Secured Debt Consolidation Loans – All You Need to Know

looking for secured debt consolidationIf you are mentally unsettled due to the burden of debts, a fine solution is to opt for secured debt consolidation schemes. These schemes provide you with an open invitation to become free from your existing debts while being at your own terms and conditions.

What is Secured Debt Consolidation?

Well, it is a specific way to get your debt consolidated while providing security deposit, in terms of assets for the loan amount you are seeking.

Secured debt consolidation is a way to consolidate debt when you have security to pay for the loan you are borrowing. When you speak about secured debt consolidation loan, there is, basically, no fixed scenario to work on. The scenario changes for everyone according to the situation and the volume of debt. Secured debt consolidation schemes are perfectly apt for all those people who are suffering from the burdens of multiple debts (medical bills, educational loans, credit card debts, etc.).

What are the Conditions?

In order to acquire secured debt consolidation loans, you need to provide security assurance; in terms of mortgage of suitable assets like, home, car, bonds and stocks, and every other collateral being accepted. Any amount for loan that exceeds £5,000 requires the proper consolidation of funds. There are many lenders available in the market who offer suitable debt consolidation schemes, according to the customer’s present debt repayment condition. A lot of these lenders offer consolidation loans at lower interest rates, while ensuring the best flexibility when it comes to the repayment terms. But, wait, there is also the risk of losing the assets that are mortgaged, in case you fail to repay the debt.

Why is Secured Debt Consolidation Advantageous?

Secured debt consolidation schemes can be extremely beneficial. They come with much lower interest rates than what you are presently paying for the loans. At the same time, the monthly repayment amount is also lower than you may have expected. If you go through online debt consolidation reviews, you would know that the monthly repayment for such loans are dependent entirely upon the terms and conditions, associated with the same. Extending the repayment tenure results in lower monthly payments. However, if you want to get rid of the debt burdens faster, you need to shorten the loan repayment tenure. This means that you have to pay more on a monthly basis to clear off the debts. Whatever terms you choose for the repayment part, always make sure that the interest rates are lower than your actual debt repayment situations.

It could be really tempting to get all your existing debts packed into one single loan and enjoy a single repayment amount on easy monthly installment scheme. However, you must consider the terms and conditions, associated with the consolidation scheme before availing the same. Understand the guidelines that are associated, with consolidation of debts. Remember, there would be security deposits through mortgage of land or other valuable assets. You may lose these assets, if you miss a couple of months’ payment.

Debt Consolidation – Important Details You Must Know before Opting for the Process

Are you planning to consolidate your credit card debts? If yes, you must know that the term, debt consolidation, refers to the consolidating all your credit card debts into one, so that it is easier to pay them off. As the process involves collecting all your bills into one, it is also known as bill consolidation. Irrespective of the term you use, it is pertinent for you to consolidate your credit. Before you can pay off your credits, you must know about some of the necessary details of debt consolidation.

In this article, let us discuss some of the details that can help you in accomplishing debt consolidation.

# Reading the signs that can tell you it is time to consolidate your loans and debts – Below are the signs that can help you in realizing you should consolidate your loans and debts.

  • Your credit card balances are not decreasing, but growing.
  • Your expenditure is more than your earnings.
  • You are paying only the minimum payment on your debt and that too, with great difficulty.
  • The interest payments on your credit card debt is becoming more than the amount, which is purchased every month.
  • You have debt on more than five credit cards and you are approaching the credit limit on the cards.

In reading all these signs and taking the proper measures, you can take the help of a non-profit credit counseling agency.

# Options for consolidating your debts – There are many ways through which you can consolidate your loans. One among them can be borrowing money from your friends and family. Another option can be opting for a debt consolidation loan. The money you borrow or take as a loan can help you in paying off the credit card debts. Once that is done, you can make regular payments to your friendly lender or the place from where you have taken the loan.

In consolidating your debt, you can also take the help of a credit consolidation company. This can be a very beneficial option, as you would not have to pay high loan origination costs. A reputed credit consolidation agency can also help you in getting lowered interest rates, with your creditors.

Other benefits you can reap by hiring such an agency are – less risk of paying late or missing a payment, fewer late fees, not having to pay individual credit card debt and the facility to access a lower interest rate. All these can assist you in paying off your debts faster. Such agencies can also provide you with debt counselors, so that you can get the necessary assistance in going through the course and paying off your debts in the long run.

These are the details that can help you in debt consolidation. Once you are familiar with these details, you can choose the method of debt consolidation that you think would be the best for you. Thus, select a suitable method and consolidate your debt, as soon as possible, so that you can remain free from worries.

Finance- How a Debt Consolidation Loan Works

Debt consolidation refers to a debt refinancing solution that involves using one loan to help you pay off multiple loans. Various consumers opt to consolidate their loans as an effective way of dealing with high levels of debt. The process makes it possible to secure a reduced interest rate that will cover the whole debt along with the convenience of focusing on a single loan.

Debt

Money that is owed to one entity by another entity is commonly known as debt and is usually subject to principal repayments as well as interest. Interest is determined by the creditor who charges the debtor a fee that is based on a percentage of the total sum of the principal on an annual basis. This percentage is the interest rate that is usually paid at monthly intervals.

Loans may be unsecured or secured with a form of collateral. Consumer debt ranges from credit card debt to mortgages. The amount of debt a person has can rapidly increase and reach a level that puts the debtor at risk of a financial crisis and bankruptcy.

Debt Consolidation

  • There are different options that are available for consumers who are overwhelmed by debt and these include debt consolidation. This is an option that enables the person to clear debts that are currently owed when they take out a new single loan. Most of the debt, particularly high interest loans can be repaid through another loan.
  • Various lending institutions offer consumers a debt consolidation loan. A key advantage of this refinancing solution for consumers is the lower interest rate. Repayment may be spread across a longer period. Debtors are issued with loans that help them repay outstanding debt while providing another loan on the lender’s new terms.
  • Consolidating several loans into new loans with single payments can help people lower their monthly costs, increase their cash flow, become more organized and ease the stress that arises from making numerous monthly payments.

Process

Consolidating debt effectively is a step by step process that ideally begins with making a list of all your loan balances. The list should also consist of the monthly payments for each loan and the interest rates. Consider the different consolidation options that you can choose from, which may be secured or unsecured loans.

You will be able to consolidate different debts into one loan and a single monthly payment. The goal is to qualify for a reduced interest rate for the entire loan in comparison the current interest rates. Regardless of the consolidation option that you select, the process is generally the same. Rather than numerous debt payments being made each month, you will only deal with one payment.

Conclusion

A primary objective when consolidating is to reduce the interest rate as much as you can. When you identify a suitable option for your needs, you can proceed to clear outstanding balances. If there is an extra amount of money that you are able to save every month, this will help you reach your savings target. People who are facing major financial challenges can consult debt specialists and lenders who will work with them and provide a viable solution.

10 Mistakes Consumers make when looking for Debt Consolidation Loans

If you are deeply in debt like most consumers, it is likely you are looking for the easiest way out of the rut. Of course no one likes to be in debt, but the economic environment has pushed more Americans into debt. While there are signs that the economy is improving, the reality on the ground is that most households are juggling myriad debts.

It is no wonder then that financial advisors have come up with innovative solutions to help debtors cope with their loans. Debt consolidation has been hailed as one of the best ways to manage debt and get back on track quickly. However, there are many phony agencies and companies that are now scamming desperate customers with the promise of wiping away their debt.

Every consumer would like to get a quick way to settle their debt and this has led to proliferation of online scams. If you are looking for a reliable way to handle your debt, consolidating your loans is the best solution.

To avoid getting ripped off, here are some mistakes to avoid when looking for a debt consolidation loan:

  1. Failure To Confirm How it Works

Most consumers look for solutions in a frenzy when things are really bad. Online scammers understand how desperate you are, and if you don’t know what you are looking for, you end up getting burnt. Debt consolidation entails bundling all your loans together to make it easier to handle the monthly repayments. The new loan will be repaid monthly and you will enjoy lower interest rates. Instead of repaying several creditors, you will now have just one to deal with.

  1. Falling for Debt Settlement Scams

All borrowers would like to wipe their debts in a few steps and this is what scam artists bank on. When you see an agency claiming it will help settle your debts in a few steps, run and don’t look back. Debt consolidation is not the same as debt settlement. You will repay your small loans and remain with one large repayment. There are no negotiations involved as opposed to debt settlement.

  1. Poor Research

If you want to get out of debt safely, make sure you research the options available and the debt consolidation service to use. Compare the different debt consolidation solutions including the secured and unsecured loans, debt management, debt settlement, bankruptcy, among other debt solutions. More importantly, take time to compare myriad debt relief options available to avoid falling for a scam.

  1. Not Seeking a Second Opinion

When it comes to making financial decisions, nobody wants to be told they are wrong. However, the truth is that most people make emotional decisions while a second opinion would have helped them. If you are looking for a debt consolidation loan, talk to a trusted independent source. If possible seek references from people you trust before choosing any debt consolidation program.

  1. Failure to Leverage Online Reviews

A simple Google search is enough to help you identify a scam from a mile away. Take time to read reviews and testimonials from other users.  If there are any complaints regarding the company you want to use, keep looking. Consumers rapidly share information online making it easier to spot a scam from a   mile away.

  1. Failure to Check with BBB

The Better Business Bureau (BBB) is a treasure trove for anyone researching a debt consolidation scam. A simple search on BBB shows you how many complaints the company has and if they were resolved. The company’s rating will also help you determine the level of service to expect. If the company has unresolved complaints, keep looking.

  1. Failure to Compare Rates

It is understandable that you are in a rush to consolidate your loans, but maybe a little more research will help you find better rates in the market. Your bank might not be the best place to look for such a loan because they might not even have the product. If you have a loan with them or if you have poor credit rating you better look for credit agencies that will provide a tailored loan product.

  1. Don’t Read the Terms and Conditions

Now that you have found the right lender based on their rates what else could go wrong? Well, many things can because the details in the contract might negate any of the benefits you had thought about the company. Make sure to check each of the details and if you have any queries get your loan assistant to explain. It is important to understand that debt consolidation is supposed to enable you to enjoy lower interest rates but if there are hidden charges in the T&C, you will still remain in a financial pickle.

  1. Don’t Talk to Your Creditors

If you are considering consolidating your debt, make sure you first talk to your creditors and confirm any charges that might be involved in case you repay all your debt. More importantly, confirm whether they will work with your debt consolidation company. If you don’t talk to your creditor you might be surprised to realize months later that they are still charging you though you repaid their loan.

  1. Don’t Bargain for a Better Rate

If you are looking for a way to manage your spiraling debt, consolidating all loans is a good decision but you must confirm about the rate. Take time to do the math and bargain for a better rate in order to leverage the benefits of loan consolidation.

If you want to avoid a debt consolidation scam, make sure you take time to research and always seek another opinion. If a company seems to pressure you into agreeing to a loan without first assessing your needs it is likely they want to rip you off. Make sure your creditors know about the plan to work with the debt consolidation company and take time to read the fine details of the contract. More importantly, compare as many companies as possible in order to find the best interest rate for the debt consolidation loan.

Huge debt burden?

Question by nomoredrama: Huge debt burden?
I am about to graduate with a bachelor’s in finance from a pretty good school but I’ve racked up about 70k worth of debt. I’ve estimated that my starting salary will only be about 45k-50k. Is there anyone else out there in the same predicament? How are you handling this? What’s my best path to relieve myself of this burden? Also, I would like to go to graduate school someday but I’m afraid if I add that on top of my current debt I’ll drown.

Best answer:

Answer by Anonymousgirl
Oh I’m in your boat. I think right now what you need to consider are a few options.

1. Consider getting your loans consolidated. If you loans were all from federal aid, it’s possible to get them all lumped into one loan with a better interest rate, and then make a payment plan with them.

2. If you have private loans, consider consolidating them as well if possible.

3. Start looking for cheap housing. Free up as much money as possible before you graduate. If you look into renting for 300-400 a month, all utilities included, you’ll be able to set up a budget every month to determine what is needed for bills/necessities, savings, and loan payments.

4. Work a couple of years before going to grad school. That’s what I’m doing. In fact (this is a very important part) so many people fly straight into grad school incurring more debt that they fail to realize that there are some employers who will PAY for you to go to grad school. As long as you are okay with going to the school they pick, they pay for your tuition, fees, and books (as long as your grades are high). During this time, they may ask that you work there for 1 0r 2 years before going to grad school.

What I am going to be doing is working a lot before I graduate and save. I’m already putting in money into a savings every month to help pay for my loans 2 years from now when the first bill comes. I’ve also cut my expenses down by getting a job that is closer to home (cuts on gas), I pay less in rent, and I got a higher paying job. All of those things allowed me to save on 350 every month.

Also, consider sitting down with a financial advisor who will do a free consultation. Explain your concerns and then you’ll be able to come up with a reasonable plan to help pay off your loans in 5-7 years (yes it IS possible) and still save money. Talk to your loan companies and see if they will be willing to work with you as well.

What do you think? Answer below!

Debt collection scam?

Question by intellectual dude: Debt collection scam?
I used to have a lot of debts so I took a break from my college career to work and deal with all those debts, so in 2004 I got a job and in 2005 I paid all the debt collection agencies to settle my accounts and all the phone calls and mailings stopped.

Then this year from out of the blue, I got two letters from two different debt collecting agencies asking me if I wanted to settle. I thought this can’t be right because I already settled all my debts in 2005. Why am I being contacted now, when everything was quiet since 2005 when I settled all my debts? Is this a scam?
One is for a bank account, another for a store card.

Best answer:

Answer by redhairedmama75
For starters are you 100% sure that everything was settled?

You didn’t forget anything?

Give your answer to this question below!