Debt Consolidation Loans – Are They Really Obtainable?

February 11, 2010

Debt Consolidation Loans have been talked about for a while now.  Are they worth pursuing or not?

If you consider that debt consolidation loans are much cheaper than conventional debt, then I have to say yes, go for it.

Remember, debt consoldiation loans only work if they are taken on a home loan.  Why?  Well, because your home loan is the cheapest form of debt you will have available.  The interest rate (at worst) is 10.5%, whereas credit cards are close to 20% and personal loans and other accounts are in exess of 25%, so as you can see, doing debt consolidation can save you a ton of money in interest.

Another positive is that you’ll be able to plough the savings back into your bond, which means you’ll pay it off quicker.

If you don’t do that the consolidation is just a quick fix and you’ll be paying off the credit cards and loans over 20 years.

So, when considering debt consolidation loans be sure that you’ll be disciplined enough to take the amount that you’ll be saving each month and putting it back into the bond.

You’ll have less stress and only 1 debt to pay…….relax.

For more information on debt consolidation loans don’t hesitate to contact us.

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Season for Debt Consolidation

December 31, 2009

Have you found that you have been over-spending this festive season?

If you’ve answered no, you’re one of the lucky few, but if you’ve answered yes there is a solution.

Let’s help you consolidate all those credit cards and personal loans into your home loan.

If you have equity in your property and you qualify on your income, we can help you to consolidate your debt and ease the financial burden experienced by many on a monthly basis.

Taking a debt consolidation loan on your bond of R100 000 could mean a saving of approximately R5000 pm on other debts.

Think about that and then contact us:  http://www.globalproperty.co.za/contactus.html


The Basics of Credit Scores and Credit Approval

August 19, 2008

Credit scores are one of the most important factors that lenders consider when someone applies for a loan. An individual’s score is considered to be an indicator of his or her creditworthiness.

The higher your score, the easier it is to get approved for a loan or credit card. It is possible for individuals who don’t have great scores to obtain financing and credit cards, but they are considered to represent greater risk. The terms under which their accounts are approved are not as favorable as those of individuals who have higher credit ratings.

Factors Impacting Credit Score

Many different issues impact your score. It is possible for individuals who have little or no debt to have lower credit scores than those who carry significant amounts of debt. Factors that are used in calculating an individual’s score include: the amount of revolving credit currently available to the individual, the person’s history of making payments on current debt, and how much debt he or she is currently carrying.

Verify Credit Report Data

If you’re planning to apply for a loan or charge card account in the near future, it’s a good idea to pull a copy of your credit report to make sure that it is completely accurate. If you find errors on your credit report, you should contact both the reporting agency and the company reporting the information.

It is not uncommon for errors to show up on credit reports. However, a lender isn’t just going to trust you about reporting errors. In order to improve your score, you will have to get the errors fixed. It takes time to get erroneous information removed from your credit history, so it’s a good idea to check your credit report at least once each year.

For more eye opening reports on Debt Consolidation, Credit Card Debt etc, please visit Zulika’s site on www.globalproperty.co.za


Budgeting and Debt

July 22, 2008

If an ounce of prevention is worth a pound of cure, then preventing oneself from getting into debt should be on top of the list for any responsible consumer.

But it isn’t, and the statistics are shocking: in SA alone consumer credit to households is estimated at R760bn. There are a staggering 80,000 judgments for debt per month.

 Other countries experience the same problem and US households for example have around $50,000 average overall debt and UK households slightly less.  Everywhere, an increasing number of borrowers are growing increasingly concerned about their capability to manage their debts.

Getting On Better Terms with Debt

If you happen to be one of the people saddled with debt and are looking for a way to get out of it, you need not despair. You’re not alone and there have been people in situations similar to yours (or even worse) that have been able to reduce or eliminate their debt problems.

There are several ways of dealing with your debt: depending on your case, you can renegotiate your terms with your creditors. Or you could consolidate all your debts through a debt consolidation company and reducing your monthly debt payments.

All of these methods of dealing with your debt rely on one simple premise: the debtor must be generating some excess money with which to pay back the loans.

This is where many people get into trouble, because they either don’t know how to budget their money or refuse to confront their financial situation fully.

 Companies that are in the personal loan management trade usually have some sort of budgeting service for their customers. One can even find free budget planners and worksheets online. For people struggling to pay back what they owe (and even the lucky ones who don’t need to worry about such a thing), it’s fairly simple.

Budgeting

First you have to set aside time to formulate your budgeting plan. You can work with a budgeting application on your PC, or just use pen and paper—the main thing is that you get it done.

You need to add up your monthly expenses. Rent, food, fuel, subscriptions—itemize everything as accurately as you can. Afterwards, compare the resulting amount to your net income (after taxes and whatever other deductions you incur, such as maintenance, child support, etc.).

 If you have money left over after all the expenses have been deducted from it, then you have positive cash flow and can now start to plan about applying that towards your debt reduction. If you don’t have money left over, or worse, find that your expenses are greater than your income, then your only choice is to make some changes in your life so that your income is greater than what you spend.

 This means cutting on your spending whenever and wherever you can, getting a new job, etc. The reward after all this is getting back control of your finances and your life.

Zulika van Heerden provides valuable information on her site on how to live a debt free life. To read more tips and techniques like the ones in this article go to: http://www.globalproperty.co.za


Characteristics For Consolidators

July 17, 2008

Strictly speaking, you are taking out a form of a loan when you consolidate your debts. That means that when you look for a debt consolidation program, you still look for the characteristics that you would consider in a regular loan – terms, deadlines and interest rates, for example.

 

But given the sheer number of competing companies that offer different debt consolidation programs, you now have to consider characteristics that go way beyond the basics. Knowing and looking for these characteristics can make the difference between salvation from debt and sinking into even more debt.

 

Good Enough to Be False

 

Knowing about what to look for in a debt consolidation company isn’t just about comparing for the best rates anymore. It’s now a factor in protecting yourself from getting scammed of your hard-earned money.

 

Be wary when a company promises you free debt consolidation or a debt consolidation program without any fees. Those are either scam operations or quicksand loans; they suck you right up with all their preposterous hidden charges and fees. Don’t fall for a ‘free’ pitch because they’re rarely a real road to salvation from debt, if a road at all.

 

Other red flags are packages that have high rates, a short term, high upfront fees, high late fees and penalties when you pay too early. A combination of two or more of those characteristics (though one would suffice) is a clear signal that you probably shouldn’t get that package.

 

When an offer sounds too good to be true, an old saying says that it most probably is. This rings even more true in this case where you’re dealing with your own money and trying to solve a big problem. It’s pointless to try and get yourself out of a fix by getting yourself into another one because you took a risk with one such ‘free consolidation’ company.

 

Getting the Good

 

What would make a good debt consolidation company?

 

Credibility and a good history with customers should come as one of your top qualifiers. Try looking for a debt consolidation program from well-known banks and institutions. You can ask the institution itself for references or people from whom you could ask feedback. If the company is truly credible, it should be able to provide you the names of certain people you could ask about them. Of course, if location is a problem, internet searches and calls to consumer groups would also suffice.

 

Another thing that the company should be able to give is transparency and professionalism. That means they should give you all the costs and available options from the get-go. You can easily see this when you inquire and ask for a session with a professional. If they present you with a list of all mandatory and optional, that’s a good sign for the company. The professional or the staff should also be able to answer your questions regarding possible situations, such as if you are suddenly unable to pay regular fees.

 

The secret to getting a good debt consolidation program isn’t to just look for the program but to look for the right company as well. It’s them, after all, who will be handling all matters regarding your debt consolidation plan.

 

Zulika van Heerden provides valuable information on her site on how to live a debt free life. To read more tips and techniques like the ones in this article go to: http://www.globalproperty.co.za


Are There Risks In Debt Consolidation ?

July 11, 2008

Debt consolidation seems as an easy solution to reduce a person’s debt burden, but it has its own advantages and disadvantages.

A substantial number of people nowadays get themselves into so much debt that they sometimes have to go further into debt in order to pay it. This fighting-fire-with-fire approach, if misunderstood or misused, can lead to further debt problems instead of helping to solve them.

What is Debt Consolidation?

In a nutshell, it involves taking out a single loan (secured or unsecured, depending on the package offered) to settle all his or her numerous other loans.

Instead of having to make multiple payments, you only have to manage a single payment. You do not have to run around each and every month stressing about paying your creditors on time. This will simplify your finances and your life and you will have more time to spend with family and friends

Advantages

Consolidating your debt offers several advantages. For one thing, it’s often easier to make a single payment than trying to remember what to pay off when—some people are just not that good at remembering and scheduling payments.

The convenience offered by such a loan can also offer peace of mind to a person. This will simplify your finances and your life for that matter.

 The debtor can also benefit by the advantages of paying off a lower interest rate presented by one single loan, instead of having to pay off the interest of many high interest loans.

Pitfalls

Naturally, when you consolidate your debt it has its own set of risks. One is that your credit rating initially takes a hit when you initially consolidate your debt—it is taking out another loan, after all, and essentially zeroing out any progress the person has made paying off the other debts.

Another is that consolidation loans might not offer interest rate advantages over individual loans, because people who have been paying off their loans for a long time can often renegotiate their terms with their creditor, and these might be lower than the interest rate offered by the company that’s going to consolidate your debt

Still another is that the debt refinancing plan can fail if the person doesn’t make some changes to curb his or her spending and save more money. Debt consolidation is a drastic step to take, a fact some people don’t seem to understand. Some see their credit card balance or their loan read “R0” and takes it as carte blanche to keep right on spending and spending.

In this situation, the new loan can act merely as a sticking-plaster on a serious wound—halting problems temporarily but doing nothing to remedy the underlying situation. If the person who took out the debt consolidation loan should then be unable to repay it—for example, they need the money due to a family emergency—they would find themselves in more trouble than they were at the start.

Zulika van Heerden provides valuable information on her site on how to live a debt free life. To read more tips and techniques like the ones in this article go to: http://www.globalproperty.co.za


Low Maintenance Debt Consolidation Loans.

June 23, 2008

Debt consolidation is the process of combining different loans (they may be of different types, with different balances, from different banks, with different terms, and with different Variable Percentage Rates or VPR) into a single loan.  This requires applying for a new loan, using the  funds obtained from that loan to pay off the existing loans and then maintaining (i.e. keeping payments current) on the new loan.

 

Some would say debt consolidation involves too much work.  It means tons of paperwork, negotiations, credit checks, and all other things that applying for a loan requires.  Debt consolidation, furthermore, requires paying debt consolidation service charges.  Are all the effort and the fees worth it?

 

Certainly; debt consolidation has many benefits.  The following are only a couple of the major ones:

 

Low Maintenance

Debt consolidation means you only have one instead of several loans.  This means easier maintenance of all your financial obligations.  Just think about it.  Which is easier:  rushing off to pay three or four separate loans monthly – all with their own due dates and minimum balance requirements – or paying only one loan each month?

 

Debt consolidation means you will no longer have any difficulty keeping track of your loan obligations.  You will no longer send a check mistakenly to Bank A when it was Bank B that needed urgent payment.  Through debt consolidation, you only need to wait for one bill and mark one due date on your calendar.

 

Better Budgeting and Planning

Isn’t it difficult to stick to your budget when bills are always due?  If you have several loans, you are probably dealing with multiple due dates.  Perhaps one loan is due in the first week, another in the next, yet another in the third week, and one more in the last week.  Meanwhile, your monthly salary only comes once or twice a month.

 

How then will you be able to pay off those bills that come too early (before your salary arrives) and those bills that come too late (when all your salary has been used up)?  In this scenario, it will seem like you’re doing nothing but pay your bills; you will probably be even wary of using your money for other necessary expenses because you’re afraid you’ll run out of money by the time your next loan bills come.

 

If you consolidate your debts, you will only have one due date.  Every month, you know that you need to pay “this and that” amount by “this and that” date.  Since you need to make only one payment each month – and since you have a fair idea about how much the payment is going to be – it will be much easier to put aside a fixed amount of money for debt servicing and thus free the rest of your money for other necessary spending