Debt


Is your mailbox full of unread credit card statements from the credit card companies? If answered yes, you should always make sure that you stay in track with your credit card bills so that you don’t accrue unnecessary charges and fees. There are ways in which you can eliminate your debt burden and live a debt free life. Debt consolidation and debt reduction are the most common ways that are resorted to by the debtors. While one has a positive impact on your credit score, the other will trash your credit score. If you too are confused about using debt consolidation or debt reduction, here are some points that you may consider before seeking help of any of the aforementioned option. Debt consolidation – When is it a good idea for the debtors? When you have to split your income among multiple credit cards, you can certainly think of consolidating your debts into a single monthly payment. If you choose a professional debt consolidation company to consolidate your debts, you can get a debt consultant who can assist you in negotiating with your creditors and lowering the interest rates on the credit card accounts. The debt consultant will assess your personal finances and see whether or not this is the right time to consolidate debts. If they feel that you can’t repay your debts on your own, you can easily start making payments through them and thereby reduce the monthly payments. While you start making the monthly payments to the debt consolidation program, this boosts your credit score in the long run. Debt reduction – Why isn’t this a good idea to repay debts? Well, if you’re someone who is worried about the repayment ability due to your meager income, you can certainly go for debt reduction or debt settlement. Here you can waive off a portion of your outstanding balance and facilitate the debt repayment procedure so that you can immediately get out of debt. You have to enroll yourself with a debt settlement plan through which the debt consultant can negotiate with your creditors in order to make them agree to principal balance forgiveness. However, the only point that makes debt settlement a bad option for the debtors is the negative impact that it has on your credit score. The better your score was before you settled your debts, the worse will be the impact on it. Therefore, if you have saved enough money, then you should contact a debt consolidation program instead of a debt settlement program so that you can protect your credit score in the long run. Therefore, when you’re drowning in a sea of credit card debt, you should make sure that you choose the most appropriate debt solution so that you do not repent later. Educate yourself on the pros and cons of the debt solutions so that you may choose the best according to your budget and affordability.

Debt Consolidation Vs Debt Reduction – Which is a Better ...


The festive season is over now. You must have splurged a lot in the festive mood; quite natural. Now everyone is back in the business. It’s time to create your new financial planning for this year. Also, you need to consider how your spent the last year financially. Was it good or was it bad? With the amount of expenditure you made in the last few months, you may feel the pinch from your creditors. If you were under control, nothing could be better than that. But if not, you are in debt, technically. Don’t panic. This is the start of a new season and a start of a new planning. If you are just trapped by debt, follow certain ways and you can easily come of it. Debt is when you’re due to pay back. It can happen with many things such as a loan, a credit card debt, mortgage or so. You must remain current with your payment towards your dues. If not, you are in debt and if you do not catch up, you will further go down in debt which will affect your credit score and hence, your financial stability. So, check out the ways below which can help you come out of debt and get rid of it. If you’re already in debt, read the following – If the debt amount is under control, then you can pay it off periodically. Use cash as much as you can until you clear your pending balances. If you have a mortgage, you can consider taking a second mortgage to repay it. Just make sure you clear all the outstanding balances firs. Now, sit back and give a serious thought to your current financial conditions and your financial priorities this year. If you think you need to spend a lot in this year in the form of education loan, foreign trip, weddings, or so on, just squeeze your expenditure on other things and save money for the priority ones. Moreover, if you’re refinancing your mortgage, your need to pay if off too. So look for a lender which can issue you a home loan with reduced interest and with long term repayment policy. If your debt is too much, get in touch with a debt consolidation company and pay off your debt or go for a debt settlement. This will help you increase your credit score too. Gradually, your will come of it and stay current. If you’re on the verge of debt, read the following – Manage your finances properly and wisely. Debt is very injurious and it can ruin your life. Stay current on your payments on your utility bills, insurance premiums, home loan and credit card bills. Use your card as judiciously as possible. Try to use cash instead. If you’re planning for a trip to abroad or you need spend a big amount this year towards a particular expenditure, save money for this from this month. Deposit money in your checking or savings account. Try to invest in stocks or mutual funds. Rent off your home and collect some bucks from there too, of course if you have another home to live in. Being in debt is horrible. Coming close to debt is frightening too. Pull up your socks now. Make financial resolutions now and never be fall prey to debt.

Festive Season Over. You Are in Debt? How Should You ...