Debt Management: Lower Interest Rates

23. June 2008 admin

A professional debt counselor can help you lower interest rates on your credit cards. Many people dont realize that the majority of their monthly payments goes to pay down the accrued interest on their principal balance. The different between just a few percentage points is phenomenal, and can lower your monthly payments by a few hundred dollars.

Lower Interest Rates Equal Manageable Debt Payments
As an individual consumer, its hard to negotiate down your interest rate with your creditor. Professional debt counseling agencies maintain good relationships with creditors for negotiating purposes. Quality debt counseling agents know how to effectively negotiate with your creditors to lower interest rates on high interest credit cards.

Reducing your interest rate allows you to apply more of your payment towards your principal balance. Paying down the principal balance is the most effective way to quickly eliminate your debt. If youre not paying down your principal balance, youre adding years to the time youll be paying off that debt.

Making your monthly payments on time is crucial if you want to lower interest rates on your credit cards. A creditor is much more likely to reduce the interest rate for a consumer who pays them on time. Before you request lower interest rates, make sure that youve been making timely payments for a few months prior.

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Debt Management: Lower Payment

22. June 2008 admin

Attention consumers: Dont fall for the lower payment debt consolidation trap. As a consumer in debt, its important to spend the appropriate amount of time researching various debt reduction methods. Debt consolidation loans may seem ideal on the surface, but when you dig a little further, youll find that there are many consequences associated with these types of loans.

The Lower Payment Lure
The idea of debt consolidation may seem great at first. Theoretically, you get to pay off all of your creditors and have a lower payment that you pay back directly to the consolidation agency. There are a few things you should be aware of, however, before signing up for a debt consolidation loan.

Debt consolidation loan agencies retain agents that work on commission. Debt consolidation agents get paid when you take out consolidation loans, increasing the possibility that a loan agent will try to sell you a loan when you may not really need it. Its important that you conduct your own research on the various types of debt elimination to educate and protect yourself from misleading advice.

Debt consolidation loan agencies claim to pay off your creditors and provide you with a lower payment through their agencies, but many times fail to accomplish this. In many cases, debt consolidation loans simply replace your other debt payments with one higher interest rate loan. Some debt consolidation loans can charge up to 21 percent interest, and the agencies will charge you fees for their advice and assistance. Look into all of your options before jumping into a high fee consolidation loan.

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Debt Management: Past Due Letter

21. June 2008 admin

If you receive a past due letter in the mail, it unusually means that your payment is already 30 days late. Receiving a letter regarding a past due payment does not necessarily mean that youve already been reported to the credit agencies. If you receive a letter, however, it is crucial that you pay prompt attention to the matter.

What to Do If You Receive a Past Due Letter
When you receive a past due letter from a creditor, the first thing you should do is call the credit department of that particular company. Explain to the credit manager that youre very sorry that you missed your payment and that youre making the payment as soon as possible. In some cases, the credit manager may allow you to make the late payment without incurring any penalties.

The next thing to do is to get that payment in the mail! If a payment continues to be late, youll receive several warnings from that companys credit department. If you still neglect to make your debt payment, that company can file for a letter of judgement from the court. Once a letter of judgement is filed against you, youre in for a big hassle!

If youre working with a professional debt counselor, call him or her before you contact the company on your own. You debt counselor will know how to best handle the situation, and can help you avoid any further repercussions. Receiving a past due letter is something that must be taken seriously and you should take action immediately. It will help if you dont think of your creditors as the enemies. If youre willing to work with them, theyll often be willing to work with you.

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Debt Management: Personal Bankruptcy

20. June 2008 admin

If you think that filing for personal bankruptcy is going to help solve your debt problems, youre sorely mistaken. Filing for bankruptcy is the worst possible option for consumers who want to eliminate their debt for a variety of reasons. In some cases, filing for bankruptcy can even be more expensive than actually paying off your debt.

Why You Shouldnt File for Personal Bankruptcy
Out of all the debt elimination options, bankruptcy has the furthest-reaching consequences. In many cases, youll need to hire an expensive bankruptcy lawyer who can end up costing you just as much as your debt payments. Filing for personal bankruptcy does not eradicate all of your debt. School lenders, government loans, and even car loans are just a few of the debt payments that bankruptcy wont solve. In addition to plaguing your credit score for years to come, filing for bankruptcy may even affect your ability to travel overseas!

You can avoid filing for bankruptcy by negotiating, or settling debt, with your creditors. A company knows that if you file for bankruptcy, it wont be able to collect any money and will be willing to settle the debt amount owed. You should use a professional debt counselor for the negotiation process, as your debt counselor will certainly be familiar with the ins and outs of various negotiating issues.

Debt settlement is the most equitable solution for all parties involved. There are many online resources for consumers when it comes to bankruptcy information. Take some time researching personal bankruptcy and debt settlement. Make an informed decision before you participate in any debt reduction program.

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Debt Management: Personal Debt Consolidation Loan

19. June 2008 admin

Before taking out a personal debt consolidation loan, talk to a few experts who dont have an axe to grind. Its often said that if you want good advice, you shouldnt go straight to a salesperson. If youre considering debt consolidation loans as an option for reducing your debt, make sure that youve done your research first.

Checking up on a Personal Debt Consolidation Loan
Its important to consult with an unbiased debt counselor before you sign up for a personal debt consolidation loan. In fact, you should take the time to consult with a few agents. You may just realize that you dont need a loan after all. Search online for a few debt counseling agencies, then find one or two of those agencies that you feel comfortable working with.

Many debt counseling agencies offer a free evaluation for your personal debt situation. Dont be afraid to sign up for a free debt evaluation. In about 10 minutes, youll be able to determine whether or not you feel comfortable working with an agent.

The Internet is a great resource for learning about the pros and cons of a personal debt consolidation loan. Make sure youve done your own research and consulted with an agent who doesnt solely offer consolidation loans before you take out such a loan. There are many negative aspects of consolidation loans that you may not be able to detect on the surface. If possible, find another route for reducing your debt. They do exist!

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