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Thursday, February 19, 2009

Basic Ideas On Finding Credit Card Consolidation

By Nicky Svengali

Here are some suggestions on researching easy credit card debt consolidation:

- When considering credit card debt consolidation it's essential to ascertain whether lower periodical payments or an overall step-up in savings is being sought. This is an fundamental consideration because while consolidation can lead to lower periodic payments (when a lower interest consolidation is obtained to pay back higher interest debts) there is not always an overall cost saving. This is because interest rates alone do not determine the amount which will be paid.

- The amount of debt and the consolidation term figure prominently into the equation. As an example, consider a debt with a relatively short term of five years and one with a lower rate but a much longer term. In this case, if the term of the credit card consolidation is ten years the repayment of the original debt would be stretched out at an interest rate which is only slightly lower than your original rate. In this case it is clear the client may end up paying much more in the long run. This kind of decision forces the client to settle whether overall savings or lower periodical payments is more significant.

- Most companies who offer credit debt consolidations should not expect any collateral against them; they look at you and what your credit and employment history say about you. If you have been making regular payments to all your creditors and if you have a solid work history those factors can work in your favor, establishing that you, as an individual, are a good risk.

- There are also providers out there who will give you an unsecured credit card debt consolidation in spite of your credit and employment history, if you need a clean slate. Instead of a long line of creditors ringing and posting letters and constant reminders that you owe money, you have one responsibility, one periodic payment.

- Imagine the long-term savings just by eradicating late and over-limit fees. Be aware, though, that providers attach higher interest rates to unsecured consolidations. They take a larger risk when they lend cash without security, and to counterbalance their interest rates will be higher than on credit debt consolidations with collateral. Consolidation amounts by necessity are therefore limited to lower amounts. Depending on the lender, the limit on the amount they will lend may be as low as 1,000 smackers or as high as 20,000 quid.

- Companies are able to stay in business by covering their risk with higher interest rates than they offer on secured debt. But this can still translate into lower periodic repayments for you, particularly if your credit cards carry high interest rates to begin with and you've fallen into the trap of paying late and accruing late-payment fees. Those vanish when you repay that debt with the money from your competitive loan and you may be able to negotiate a better interest rate.

- Get a transcript of your credit report. Call For a fresh transcript annually to guarantee that there are no errors even if you believe you have a top notch rating. If you find a mistake, get hold of the credit bureaux immediately by letter to request that item be removed. You should also get hold of the creditor that supplied the inaccurate information to the credit bureau as well, and make them modify it. Beware of challenging _true_ items in your credit report. Also beware of disputing a mistake or debt that is nearly seven years old (or whatever time it takes for items to be cleared, locally, from your credit record). Your debt may have been sold off to a debt-chasing firm, and your hassling them will make your case 'live' again, and may provoke them into coming after you. Let sleeping dogs lie!

- If your debts are just too overpowering then get help from a _non-profit_ credit-counselling service. They will help you in working out a repayment plan, or a credit debt consolidation agreement. It is not the most pleasurable choice when trying to repair bad credit, because it prolongs your poor credit score, but it is a healthy way to go about it. Private, for-profit lenders are working for their own good. Yours is secondary.

I hope these few basic pointers will be of some use to you in researching worthwhile credit card consolidation.

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