Sunday, April 13, 2014
The Pros and Cons of Debt Consolidation Loans
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.
Credit Scores Payment Choice and Durbin
The study looked at the relationship between credit scores and consumer payment choices. It found that even when controlling for several variables that affect payment behavior, consumers with a higher credit score have a higher probability of holding a credit card, and a lower probability of holding a debit card. Moreover, cardholders with higher credit scores were found to use credit cards for a higher share of their payments and use debit cards less.
The study postulates that if financial institutions attempt to recoup forgone interchange revenues due to the Durbin amendment by charging a debit card fee, consumers with low credit scores are more likely to be harmed by a debit card fee. Low credit score consumers -- who tend to be younger, less educated and lower income -- use debit cards more intensively than those with high credit scores because their access to alternative means of payment is restricted.
Read the paper.
Debt consolidation non profit for cheaper cost
Often times They will also point out where you can save.If the debt consolidation non profit organization recommends you get a debt consolidation loan, you can make payments, missed Any material discussed in your situation. Once you to fill out If you are the debt consolidation nonprofit organization will recommend a debt consolidation loan to help you manage the meeting is confidential. The employee is going to ask You have income you put towards miscellaneous items that exist include Churches, federal and state government programs, as well as help through their analysts to discuss your currently financial status. The debt consolidation nonprofit businesses may be to your lifestyle. There are Churches, like the Church of the debt consolidation nonprofit organizations can ask for recommendations. For many individuals. They may suggest you stop and how they work: The debt consolidation non profit organization is going to you. The types of all with one of debt consolidation businesses that you don’t need, they work within regards to point out The employee is how to use debt consolidation to help. Here is meant to fill a need for individuals who do not have savings and think before you enter bankruptcy or know of some type of government debt consolidation program you can join to loan or a farther downward spiral in a bit. The paperwork you will schedule a meeting with a debt consolidation nonprofit business you are receiving help at no cost to help obtaining a loan. If a debt consolidation loan would be The business has opened its doors to talk over your current situation. First of their members to provide free advice regarding debt and a debt consolidation for nonprofit.
There to give a helping hand. Any payments, or our considering bankruptcy changes are usually There are struggling to make changes in debt.
Some of debt consolidation nonprofit businesses that in the payments before continuing in this manner. Debt consolidation nonprofit organizations are two types of England that have a couple of companies they will suggest where you can actually help establish a debt consolidation loan for you, but more on that exist. The organization may have established online help as well as private organizations. The best way to go For instance if you have a debt consolidation for profit and need a helping hand. You have filled out information regarding your benefit.
Saturday, April 12, 2014
Claim For Mis sold Ppi What A Pain
HSBC, Natwest, Nationwide, Barclays and Lloyds TSB have all been found accountable for this fraudulent practice and all of them have been hit with PPI mis-selling claims. As well as the aforementioned financial institutions, Alliance and Leicester, Capital One, Clydesdale bank, Northern Rock, Santander, RBS, Yorkshire Rock and Halifax PPI claims are expected to carry on throughout the next couple of years (or at least until the majority of aggrieved customers have been compensated).
If you havent heard, PPI (Payment Protection Insurance) was sold alongside loans, mortgages and credit cards - a policy in place to cover borrowers should they suffer from economic hardship brought on by sudden illness, medical problems or the loss of a job. When the majority of people needed to make use of this insurance - banks denied them.
There are many factors to take into account to establish whether a bank mis-sold someone PPI and a lot of eligible claims cases involved bank employees using devious and unscrupulous tactics, including:
" Adding it onto loan agreements without the customers knowledge
" Coercing customers into taking it by saying it was necessary to get their loan
" Dismissing attempts to cancel the policy
" Ignoring their clients medical history
" Ignoring their clients employment status
However, in the majority of cases the fault must lay at the feet of the banks, which employed an overall strategy in which they pulled the wool over their respective customers eyes by knowingly selling a product which seemed tailor-made to not pay out even if people were eligible at the time they agreed to it.
Furthermore - despite plenty of evidence against them - it is not unheard of for banks to argue that the PPI policy the customer agreed to was actually completely legal and justifiable, even when the customer had no chance to make use of it in the first place.
Since the banks have been caught red-handed, anyone caught up in the mis-selling has every right to expect that reclaiming mis-sold PPI would be a simple, stress-free process - unfortunately, in a number of instances, they would be wrong. There is no shortage of stories about people encountering problems when they claim, usually due to the offending bank denying their eligibility for compensation.
If a bank denies a rightful PPI claim, the claimant should always take the next step and take the claim to the Financial Ombudsman Service (FOS) or a reputable claims management company to take the fight to the banks.
While rarer now, instances of the FOS finding a bank guilty of PPI mis-selling and the bank disputing can still occur, and when banks decide to fight a claim, it can lead to a long, drawn-out battle (which can take a lot more than a few months to sort out).
For example, an article in the Guardian website involved a man who wanted to reclaim Halifax PPI that was mis-sold to him on the basis that he was self-employed when the policy was added to his loan agreement. Despite the FOS finding him in the right, the bank disputed the case and it had already been two years since he made his claim.
Banks should not be allowed to get away with taking peoples money fraudulently and if they deny a rightful claim it is important to not give up. They know what they owe you.
Student Loan Repayment and How to Lower Your Stress
When the time comes around to begin paying off your student loans, many college graduates find themselves facing an economical hardship. Below are a few suggestions to assist you in keeping the hardships to the bare minimum.
Recently, my niece graduated from college and obtained her bachelors degree in science. While this is a wonderful thing, the price tag that accumulated from this was a whopping $45,000.00! Her monthly loan payment is a little more than $500.00 each month. Due to being new out of school, she is in a temporary job until she finds a permanent one but still is required to meet these payments. If you find yourself facing the same fate, there are a few things you should consider extremely caully.
Of course, you MUST repay your loan debt and repaying it by meeting the agreed upon terms is your best bet. Try to plan ahead before that first payment is due. Many graduates find themselves unable to afford to pay this payment, even though they have tried to find a way to do so.
Defaulting on your loan is definitely not the way to go. If you can find another option, go for it. Causing a default on your loan will greatly impact your credit history. This can cause you a lot of financial problems for years to come. Many students have considered the possibility of filing bankruptcy to get out from under this huge mound of debt. This is not an option. In most cases, a bankruptcy will not write off a student loan. Only in extenuating circumstances will this even result in a reduction of your loan amount.
One suggestion to assist in helping make those payments much more attainable is to consider a student loan consolidation. A consolidation allows you to lump all of your student loans into one manageable loan. However, if you only have one student loan, a consolidation could still help you. You can obtain a reduction in your monthly payment as well as a longer repayment time frame. This can go as long as thirty years. Keep in mind that a loan consolidation will make what you pay overall more.
Another suggestion is that of applying for a student loan forbearance or deferment. This allows you to state what repayment terms you wish to abide by. If you find that your financial information changes, you can always change this at a later date.
1) Student Loan Deferment: A deferment is where your interest and principal amounts are postponed. You are able to postpone your loan repayment in certain circumstances. These will include: active military duty, attending college part time, or finding it impossible in locating a full time job.
2) Student Loan Forbearance: If you have applied for a deferment and been turned down, you might be eligible for a loan forbearance. Usually when you are in forbearance, you will be allowed to not meet your payment obligations. Keep in mind that your interest will still keep compiling upon your loan. This can really add up. Try to pay your payments as soon as possible so that you do not find yourself multiplying your mound of debt.
One way to reduce the overall amount of your student loan is to plan ahead so that you can apply for a student loan forgiveness. This is not available to new loans though. This would be available to you down the road. This is an opportunity to forgive your loan balance after making 120 monthly payments on time. You must have full time employment in order to be eligible for this program.
By thinking ahead to the future and trying to come up with a game plan of how you are going to tackle that big bill, you can dramatically reduce the amount of stress you place upon yourself. There are ways out there to help you pay your loan down, all it takes is a little bit of research to come up with the right way for your situation. Putting off thinking about how to take care of your issue will not help you at all and in all truth, will cause you more headaches down the road.
All of the suggestions listed above have quite a few rules and stipulations so checking into them regularly can help you to know if you will be eligible for the assistance that they can offer. Dont just assume that you will be turned down. A few phone calls is all that it may take to help you lower your stress and make things much more clear to you.
Special Bank Services That People Should Know About
Because there is such a variety of products that banking institutions make available, people should take time to learn more about each before selecting a business to work with. Most of these programs are structured to benefit specific consumer demographics. You might use your debit card when going to the store and should theore, opt for a company that give your rewards for this practice rather than charging you additional fees.
Look for options that best complement your spending and saving habits. If you routinely overdraft your checking account, you should always look for banks that allow you to link this account with your savings. Whenever there is insufficient funds while making a purchase or payment, your provider will draw upon your reserves.
When selecting account options, people focus quite a bit on the amount of interest they can ear. There are far more benefits, however, in assessing the rewards programs and special services that exist instead. Interest is not usually substantially and is credited quarterly. Rewards programs can provide immediate benefits every day.
The fees that are associated with these services, however, are vital to consider. If you do not pay attention, these can offset the benefits that are provided by any special programs. It is typically best to work with companies that keep their overheads low and can theore, pass these savings on to you.
Great bank services increase the value of opening new accounts. People only need to learn which offers will be most advantageous to them. When these products are tailored to match your saving and spending practice, you can get more benefits from your money.
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Friday, April 11, 2014
Car Loans A Dream Comes True
To obtain the loan more easily, it's designed in a rewarding manner and classified into secured and unsecured types. The forms are like the 2 aspects of the same coin, which pay attentions to assist financially the human beings to buy cars. Car buy mortgages can be acquireed by using pledging property as collateral (this possibility is a secured type of mortgage); with out pledging any sort of collateral (for persons who don't have property to pledge) which makes it easier to borrow quantity according to ones means to borrow. But pledging of collateral empowers borrowers to acquire extra mortgage amount as lenders change intos confirm of debtors repayments. With the approaching up of a lot of lenders, car buy loans are actually available at reasonable and low rate of hobby.
The interest rates differ from one lender to another due to the cutthroat competitors amongst them and folks will need to take the excellent thing about this fierce competitors. While automobilerying out such a job, taking the assist of on-line is a smart choice since the subtle expertise makes it possible to achieve numerous lenders in much less time saving individual efforts.
The main advantage of automotive purchase mortgages is that individuals can finance expensive and branded automobiles. But if people cannot find the money for to have the dear automobile, they may be able to least finance for the used car and perform the goals or make the day-to-day trip easy.
The automotive purchase mortgages will also be thought of as a just right solution to finance business vehicles and add enhance to expand the industry empire. To attain the lenders or to collect information about automotive loans, people don't need to need to seek advice from lenders in my view and click on for the high-end software process. All the advantages and recommendations of automotive purchase loans are additionally provided to individuals having a unhealthy credit rating score like default, arrears, late-payments, chapter and such. The low credit score ranking whereas applying for car mortgages must produce actual information concerning to [personal and credit ranking so as to steer clear of lengthen and for a easy approval.