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
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% -
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.
Researching the Government Loan Programs
Mega corporations are receiving huge bailout loans from the government. Knowing our tax dollars are funding this massive debt, you may find it surprising that more people are not looking into loans and grants available from the federal government.
There are programs to help Americans deal with many aspects of debt. Job training can help stave off a painful lay-off while disaster loans are out there for those who have lost their homes or belongings due to Mother Nature.
Video: Truth About the Bailout
The range of loans is impressive. Businesses might qualify for loans from the Small Business Administration while farms can stay afloat from funding available through the Farm Service Agency. It’s easy to find these loans via the Internet. You can also contact your state government for more information.
Government Loans Versus Grant Money
Don’t confuse grants with loans. Grant money is given to you for whatever reason. That money is yours to use towards the reason you asked for it. A loan must be paid back over time at the designated interest rate.
Video: Using Grants to Consolidate Debt
Understanding Rates and Loan Terms
With federal college loans payments start while you are in college. If you take out a federal college loan for employment opportunities, make sure you have the means to pay on those loans while you are in school.
Federal loans are low-interest and available to low-income people. For example, the USDA’s Rural Development loans currently (2/2009) offer interest rates as low as one-percent for twenty-year loans for up to $20,000. It is an affordable way to avoid driving up credit card debt with necessary home repairs.
Can the SBA Help You?
The Small Business Administration offers loans to small businesses. The second most common reason businesses fail is due to a lack of capital. The SBA helps provide businesses with the money they need.
The SBA does not hand out the money to anyone. To apply and qualify for an SBA loan, you must meet their requirements.
You must have invested your own funds and time into your business.
Have solid collateral to cover the loan should your business fail. This may include equity or equipment.
Provide a solid business plan including profit and expense reports.
Possess the skills, education and/or experience needed to run that specific business.
Government Programs for Debt Relief
The government offers a number of loans that can help homeowners who have suffered a financial set back. Owners of homes in declared disaster areas are entitled to loans from FEMA and the SBA. Those at risk of foreclosure may qualify for a new FHA program called “Hope for Homeowners.”
Farmers and Veterans feeling financial strain may find programs for which they qualify to help them through these troubling economic times. Farmers may qualify for loans from the Farm Service Agency. Veterans can contact the VA for information on refinances, home equity loans and VA loans against their life insurance policies.
If you have college loans, the Federal Student Loan Consolidation program may be an option. Be warned, however, that Sallie Mae stopped participating in the program due to their financial crisis.
Career Advancement Possibilities
Those who have lost their jobs can check out a slew of offers providing educational loans. If you’d like to try out a new career, there are loans available for those willing to enter into the field of clinical research, health, AIDS research and similar fields.
Programs like the Nursing Education Loan Repayment Program are geared to help fill a shortfall in skilled professionals by providing college loans.
Spend a little time researching the programs that the government offers. You may find a loan or grant that can help ensure you make it through this economy and your financial crisis with a fresh new outlook.