When we’re staggering around knee deep in debt, we will often see debt consolidation as a way to move up to higher ground and get out of debt. With so many Americans being in debt, these debt consolidation programs are becoming more and more popular. However, they have some really significant disadvantages that one should consider before proceeding with this type of thing.
When going through a debt consolidation company, it will take you longer to pay off your debts. You may find that you are in for 20 or 30 years with one of these places depending upon how much debt you have accrued. That’s a huge commitment and a long time to be paying on debt.
Another disadvantage is that if you’re on with one of these companies for say, 20 years, that company could very well go out of business. A lot can happen in 20 years. If they do go out of business, and it’s handed over to some other owner or company, you might find yourself in a situation that can be messy and quite expensive. They may have new ‘terms’ or payments that you will have to make. This can be a bad situation for you.
When you are paying these smaller payments through debt consolidation companies, it can give you a false sense of security. You think that you’ve got everything under control, when in fact, you may not. If you still have those bad spending habits that caused you to rack up so much debt in the first place, you may just max your cards right back out again.
One great alternative to debt consolidation is to transfer all of your debt to your lowest interest credit card (if possible.) This will give you a bit more freedom as you won’t be paying huge interest rates while you’re trying to get your finances back on track.
Another great way is to pay off your highest interest rate card as fast as you can while you pay your other cards with the minimum amount. Once you get the highest interest rate card paid off, move the next highest one up and pay it off as quickly as you can and so on. A really great idea would be to cut those cards up after they have been paid off!
You can get back on track with your finances, and you can get out of the bog of debt. Think your choices through thoroughly and reconsider debt consolidation offers that you may have been thinking of going through with. Good luck.
Wednesday, October 3, 2007
Student Loan Consolidation Information
Student Loan Consolidation is a really useful repayment tool that gathers all your federal student loans and puts them into one loan, also significantly reducing your monthly payment. Student loan consolidation is one of the most popular used methods for reducing and paying off student debt. Student loan consolidation is a powerful financial tool which has the backing of the federal government to help you lower your payments by extending your repayment term. Student loan consolidation also gives you the opportunity to lock in at a low interest rate, which can save you a huge amount of money over time.
Federal student loan consolidation amalgamates all your existing loans into one single loan which will show a good future payment history, which will help you improve your all important credit score. These student loan consolidation benefits could save you hundreds, even thousands of dollars in additional interest over the term of your loan. Federally funded loans are initially administered through the US Department of Education's Federal Student Aid programs, and are usually the easiest to get student loan consolidation services for.
After student loan consolidation, the variable interest rate becomes a fixed interest rate for a set period of time. Many people suffer from bad credit and this can cause problems with trying to obtain that all important college loan consolidation funding but if you utilize services of a federal-based company, they don't do any credit checks and the top benefit of all, student loan consolidation is considered as good debt and will be more appealing to any future lenders. The Federal Student Loan Consolidation Program lets anyone with more than $7500 in outstanding Federal student loans (including PLUS loans) to reduce their monthly student loan repayments and lock in a low fixed interest rate.
Federal loan are sent to the controllers office at your school, you then sign it over to the school and it is applied to the balance owed to the school. Federal Loans and Private loans cannot be merged when you opt for student loan consolidation. Federal student loans offer low interest rates and deferred payments. Federal student loans are some of the most affordable loans available to students and families, with interest rates lower than most other forms of financing and deferred payments (principal and interest) until after graduation.
By consolidating your federal student loans first and improving your credit score, you could get a better interest rate. Anyone with outstanding non-federal education-related expenses is eligible to apply for a Private Consolidation Loan. Students can consolidate while still in school, during the six-month grace period immediately following graduation or during the repayment period. A student loan consolidation program is a lucrative and efficient way for students to deal with student debt.
Federal student loan consolidation amalgamates all your existing loans into one single loan which will show a good future payment history, which will help you improve your all important credit score. These student loan consolidation benefits could save you hundreds, even thousands of dollars in additional interest over the term of your loan. Federally funded loans are initially administered through the US Department of Education's Federal Student Aid programs, and are usually the easiest to get student loan consolidation services for.
After student loan consolidation, the variable interest rate becomes a fixed interest rate for a set period of time. Many people suffer from bad credit and this can cause problems with trying to obtain that all important college loan consolidation funding but if you utilize services of a federal-based company, they don't do any credit checks and the top benefit of all, student loan consolidation is considered as good debt and will be more appealing to any future lenders. The Federal Student Loan Consolidation Program lets anyone with more than $7500 in outstanding Federal student loans (including PLUS loans) to reduce their monthly student loan repayments and lock in a low fixed interest rate.
Federal loan are sent to the controllers office at your school, you then sign it over to the school and it is applied to the balance owed to the school. Federal Loans and Private loans cannot be merged when you opt for student loan consolidation. Federal student loans offer low interest rates and deferred payments. Federal student loans are some of the most affordable loans available to students and families, with interest rates lower than most other forms of financing and deferred payments (principal and interest) until after graduation.
By consolidating your federal student loans first and improving your credit score, you could get a better interest rate. Anyone with outstanding non-federal education-related expenses is eligible to apply for a Private Consolidation Loan. Students can consolidate while still in school, during the six-month grace period immediately following graduation or during the repayment period. A student loan consolidation program is a lucrative and efficient way for students to deal with student debt.
Subscribe to:
Posts (Atom)
Posts
