Here Is a Method to Reduce Your Debts in Illinois

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Consumers with significant credit card debts know that they need to reduce them because carrying a large amount of debt places the future in jeopardy. Several people are offering their help for this circumstance, but the “help” is not always the best thing to do.

One highly publicized way to reduce your debts is to obtain a debt consolidation loan. You might be in favor of this type of loan because it immediately reduces your debts to zero. Although reducing one’s debts to zero all at once sounds wonderful, this option doesn’t address your financial problems or reduce your debt.

A Debt Consolidation Program versus a Loan

A debt consolidation program is a better choice for most people who have several unsecured debts, such as credit card debt. In order to obtain a debt consolidation loan, you must have a good credit score. If you don’t, you have the option of offering your house as collateral for the loan. When people obtain a loan in this manner, they often find that they are carrying significant debts again in just a couple of years, and they may be in danger of losing their homes.

The above scenario is much less likely to happen to you if you choose an Illinois debt consolidation program like Credit Guard rather than a consolidation loan. With a debt consolidation program, you will have a chance to work with a counselor who can offer money management services. You will learn how you spent your way into debt, and you will also learn how you can keep from falling into debt in the future.

If you choose a debt consolidation program over a loan, you will not have to risk losing your home because you aren’t offering it to anyone as collateral. The other bonus is that you and your counselor will be working to significantly reduce your debts, and this wouldn’t happen if you were to take out a loan.

How a Debt Consolidator Seeks to Reduce Your Debts

A debt consolidator reduces her clients’ debts by contacting each creditor and asking for a lower interest rate. Then, your counselor will negotiate with your creditors to accept a payment that you can more easily afford. If any late fees or penalties were added to the balances, your counselor will ask that your creditors remove them. After these negotiations have been completed, your principal balances will be lower, and this is not something that will happen if you obtain a loan.

A Debt Consolidation Program Makes Re-Payment Easier

If you have several unsecured debts, you are making more than one payment each month, and it may be difficult for you to keep up with these payments. By allowing a debt consolidator to help you with a debt consolidation program, you will be able to stop making several high monthly payments. You will only need to send one payment each month to your debt consolidator, and she will disperse the amount that each creditor agreed to accept.

Before you make the drastic choice of obtaining a debt consolidation loan, look into a debt consolidation program. The program may be exactly what you need.

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Studies Show Debt Associated with Significant Depression

Posted by in Debt Counseling

don't get stressed out by debt

People struggling with debt are dealing with a lot more than an overwhelming flow of monthly bills; they’re also dealing with overwhelming feelings of hopelessness and failure, and a recent study shows, they’re also three times more likely to be affected by mental health issues than people without debt. The study analyzed the mental health and financial situations of about 10,000 men and women in the U.K. between 1991 and 2008.

Conducted by researchers at the University of Nottingham, U.K., the study revealed that the risk of mental problems increases as the stress and anxiety associated with being unable to pay bills on time or carrying debt spills over into everyday life. What’s more, the risk of developing depression and severe anxiety is greater in areas where debt is uncommon and in areas where debt is associated with negative social repercussions.

The researchers went on to say that people with debt who were involved in the study frequently reported that they felt unable to focus on the day-to-day activities of living or to make simple decisions because of worry and preoccupation with their debts.

While the study looked at different kinds of debts, the greatest impact on mental health was found among the study participants who had unsecured debt such as credit card debt. These men and women reported feelings of hopelessness and said they felt like they were constantly under strain and unable to participate in decision-making activities. They also reported significantly higher levels of anxiety and associated these feelings with the fact that they are carrying unsecured debt.

The U.K. study is not the only one to link debt with mental health issues: Another recent study by researchers at the University of Wisconsin had similar findings, reporting that among study participants, every 10-percent increase in debt was associated with a 14-percent increase in depressive symptoms.

While these studies provide interesting data and findings, they’re not “news” to anyone who’s struggled with debt. If you’re one of those people, you know firsthand how carrying debt can cause feelings of sadness, helplessness, hopelessness and severe stress that can have an impact on your ability to sleep, cope and concentrate.

It goes without saying that the best way to eliminate debt-related stress and anxiety is to get rid of the debt itself and to do that as quickly as possible with a debt management program. The two best ways to do that are to pay more towards your debt and to reduce the interest associated with the debt payments. Getting a part-time job and dedicating that money towards debt is great as long as the added responsibility doesn’t also add to your depression. To reduce interest rates and other fees, debt consolidation is a simple solution with big results. Today’s debt consolidation services also may include credit counseling services to help you learn about finances and avoid lapsing back into debt. Both debt consolidation and credit counseling are great options for relieving debt and the anxiety and depression that can accompany it.

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How Credit Consolidation Alleviates Late Payment Problems

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Late payments can have a devastating impact on a person’s credit.  One late payment issue can evolve into a serious cycle that is hard to break.  Many people do not fully understand just how much of an impact a late payment can have on one’s credit.  Anyone interested in building their credit should learn how the payment history affects one’s credit.

How Does the Time Line Affect the Credit Score for a Late Payment?

A late payment will likely have an impact on the credit score.  The timeline for the late payment determines how much of an impact it has on the person’s credit.  If a person made a late payment years ago, the person is unlikely to be affected by that unless the entire payment history consists of late payments.  A recent late payment can lower the person’s credit score by as much as 100 points.

What Is the Most Dangerous Window for a Late Payment?

The most dangerous late payment window is 90 days.  One late payment within that window elevates the risk profile for that person.  A 90 day late payment can last seven years.  A payment made within this window affects the credit in a similar way as a bankruptcy filing or a judgment.  The person automatically becomes a high risk to any potential creditor.

Does a Late Payment Affect a Person with a High or Low Credit Score the Same Way?

The scoring model treats high and low score people differently.  A person with a lower credit score will see less of a hit to their credit score than one with a higher score.  If a person has a score of at least 700, the score could drop by hundreds of points.  The low credit score won’t be greatly impacted by another negative item appearing on one’s credit report.

Credit consolidation can improve a credit score.  People who have trouble paying their bills on time may be able to participate in one of the credit consolidation programs that offer counseling and debt management assistance.  The person learns how to improve the credit score, budget, build savings and other important personal finance tips necessary to create a stable financial future.

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Credit Card Debt Consolidation Saves You Time and Money

Posted by in Debt Counseling

time is money, and debt consolidation can teach you how to get out of debt fastCredit card debt consolidation has helped so many people become debt free. It is the one of the easiest methods to finally pay off those lines of credit that keep digging you deeper into debt . Credit cards are risky but useful for providing short term financing. Unfortunately this system isn’t the best system at helping keep many people out of debt. With the availability of certain goods and the on the spot usage of credit cards, it isn’t hard to see how quickly a situation can get out of hand

A consolidation service can help you become debt free quickly. With a stepped process you can become financially independent of credit card debts. This credit card debt consolidation service brings together your credits and other non-secured loans under a single larger credit. With this you can systematically cut down your debt much faster, because you do not have to worry about tracking and paying off several monthly loan bills. By taking the confusion out of the payment process you cancel the risk of missing or late paying a payment.

Under a single monthly bill, debt is a lot easier to track and manage. As many have said, multi-tasking isn’t even beneficial!  But those are only parts of the process of becoming debt free. To really effectively pay off your debts you need to learn a foundation of good fiscal habits. A consolidator will provide knowledgeable credit counselors that can teach these budgeting and financing skills, and how to get out of debt fast. With these skills it is possible to not only make the minimum payments, but begin the process of paying off your credits in advance. Often times you can shave months or even years off of the payment schedule. In this case time is money, and the quicker you pay off your debts the less interest you end up paying as well.

If you are struggling with debts, a consolidation service may be able to negotiate a payment schedule that better fits your payment ability. Sometimes all it takes to financial recovery is a good break on your fortune, and someone who is willing to be on your side.

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Non Profit Solutions for Student Debt

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non profit debt relief for studentsUndergraduates who will rely on the federal Stafford loan program to fund their education can expect changes this summer.  The rate for borrowing among students is set to increase to 6.8 percent, a 50 percent increase from the previous year.  The increase in borrowing for individuals may create additional hurdles for students who struggle to keep up with increasing tuition costs.

The rate increase will occur after June 30 if Congress fails to take formal action on preserving the current rates established through the College Cost Reduction and Access Act of 2007.  Last year, the rates for borrowing for the Stafford loan program doubled. Those who are most in need of more affordable lending to fund their college education will be affected by these changes.  The changes point to a larger discussion on the affordability of education.

Students can focus on creating a strategy and plan ahead for these costs.  In addition to focusing on grants, scholarship and internship opportunities to make college education more affordable, students can also monitor rate changes for the popular lending programs.  Once they’ve developed a plan to finance their education, they can begin working with a debt consolidation non profit program to manage any debt incurred while in school.

A debt consolidation non profit program can help the student navigate the credit and debt challenges that often come with borrowing funds for school.  Here are several key objectives for students participating in such a program.

  • Repayment strategy to meet budget constraints, including a consolidation plan
  • Payment schedule timed to minimize penalties of early payoffs
  • Creates debt management strategy to meet student’s future financial goals (mortgage, education, etc.)
  • Establishes goal for anticipated debt freedom
  • Organizes and prioritizes all other debts to improve student’s overall credit scenario

While student lending rates and the cost of education will continue to increase, students can begin the process of planning ahead to make their college education more affordable.  It is ideal for the student to immediately begin planning the repayment strategy soon after graduating to get an early handle on their debt.  Careful planning can really make a difference for the typical student.

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What to Do if You Need Debt Consolidation Help

Posted by in Debt Counseling

A lot of people need debt consolidation help. If you are one of them, you are not alone. It’s not because you are a bad person. The financial climate all over the world has been very difficult, and lots of people now find themselves in debt that they cannot get out of on their own. Because this is the case for many people, debt consolidators are offering their services.

The Danger of the Debt Consolidation Loan

danger from debt consolidation loans

You may have heard of debt consolidation loans, but this particular method of debt consolidation help does not require that you take out a loan, and it is the better way to consolidate your debts. The most common way for people to obtain a consolidation loan is to borrow against the equity in their homes. This type of loan would put your home in jeopardy. If you were to ever default on your loan, your lender would seize the property and sell it in foreclosure.

When people obtain a loan to pay their debts, they will pay all of these bills in full, but they will continue to debt. With a debt consolidation program that does not require that you incur more debt, you can pay your debts in full in less time than it would require to make the minimum monthly payments or to repay a second mortgage. It will also be less costly.

What Does a Debt Consolidator Do?

A debt consolidator’s job is to negotiate with your creditors so that the high interest rates you are currently paying can be lowered. A lower interest rate is instrumental in lowering the amount of money you pay your creditors every month. If late fees and penalties have been added to your balance, a debt consolidator will obtain an agreement with the creditors to waive them. Then, all of these unsecured debts will be consolidated into one as you pay your debt consolidator one low monthly sum of money. The debt consolidator will pay your creditors the agreed upon amount until the debt is paid in full.

A debt consolidator can also help you keep from falling into debt in the future.

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The Processes of Non-Profit Credit Counseling

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Are You Aware Of Your Credit Counseling Options?

Did you know that there are many options available for credit recovery and debt management? Non profit credit counseling companies are available to help you take control of your financial picture today. These credit counseling companies can help you consolidate your existing debt, tell you how to properly avoid future debt, and even take a look at your budget planning. Credit counseling companies exist to help you get out of debt and back to the life that you enjoy.

You Can Trust Your Credit Counselors

You may be wary of television ads, leaflets and banner ads declaring that they’ll wipe out your debt. A non profit credit counseling company is different. The goal for a non profit company is to help you, the consumer, lower your debts. Since the company is non profit, the only take as many fees as necessary to keep the company itself funded.

non profit credit counseling could be your first step to debt reductionWhat’s The First Step?

A credit counselor can give you a free consultation to examine your current expenses and debts. The counselor can go over your current budget and see how much money you can reliably pay for these debts, and where you may be overspending in your current budget. After this, your credit counselor will see how they can help you resolve your debts.

How Are Your Debts Resolved?

Debt consolidation operates by negotiating with your credit companies to lower your monthly payments, interest, and sometimes even the principle owed. From then on, rather than paying dozens of bills every month, you’ll only need to pay one, low monthly payment. This monthly payment will be less than the combined amounts that you would have otherwise owed, saving you quite a bit of money in interest. Because you don’t have to worry about meeting your monthly payments there’ll never be a late payment charge or a collection call.

What’s Next?

After your debts have been resolved the work isn’t done. Your credit counselor can work with you to discuss options for building your credit in the future and avoiding any future debt. Credit counselors are there as much to help as they are to educate, and they can discuss your current financial situation with you and ways to make things a little easier on your pocketbook.

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