years that you have been servicing your home loan. Using this option has a lot of advantages, and will give you some financial relief. A home loan will offer you both a lower interest rate and a longer loan term.

Even though the longer loan term means you will pay less every month, it is strongly advised to use some of the extra cash you now have available to pay off your debt consolidation loan. The longer the term of the loan is the more interest you will pay. So by paying more than the minimum instalment will reduce your debt faster, and will save you even more in the long run.

Always shop around before you make a decision. Many lenders will make money from adding on insurance which is not really necessary. By shopping around you can avoid making decisions that will cost you unnecessary money. A lot of these mistakes can be avoided by making use of the services of professional bond brokers.

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Consolidate Debt – A Pain or A Painkiller?

February 7, 2009

We are living in a time when most people are trying to save a cent wherever they can. It is also a time when many are trying to consolidate debt that they have incurred during previous, more prosperous years. However, some consider it too much work to go through the process, and it’s just not worth it.

While it is true that it takes both time and effort, debt consolidation might be the answer to your financial headaches. Let’s look at some of the benefits:

1.    Instead of having several loans to pay at the end of each and every month, you only have to pay one. This will save you a lot of time and effort. You don’t have to keep track of various due dates or minimum balance requirements. This means less to worry about.

2.    Since you now only have one account to pay every month, it will be much easier to draw up a comprehensive budget, and it will be easier for you to plan your finances. When you have several loans to pay during the month, it’s very likely that they have very different due dates. So one or two loans must be paid the first week. Some the second week, and yet some others the third week.

This means that the money that is reflecting in your account is not really yours. It’s definitely not yours to spend as you wish, because you have loans to pay, and you need to make sure there is enough money left.

With all your accounts consolidated into one account, you pay it once, and then you are done. The money that is left in your account is yours to spend as you please.

3. One major benefit is the fact that the interest rates are half to one-third of the interest charged on revolving credit card accounts. The difference between the two is that your debt consolidation loan is a secured loan (home loan) and not an unsecured loan (credit card, personal loans, etc). This will mean a great reduction in interest rate and longer loan terms. The result will be lower monthly payments, which means you will be able to work with cash instead of credit in your daily life.

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Debt Consolidation – Where to Start?

February 7, 2009

With the global economy in an absolute turmoil, many are finding themselves in a bit of a predicament. To prevent their creditors from repossessing their house or car, some are desperately looking for debt consolidation. This can be a daunting project, as many are turned down, and tend to lose hope. So what are the options, and where do you start?

First, sit down and go through all your finances. Draw up a comprehensive budget. Sometimes this can give you a wake-up call as to where a lot of money disappears to during the month. Cut down on luxuries, at least until you are on your feet again. A lot of us are finding ourselves in the situation where every little bit extra will help.

Now that you are fully aware of your financial situation, calculate how much you need to be able to settle enough debt to have a sufficiently better cash flow.

If you are a home owner, you have could have one big advantage – property equity. If there is a positive difference between the value of your property and your existing home loan, you might be able to unlock these funds to use for consolidation of other debts.

But you might wonder, is it really wise to just replace one debt with another?

Well, if you are reading this article, it’s very unlikely that you are able to pay your bills comfortably, so you need to try to get to a position where you can afford all your commitments at the end of the month. Since your home loan is the “cheapest” kind of debt you can have, you are more likely to be able to service your commitment. So if you can use the equity in your property to settle all your other debt, or even just some, you will have a lower repayment at the end of every month.

If you are planning on using your property as the tool to consolidate your debt, the best is to let a professional assist your during the process.

If you’re not a home owner, you would have to look in a different direction. Some will opt for a larger personal loan to settle other smaller accounts. The aim is still to have as few repayments as possible at the end of the month.

The goal with debt consolidation is to increase your cash flow sufficiently that you can use cash instead of credit. By doing this you will avoid incurring more debt. You might even be able to pay of your debt faster than required.

If you are a home owner and would like to find out more about debt consolidation, or to get a quote based on your finances, apply online, and one of our friendly consultants will contact you.

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