Comparing Debt Consolidation Loans, Credit Counseling, and Debt Management Plans

May 21

For many people dealing with debt, there are many options available for debt consolidation. The first option is bankruptcy, which many find to be the most unpleasant of all the options. Others prefer debt settlement, debt counseling or debt management.

Bankruptcy is a drastic measure that many would rather not take, but it is often an unavoidable step. When you file for bankruptcy, this not only takes away all your debt, but also your credit rating, preventing you from obtaining any kind of credit for many years. The effects of filing bankruptcy include severe effects on your credit score, which take years to repair. It can also result in an embarrassing public disclosure of your financial situation. Not to mention all the things you have lost forever, like your car, home, investments and even your name!

A much better alternative to bankruptcy is debt consolidation. When you use a debt consolidation service to pay off your current debt, you will only need one payment, one creditor and one interest rate. This makes paying off debt so much easier. It can also help you get that debt paid off faster and without as much embarrassment.

However, not everyone can qualify for debt consolidation loans. If you have a low credit score, you will most likely not qualify for debt consolidation loans. There are other options available though. One is a debt consolidation program, where you negotiate with your creditors to lower the amount you owe, in exchange for a lower monthly payment. There are also debt management plans, where you make a budget; meet with a counselor to help you set up a plan for managing your debt. You can also use a free debt consolidation kit to see if one of these might work for you.

Debt management plans tend to be a bit more affordable than the others, but they require a lot more in the way of work. The debt manager makes all of the arrangements for you to meet your payments. You would still be responsible for maintaining your accounts, but at a much lower level. You will be able to pay the company their fee every month, so the money you save by not having to pay so much interest can be quite a substantial amount.

As you can see, there are some disadvantages to each debt consolidation loan or plan. A debt management plan tends to be a better option for people who can’t qualify for debt consolidation loans. Also, if your debt is relatively recent, you may want to consider using a debt management plan. You’ll also want to talk to your credit counselor to see what kind of debt management plan they have available. There are many debt management companies out there, so you shouldn’t have any trouble finding a reputable company to work with you.

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The Top 10 Things You Ought to Know About Personal Loans

Apr 10

Loans in the UK’s worth is growing at four times the worth of salary based on some 2018 BBC report. Because of this, it’s not surprising that 8.3 million people can’t pay their debts off such as family bills. Listed below are.

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Freedom Debt Relief: Our Look at Credit Card Debt by the Numbers

Aug 23

Nerdwallet conducted an extensive study called, “2016 American Household Credit Card Debt Study.” They found that the average American household with credit card debt had racked up an average balance of $16,425. These numbers are significant to us at Freedom Debt Relief, but you might be wondering what the big deal is.

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A guide on how to get out of debt while on a restricted budget

Dec 17

Operating on a limited budget can be quite stressful. This is because an individual will rarely have extra cash to spare or spoil themselves. The situation can be aggravated if you have to pay off the debt that you own. This can make an individual frustrated especially if lots of his/her earnings are used for paying loan interests. Here are ways in which you can get out of debt while living on a very restricting budget.

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What is an asset loan?

Nov 17

An asset loan does not differ much from a traditional bank loan. As with bank loans, an asset-based loan requires a form of collateral to ensure repayment can be made in the case of a default, the types of assets accepted are just more varied.

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Reasons Why You Could Need To Borrow More Money

Jun 01

Most of you out there are working really hard to pay off debts you have accrued over the years. You’re probably looking forward to the day when you can start saving instead of repaying. But life has a nasty habit of throwing up some pesky problems that can only be resolved with money. Whether you need to take on extra work or you have to get a fast and expensive loan, there is nothing you can do to avoid that big unexpected bill. Not sure what I’m talking about? Check out these nightmare scenarios that need an instant cash solution:

Boiler breaks down – If you’re the homeowner, there is nobody but you to fix this problem. In your money saving efforts, you may have cut back on some of the household insurance extras like boiler breakdown cover. Unfortunately, when the boiler dies, you have no choice but to get it fixed quickly, especially with kids in the house. The costs you’re looking at can include emergency plumber call out charges, hourly labour rates of approximately £75 per hour, and then the parts. Plumbers always need to come back as well because they never seem to have the parts in the van!


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Broken window – It may be a storm, or it may be a child’s temper tantrum that causes the window to smash, but it needs fixing immediately. Not only will your home be liable to weather damage, but your property is not secure until that pane is replaced. This is another emergency call-out charge I’m afraid. You will need to cover board hire (yes, hiring a chunk of timber to block up the hole), and then the glass plus fitting. Many insurance companies will not cover any of this if they deem it to be your fault.

Cold winter – It is not advised to skimp on the home heating in sub-zero temperatures. If your room temperature is below 18 degrees centigrade, you can be more prone to illness and medical complaints flaring up. If you let the home freeze, your pipes may burst, costing you thousands in repairs and replacements. If it’s cold, you’re just going to have to find the money from somewhere to cover the heating costs. The first point of call on this one is the utility company to let them know you may struggle with the next bill. They may be good enough to arrange a payment plan to help you out over winter.

Emergency travel – If a relative falls ill, you want to be with them. If it happens suddenly, you may have to drop everything and travel hundreds or even thousands of miles to get to them. There’s no buy now pay later with air, sea or train travel. All travel, especially last minute bookings, is expensive. This may be one of those occasions when you are going to have to ask the boss for an advance on your salary. If you’ve used up all your favours at work, or it’s just against company policy, then you may need to look into Payday loans online. You’re going to need open return tickets, plus hotel accommodation and restaurant food money.

Car accident – Insurance often covers us for a car and breakdown cover. However, some insurers won’t help you with anything if an accident is your fault. These things do happen, unfortunately. On top of any work-impacting injury, you may be left with no vehicle for getting about. You may be thinking of public transport as a viable and cheap alternative. But you’ll be hit immediately for an expensive tow truck and insurance excess charges.

Domestic appliance breaks down – Most of the time it is cheaper to buy a new one than pay for someone to come out. If you think it’s worth it then have a look at trying to repair the old one. If it’s out of warranty, you may have to accept a bill for a new item. There are companies that let you rent or buy on credit, but if you’re trying to stay out of debt you may be in two minds about doing that. Some appliances can be put on hold, like the dishwasher or tumble dryer. However, you can’t live without a fridge freezer, so some money is going to have to come from somewhere. Don’t forget you’ll need to replace the lost food too.

Job loss or unable to work long term – You may have all your repayment plans figured out, but then your income takes a drop. This may be from pregnancy, long term illness, or a shift in the company’s staffing plan. Do you have a backup plan if your income drops? Once you’ve been in debt, you know what living within your means really means. But living on benefits with debt repayment commitments is impossible. Borrowing money from banks is also impossible when you have no permanent work. You may be asking for help from your parents. If you don’t have money stashed for this kind of emergency, you need to have a plan for coping if it happens.

Bereavement – Should you lose a loved one, the last thing you will be thinking about is money. Unfortunately, funerals cost thousands of pounds. If your loved one didn’t have insurance, you might be liable to cover the cost. Besides the burial or cremation charges, you will need to find cash for the Wake too. You may not be paid during your time off work either. It’s not fair, and it’s the last thing you need to deal with on top of everything else, but you may need to find some cash from somewhere fast.

Not all of us are in a financial position to have an emergency fund stashed away. But when you need cash in a hurry, it’s best to explore every opportunity before committing to additional debt. You might have something to sell, as heart-wrenching as that could be. You may also be able to take on some extra hours or temp work to raise some much-needed cash. Even though you may be borrowing in a hurry, try to have a solid plan for clearing new debt quickly.

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