Debt Consolidation Makes Sense Only with Low Interest Rates

Credit that cannot be managed or is not being repaid requires debt consolidation. Debt consolidation offers borrowers with a chance to repay their high interest loans at low interest rate. You must be thinking, it sounds good, but how is it possible. How can high interest loans repaid at low interest.

This is how debt consolidation works it replaces multiple unsecured loans with single loan. As compared to several different loans, you obtain one single low interest rate loan. The single monthly payment on this loan is divided to repay the individual loans. This will also make your debt situation manageable. Debt consolidation should be accompanied with low interest rates; otherwise debt consolidation doesnt make any sense.

It is almost mandatory to find debt consolidation with low interest rate. Otherwise, it would mean financial mishap of the worst kind. You might end up paying more in the long run. Debt consolidation plan can have serious shortcomings to if the plan is not carefully structured.
Finding a good low interest debt consolidation is not always easy. However, an extensive research can certainly open ways to find one. First of all it is important to understand that your financial situation is unique, so what works for your neighbour might not work for you. Your debt consolidation plan will be as unique as your financial status.

While looking for debt consolidation, keep in mind why you are looking for debt consolidation. You are trying to cut off your monthly payment, looking for low interest rate, low fees and a loan term that does not stretch beyond a few years. A longer loan term with low monthly payments would mean paying more. A debt consolidation loan should not stretch beyond 3-5 years and maximum upto 10 years. There are numerous companies offering debt consolidation online. Settle on the company which offers low interest rate debt consolidation with least hassle.

A way to debt consolidation is through credit cards. This debt consolidation would not require you to place collateral, so it can be a good option. Good credit history would provide you with low interest rate. Ask your current creditor what interest rates would be offered, in case you transfer balances from other credit cards to theirs. A low rate that is fixed with no transfer fee would be ideal. Otherwise, shop for a new credit card. However, dont go overboard with your credit search. Numerous credit applications would have a negative impact on your credit report.

You can use equity in your house for debt consolidation at low interest. A 100% refinance would tap the equity in your house to repay loan and bills. Refinancing at low interest rate would mean getting rid of high interest rate loans with low monthly payment. Another way to tap on the equity is equity home loans. Home equity loan with fixed interest rate over a fixed period of time is an option. Also, you can take up home equity line of credit. Here you borrow upto a pre approved credit limit and borrow more if you still have money.

These loans are offered with low interest rate and good repayment options and have great deals. With home equity loans, however, there is always a risk of losing the property if you fail to repay.

A debt consolidation loan that is unsecured would not come with low interest rates. Since you are offering no security, they imply risk to the loan lender. A loan lender would try to minimize his risk with higher interest rate. But with good credit, you might find exactly what you need. Try to look for another way to debt consolidation if interest rates are high. Calculate the cost of the entire loan term, before you settle on a debt consolidation loan.

Money Management with a New Spouse

When a person marries someone with children, there can be some unexpected implications. Marrying into a full-fledged family can be a difficult transition for all, emotionally and financially; therefore, having a money management plan is a necessary part of marriage preparation.

As a married couple, children are your joint-responsibility even if they biologically belong to one spouse. Therefore, a couple may wish to open a joint bank account from which to pay for any expenses related to the kids. While a budget should be created well before the wedding date, a married man and woman should sit down together periodically and modify the budget, as necessary. The expenses should be reasonable, however; otherwise, one spouse may end up wishing that they had signed a prenuptial agreement.

If the parent collects child support, then this money should go into the joint household account. Alimony, on the other hand goes into the parent’s personal account. If contributing to the children’s expenses is an issue for the non-parent, perhaps the couple should receive premarital counseling. If the couple is already hitched, seeking marriage advice from a financial planner will help the husband and wife to settle any differences or misunderstandings.

Finding a Low Interest Debt Consolidation Loan

If you are in the market for a low interest debt consolidation loan, then you might think that you're out of luck. After all, aren't loans that consolidate your debt into a single monthly payment designed for people who have poor or bad credit?

What are the chances of someone like that getting a low interest debt consolidation loan? Depending on where you look for your loan and what collateral you offer, the chances might actually be quite good.

The keys to finding a low interest debt consolidation loan are knowing where to look for your loan and knowing what collateral to use for security.

With careful comparison of different lenders and a good value on your collateral, you stand a good chance of securing the low interest debt consolidation loan that you're looking for.

Interest and collateral

If you're just getting started on your loan search, you might not know what some of these terms mean. Interest is the amount that you're going to have to pay to the lender in addition to the amount that you borrow it's how the lender makes their money.

Ideally, you'll be able to secure a low interest debt consolidation loan, which means that you'll have less interest added onto your monthly payment and will have less to repay.

Collateral is property that you use to secure the loan, and is usually an automobile or real estate. If you don't repay your loan, then the lender can take possession of your collateral and sell it in order to get their money back.

Where to look for your loan
One of the big factors in getting a low interest debt consolidation loan is finding the right lender. Many of the lenders with big, flashy advertising are trying to draw in customers and charge high interest rates they should be considered only as a last resort.

Check with finance companies and small local banks first, especially during times when they're having any sort of customer appreciation days or a promotion of any kind. If they can't offer you a low interest debt consolidation loan, ask them if they can recommend another establishment in most cases, they'll be able to direct you to a place where you can get a pretty good deal.

The right collateral
Choosing the right collateral can be vital to securing a low interest debt consolidation loan. After all, it's your collateral that's guaranteeing the loan for the lender use it for all that it's worth. When applying for your low interest debt consolidation loan, ask for less than the total value of the collateral.

The greater the value of the collateral in relation to the asking amount, the more likely you'll be approved and charged a lower interest rate.

Shop around for quotes at several establishments before deciding on one use the same collateral and the same asking amount, and see who offers you the lowest interest and the best terms for your money.

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Managing your Money as a Couple

So what happens if you marry a spender, but you have been a saver your whole life?
A lot of couples run into this type of situation once they get married and their expenses are combined.

However it is manageable, you just need to set up a compromised budget.
Finances are noted as the number one conversations couples argue about in marriage and are also cited for the most divorces.

The last thing you want to do just after you get married is fight so figuring financial situations out beforehand will relieve any stress.

A budget is the best place to start.
This may prove to be difficult for the spender but it may also for the saver because you are going to have to meet somewhere in the middle.

Create your budget when you have time and both are at ease. Things will flow more smoothly.
Miscallaneious-10%Savings-10%Clothing/Dry Cleaning-5%Education/Misc-5%Food-10%Housing/Utilities/Taxes-30%Insurance-5%Medical/Dental-4%Recreation/Vacation/Gifts-6%Transportation-15%
This is just a guideline and you may find that you don’t take vacations and you can put money into other areas of your budget but this is just to get you started.

To look at your current spending now you’ll have to keep track of your expenses and any income.

Create three lists: current spending, spending percentages recommended, and actual budget. In the first column you’ll want to include the average spent for the last six months.
Total your monthly income in the second list, which is household income after state and federal income taxes and social security.

It may include salary, rent collected, interest gained, dividends received, income tax refunds, or other sources of money collected on a regular basis. Leave the last list empty for the time being.
To determine your overall spending pattern, take your net income and subtract it from your current spending.

Keep in mind that you will need to account for bills that don’t show up on a regular basis such as insurance premiums, retail credit, doctor and dentist bills, property and other state taxes, magazine subscriptions, etc.

Once you have your budget established, there may be a few pitfalls you fear running into, but then can be resolved.

The possibility of facing credit card debt. There may be times when you need to charge things, but set a goal for how much you plan to pay off each month and when you plan to pay it off completely.

Try beating that goal and pay it off before your estimated time frame runs out. Only have necessary credit cards as well, too many can get out of control too quickly.

Impulse buying. There will be times when you are shopping and you see something that you must have. Just don’t let it be a regular occurrence, and consider it a treat to yourself.
Thirty-day rule. If you see something you want but it won’t fit into this month’s budget, hold out. Give it thirty days and shop around in the meantime. You may find something less expensive or something better all together.

If you don’t happen to find something that compares and the item is still available the following month, then fit it into your budget accordingly.

"Comfort" spending. If you had a bad day at work and end up at the mall sifting through clothes, turn around and go home. Although it may make you feel better during the time, it will hurt your budget.

Relieve stress, or feeling depressed by other stress relievers you enjoy which may include, exercising or reading.

Gift giving. If you buy gifts for relatives and friends or special occasions get creative and think of something new to do. All gifts don’t have to be bought.

Make something or if you see something in a store that you like but its highly overpriced, buy the products that it consists of and make it yourself, such as gift baskets. You can buy your own items to put into a basket and decorate it yourself.

Vacations. Vacations don’t have to be in exclusive resorts. Take day trips or try something new like camping. Avoid souvenirs that you’ll never get any use out of, and when planning a trip consider all costs so you will know how much you have to save.

Your budget will be based on variable factors such as family size, geographical location, debt load, and sources of income.

Once the basics are covered, you then can get into your own interests and what you like to spend your discretionary income on but its important to keep in mind that this budget is based on both your incomes, and therefore you discretionary income should be spent on compromised items.

This budget will become routine in no time, as your spending habits may change but once you budget once, it will be easy to make changes and stick to a new one!

Life on a Debt Management Program

Signing up for a debt management program is easy; its a matter of finding a company you feel comfortable with that is difficult. There should be no pressure added from the company you speak with, joining a DMP is your decision and you should feel like you are in a partnership with the company, meaning you both have control over your financial situation. Below you will find information on debt management programs and what they offer.

First off, once you decide on a DMP your partnership will begin as soon as the company receives a client agreement. The counselor you speak with will become your personal counselor and they will send proposals to each of your creditors outlining your new repayment plan. However, not all creditors will process proposals immediately. It may take several weeks before the creditor notifies the counselor that the proposal has been accepted. Some creditors might request a higher payment than what was proposed, which in that case the counselor will notify you immediately.

Its the first few months that are crucial to ensure success on a Debt Management Program. You will find that some companys offer counseling throughout the first steps of the process to make certain that the proposals have been accepted and that you are receiving creditor benefits. A great aspect about having a personal counselor is that you should be able to:

* Change your payment method
* Notify them of creditors phone calls
* Report any errors on your statements
* Answers to all of your questions

If you want to earn special benefits like lower interest rates and waived late fees youll first need to be consistent with making your payments on time. Most creditors will start granting benefits upon acceptance of your proposals. However, some other creditors may take up to three consecutive payments before offering full benefits. Thats why it is important for you to carefully review your monthly creditor statements such as when benefits are granted to make sure they appear that month. You should also check each month to make sure that you are receiving credit for your payments made through the debt management company you chose to sign up with.

As most companies promise, the collection calls will stop. Yet, it may take up to three consecutive payments from the credit counseling company, before the calls stop completely. If a creditor happens to call, you should inform them that you are working with a credit counseling company to eliminate our debt. If they call again, notify your counselor and they will contact that creditor for you.

One thing that is crucial is to not make any additional charges on your credit cards once you have enrolled in a program. With most companies, if you do incur new charges, you are at risk of jeopardizing your acceptance into the program. Any additional charges could affect your payment schedule and your monthly payment amount because it affects your balance owed.
Usually credit-counseling companies will allow for you to pay several different ways. Some forms of payment are E-pay systems, which offers a convenient and secure way to make your payments. The payment is automatically deducted from your checking or savings account on the scheduled due date. This will ensure that your payment is received on time, every time. Another option available is if you choose to send your payment by cashiers check or money order. However it is important to send your payments in early enough to allow enough time to get there.

If you decide to sign up for a dept management program you should receive an estimate of the length of time it will take to complete your program. You should also get a breakdown of all the debts you owe, the amount owed to each creditor, the proposed payment to each creditor, and the anticipated number of months needed to pay off the debt. As your program continues, you should be able to contact a counselor to get an updated version of your repayment schedule. This will provide you with goals to shoot for each month as you see your debts decreasing.

So thats the process of a DMP, but one may still wonder, whats life like on a DMP. Well, your money isnt locked up, and you arent under house arrest where you cant go out and have fun still. Its up to you to decide how much money you need to set aside each month making sure you have enough to cover your costs, as well as cover any other costs you may have. To relieve stress, you should get out and do something you enjoy whether its simply going for a hike or hanging out with friends. There is plenty to do while being on a debt management program, which no one will know about unless you choose to tell them so because all your information is kept strictly confidential.