What is Debt Consolidation
Credit Card Debt Consolidation
Medical Debt Consolidation
7 Tips About Debt Consolidation
Common Debt Consolidation Mistakes
Debt Consolidation
Risks of Debt Consolidation, Types of Debt Consolidation Loans, Pros & Cons
Balance Transfer or Debt Consolidation?
Debt/Credit Calculators
 
Discussion Forum
 
Credit Counseling and You
Non-Profit Credit Counseling
 
Consequences of Credit Card Default
Effects of Credit Card Default
9 Common Credit Card Mistakes
Eliminate Credit Card Debt in 90 Days
Credit Card Debt
10 Expenses You Can Not Afford If You Have Credit Card Debt
Truth About Credit Card Companies
Should I Tear Apart My $300 Limit Credit Card - The Worst Credit Card Ever?
Disputing Credit Card Debt
401k vs Credit Cards: Where to invest?
 
Debt Settlement Letters
Sample Letters
Write a Powerful Debt Validation Letter
Reputable Debt Settlement Agreement
 
Debt Settlement vs. Debt Consolidation
Dangers of Debt Settlement
Avoid Debt Settlement Pitfalls
Debt Relief Tools/Debt Management Programs
Debt Settlement FAQs
Is Debt Settlement Money Taxable?
 
Reduce Medical Debt
Free Bill Consolidation: Does it exist?
Budgeting to Stay Debt Free
10 Debt Reduction Mistakes
Should I Pay Off my Debt or Save Up for a Down Payment on a House?
Bill Consolidation
Three Secrets to Lowering Your Debt
Tips To Lower Your Bills
 
Government Debt Help
Debt Help During Recession
Debt Relief During a Recession
What Debt Relief Means
 
Pay Off $50,000 Debt
Worried About Bills?
Money & Debt Videos
Report Illegal Collection Activity
Managing Medical Bills
Medical Debt & Bankruptcy
The Facts on Debt
Debt Quotations
Drowning In Debt?
Who to pay first?
Managing Debt FAQs
Medical Debt Solution
12 Hot Tips for Eliminating Debt
7 Debt Elimination Mistakes
2 Ways to Achieve Debt Elimination - Debt Snowball Elimination Method
 
Payday Loan Consolidation
Payday Loan Debt Consolidation
Payday Loan Relief
Default on a Payday Loan?
Payday Loans | Consumer Information
Problems with Payday Loan Stores
Bad Credit Loan Relief
How Payday Loans Work
 
What is Loan Consolidation?
How to get a $50,000 loan
Get an $80,000 Loan
$100,000 Loan for Debt Repayment
Veteran's Home Loan Refinance Options
Government Loans vs. Private Loans
Finding a Government Loan
Student Loan Consequences
 
Reputable Debt Consolidation Companies
Debt Consolidation Company Reviews
Reputable Debt Management Companies
List of Debt Companies in USA
Debt Companies By City
 
How Debt Affects Your Credit
What is shown on my credit report?
Improve Your Credit Score
Correct Credit Report Errors
Can Debt Settlement Ruin Credit?
Can Debt Negotiation Ruin Your Credit?
 
401k Limits
Safe CD Rates
Financial Planning
Banks versus Credit Unions
AMEX Horror Stories
IRS Tips For Audit
Choosing a Tax Preparer
American's not planning for long term care
Understanding Usury Laws
Unemployed During A Recession
FREE Government Grants
Where does money really come from?
 
About Us
Contact Us
6 Payday Loan Debts Owe
Borrow a Loan to Pay Off Payday Loan?
My husband was out of his job and Payday Loans were rolling over

Debt Consolidation Facts

1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair Isaac).

2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% - 30%!

3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.

Tips for a Successful Debt Consolidation

If you have a huge credit card debt bill on which you are paying high interest rates, you should consider using the equity built up in your home to finance a debt consolidation loan. This type of a loan is called a home equity loan.

A home equity loan has the following characteristics:

  • A home equity loan draws on the equity built in your home as collateral. This means incase you fail to make your monthly payments, the bank can possess your home (collateral).
  • A home equity loan (if used correctly) could lower your debt without affecting your credit rating.
  • A home equity loan is also known as a secured home equity loan.

Consider the following tips if you want to take out a home equity loan:

1) Be aware that your home could be foreclosed if you cannot afford to keep up with the monthly payments towards the home equity loan. If you have even one small doubt towards keeping up with the monthly payments, then do NOT take out the home equity loan. Do not rely on that employer advance or job promotion to help you pay off your home equity loan. There is no guarantee that you will get the job promotion!

2) If you take out a debt consolidation loan, you do NOT qualify for bankruptcy protection in extreme financial emergencies such as loss of spouse, loss of job, disability, etc. This is because by taking out a debt consolidation loan, you are turning all of your unsecured debt towards secured debt (your home is the secured collateral). However, if you had kept all your debt on your credit card and NOT taken out a debt consolidation loan, then you would still qualify for bankruptcy protection if you need it.

3) Most consumers who take out debt consolidation loans go on a shopping spree right after. This is because they feel they have more disposable income freed up every month and have more money to spend towards unnecessary lavish luxuries. This ends up in the consumer being able to only make the minimum monthly payments and carry a high debt balance. The root of the debt which is the consumer's spending habits have NOT changed. Its only that money has been freed up for a short period of time, only to accumulate more debt.

4) If you have problems budgeting your monthly expenses or overspending your money, you should consider a debt settlement consolidation program, which forces you to change your spending habits and NOT just put all of your shopping into your credit cards.