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You are swimming in debt. You have 4 credit cards maxed out, a car loan, a consumer loan, and a house payment. Simply making the minimum payments is causing your distress and certainly not getting you out of debt. What should you do?

Some people feel that debt consolidation loans are the best option. A debt consolidation loans is one loan which pays off many other loans or lines of credit.

Im sure youve seen the advertisements of smiling people who have chosen to take a consolidation loan. They seem to have had the weight of the world lifted off their shoulders. But are debt consolidation loans a good deal? Lets explore the pros and cons of this type of debt solution.

Pros

1. One payment versus many payments: The average citizen of the USA pays 11 different creditors every month. Making one single payment is much easier than figuring out who should get paid how much and when. This makes managing your finances much easier.

2. Reduced interest rates: Since the most common type of debt consolidation loan is the home equity loan, also called a second mortgage, the interest rates will be lower than most consumer debt interest rates. Your mortgage is a secured debt. This means that they have something they can take from you if you do not make your payment. Credit cards are unsecured loans. They have nothing except your word and your history. Since this is the case, unsecured loans typically have higher interest rates.

3. Lower monthly payments: Since the interest rate is lower and because you have one payment vs many, the amount you have to pay per month is typically decreased significantly.

4. Only one creditor: With a consolidated loan, you only have one creditor to deal with. If there are any problems or issues, you will only have to make one call instead of several. Once again, this simply makes controlling your finances much easier.

5. Tax Breaks: Interest paid to a credit card is money down the drain. Interest paid to a mortgage can be used as a tax write-off.

Sounds great, doesnt it? Before you run out and get a loan, lets look at the other side of the picture - the cons.

Cons

1. Easy to get into further debt: With an easier load to bear and more money left over at the end of the month, it might be easy to start using your credit cards again or continuing spending habits that got you into such credit card debt in the first place.

2. Longer time to pay off: Most mortgages are the 10 to 30 year variety. This means that rather than spend a couple of years getting out of credit card debt, you will be spending the length of your mortgage getting out of debt.

3. Spend more over the long haul: Even though the interest rate is less, if you take the loan out over a 30 year period, you may end up spending more than you would have if you had kept each individual loan.

4. You can lose everything: Consolidation loans are secured loans. If you didnt pay an unsecured credit card loan, it would give you a bad rating but your home would still be secure. If you do not pay a secured loan, they will take away whatever secured the loan. In most cases, this is your home.

As you can see, consolidated loans are not for everyone. Before you make a decision, you must realistically look at the pros and cons to determine if this is the right decision for you.

Are you like the majority of Americans, continuing to cover excessive charges and payments to your charge cards? Will it seem like the greater you pay, the higher you debt will continue to climb? This is due partly to higher interest levels and a poor economy.

About the Author

Are you never able to pay off credit card bill at the end of the month? Find out how to get your debt paid off faster - starting right now - at the Debtopedia website. Visit http://www.debtopedia.com to get your free copy of my special report "Secrets of Credit Card Debt" now.

Debt Consolidation Programs

programs is going to take all your high interest debts that you owe and consolidate them into one monthly payment, having a lower rate of interest. Your monthly payment for that one loan ought to be a substantially lower payment for you every month. The issue for most consumers with this particular loan plan is that they will have to have collateral being a home or another good assets in order to get the credit.

With collateral you can aquire a lower payment per month, but missing a payment is not an option. If you do miss a payment, plus youve got put up your property up as collateral, you run the risk of having your home repossessed. One other issue with investing in this type of home loan is many people find yourself repeating their same improper habits and run up more credit card debt.

Credit agenda debts are accelerating, the numbers of defaults are accretion at a amazing rate, and there are a amount of afraid whispers from assembly in the acclaim agenda industry. The autograph is on the wall, the red flags are raised, and the acclaim industry will be acclaim agenda debt.

Some banking firms accept asperous able-bodied the contempo banking crisis, companies like Bank of America and JPMorgan Chase. But these aforementioned firms, and abounding others are abundantly apparent to the next crisis of baneful debt, outstanding acclaim debt. The banking accountability of baneful acclaim agenda debt is estimated at $950 billion. Industry assembly are bound authoritative aplomb statements advertence that their firms are appropriately positioned to survive a accident their words are eerily accustomed to statements fabricated above-mentioned to the mortgage crisis.

Expecting added losses from acclaim cards the big firms can be accepted to do what they usually do to account losses, as the customer we can apprehend added ante and fees. Unfortunately this will alone advance to college absence ante and added consumers walking abroad from their debt. Innovest, an adviser report, is on the almanac adage acclaim cards are at a angled point and absence debt losses of $41 billion for the acclaim agenda industry is accepted to bifold in 2009 to $96 billion.

Card debt is handled abundant in the aforementioned way as mortgage debt, the acclaim curve getting arranged and awash to third parties but after the accessory of property. Costs will be traveling up for the acclaim companies as it becomes added difficult to advertise their debt in the aftermarket.

Changes in the debt agenda bazaar can accept a massive aftefect on the affairs ability of the US because the prevalence of their use. As ante go up for above-mentioned debt and restrictions for approval of new acclaim curve shrink, we are bound traveling to acquisition ourselves in addition bad acclaim crisis as this huge portfolio of bad debt is absorbed.

What does this beggarly for the boilerplate bad acclaim consumer? Prepare for afraid fretfulness from your acclaim agenda issuer. Ante are accepted to access badly and acclaim banned will be abundant added difficult to get in the abbreviate term. Also, a adeptness customer will charge to watch for action changes in their admission acclaim cards statements. Dont be abashed to ascertain your absorption amount bifold or even amateur if you are backward on a payment, abounding agenda issuers are searching to accident amount hikes like this to acclimate the storm. The autograph is on the wall, but with accommodation you too can best position yourself for the accessible acclaim agenda disaster.

Debt securities and exchange consolidation is a popular method of restructuring, many calculations in a reasonable amount each month due. What debt consolidation programs are a new law to create, whether through a personal loan, credit card company, bank loans or home equity line of credit is. A reduced amount and lower tax rates are some possible benefits, but there are some known risks. Relying on a debt consolidation establish contacts withLenders, lower prices and work out a solution is another method that has its negatives and positives.

Putting all your payments will be together in the short-term assistance, but not the actual debt away. Monthly amounts and interest rates fall, but consolidation is not always the best course financially. The ultimate prize for a consolidation loan, you could cost more than if you did nothing in the first place. This can be a big problem with BillConsolidation services.

Often, homeowners use their property equity to debt consolidation and the use into account. It really is research or not, whether it be a good idea to avoid bankruptcy. There is a risk of becoming homeless, when a high number of payments not made.

Many people think that bankruptcy is the only alternative to credit and bill consolidation phase is located. A good step would be to repay as much debt as possible before you bringengaged on a consolidated loan and consolidate business. If you are in savings that can open up a 401k or other investments, you may not need to consolidate your debts. Life insurance can also be accessed or sold when you're younger and not sick. You need to pay more than the minimum each month, in order to operate a debt and bill consolidation program.

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Without addressing average college debt from the student education loan, President Obama recently declared that America remains the country to beat. "We are home to the worlds best colleges and universities... where more students come to study than any other place on Earth." I tend to believe the President on that statement.

Later in the speech he told us that "America has fallen to ninth in the proportion of young people with a college degree."

I cant help but wonder -- is that necessarily such a bad thing?

Can I Get A Job To Pay My Student Education Loan?

What concerns most of us is jobs -- jobs that enable a college graduate to enter the workplace at an income level where he or she can make ends meet and manage student loan repayment without parental financial support or more government subsidies.

According to the report by The Project On Student Debt, for graduating students the average college debt is $24,000. After adding in the interest, the payback can escalate to over $31,000.

These days its tough to find a job to cover basic overhead, and most young people dont factor in the cost of their student education loans until reality sets in. College tuition and fees have risen four times that of the median income since 1982. Graduates are not getting jobs and cannot pay off their college debt.

Teach Student Loan Finance

At 18 years old, most have no idea what field or career will fulfill them. High schools should teach student loan finance first, before these young adults take on the crushing burden of college debt for dreams of a future they cannot foresee.

According to Richard Arum and Josipa Roksa, authors of the new book, "Academically Adrift," 45% of students fail to show any improvement in critical thinking, complex reasoning, or written analysis after two years of college, dropping to 36% for seniors.

I believe it is not colleges that are failing 46 percent of the students, but rather, many of these failing students should not be there in the first place.

A senior college faculty member made the point that course expectations have declined for decades, leaving many college graduates unprepared for their future careers. Such emphasis is placed on college education in favor of the trades that inflated high school and college grades reward mediocre scholastic achievement.

Many young people who would have been more productive in a skilled trade that fulfills them are funneled through the higher academic system, but even top-tier doctors or lawyers may not be able to keep up the student loan repayment on their tab of $100,000 or more.

Student Education Loans -- Follow The Money

Current statistic show there are over 11 million enrolled in colleges and universities. Approximately 2/3 graduate with college debt.

If average student loan principle is $24,000, students must pay back college debt of $31,000.00, including the 36% of seniors who maybe should not have been there in the first place. That is approximately 1,980,000 students who have shown no progress in thinking, reasoning, or analytical skills yet have taken out student loans totaling about $47.5 billion U.S. dollars, PLUS an additional $13,860,000,000 in interest.

You read it right -- these students owe $13.8 billion in interest.

Who gets this $13.8 billion interest income? Who took over the student loan program? The federal government. The administration has a big incentive to get every young man, woman and their parents convinced they need to attend college and in debt themselves.

Reducing The Student Education Loan

Whether a young adult should attend college must be answered on a personal level. Here we seek the answer to lowering national average college debt.

One solution gaining in popularity is online classes. Usually some on-campus participation is required, while core lectures are provided by an instructor, online.

Returning students have been able to complete college educations through online degree programs. Younger students can reduce their housing and commuting expenses by taking classes at home on their computers, to avoid starting their career with a student education loan.

It seems these days that everyone is drowning credit card debt. The biggest problem with credit card debt is that when you are there, credit card companies will do everything in their power to keep you there.

Did you know that it can pay up to 30 years, a credit card bill if you pay only the monthly minimum?

Depressed?

Do not be.

There are a few steps you canYou get to live on the road to a life without debt.

Reduce expenses: The first thing you need to do is to go through everything on your money and make decisions, what is important and what is not. Next out, if it is possible to reduce the amount that had to spend what you have chosen important. For example, when I saw my cable, Internet and phone bills, I spent more than $ 170 per month. Through contact with my cable company and the bundling of these services,I was able to reduce the bill to $ 99 per month. I was then able to use that $ 71 per month to be paid from an invoice.

Create a Budget: Now you have an idea of what you feel is important that you have to spend your money, you create a budget. Draw a line the length of the middle of a piece of paper. On the left side, right down all your costs. Make sure everything, including clothing and entertainment at. On the right side right below your total monthly net income (after tax). Subtract your expenses from your total income. When we left money, great! If not, the costs must be reduced further.

Pay your bills on time: Nothing will ruin your budget fast taken the first steps with late fees. If you are late paying a bill, contact your creditors and ask for an extension. You will most likely give it to you if you ask.

Pay more than the minimum: As I said, it will take nearly 30 years to one wipe> Credit card to pay, if only the minimum. You must always begin with the return so add a little extra to your payment.

Ask for a lower sentence: You will be amazed how many times your credit card companies are willing to lower your interest rate be surprised if you ask them simple. There is a primary concern is their money back so that it is in their best interest to keep you happy. Use the information to your advantage.

Find a lower interest rate card:If your interest assignment of the claim to a lower or zero interest card, you do it. To save a lot of money in interest charges alone. How do you cancel your old card, so you will not be tempted to use it and wreck more debt.

As you can see, credit card debt will be reduced or eliminated by just a few simple steps.

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When it comes to the initial stages of your start-up, the odds are youll need more money than you have sitting in your bank account. The question then becomes how do you go about procuring that money? The two options are debt financing and equity financing. Equity financing is a popular financing option among a lot of entrepreneurs, especially in start-up stages when the business is unproven. It may not be all its cracked up to be though when you consider the long term implications of financing your business by selling equity.

In case anyone reading this is new to the topic of financing, a quick definition of each is in order. Debt financing is pretty self-explanatory. You need money for your business, so you take on debt to get it. The most common method is through a loan. In equity financing, instead of taking on debt, you essentially sell part ownership of your business to an investor.

So why is equity financing so popular?

The main reason is that in a way it can be a bit of a get out of jail free card. If you take on debt to finance your business, and something goes wrong and the business goes belly up, youre still on the hook for the repayment of that debt. With equity financing, the investors take on that risk when they decide to put money into your company. If your company fails, its a loss the investor(s) share with you, and youre not obligated to repay them their investments.

Another reason is that the cost of borrowing is expensive, especially right now with banks being so reluctant to lend. If you are able to find a lender, which will be very difficult to begin with, the interest theyll demand will likely be significant.

Equity sounds like the way to go! Or is it?

Well as with a lot of things in business, particularly in entrepreneurship, the answer is it depends. I wont be so ignorant as to try and say one way or the other is the correct way to go, but I would like to advise that business owners seriously consider the DIS-advantages of equity financing before they decide to sell off ownership in their company.

Go to Part Two of Debt vs. Equity to examine why debt may be a much better option for you than equity.

About the Author

Zack Fair writes for a Bad Credit Loans company Oops Home Loans, an Australian lending company offering debt consolidation, credit impaired inancing, home purchase and renovation.