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Debt Consolidation Program

The economic crisis has really put the strain on a range of different people, in all different professions and if you've found yourself sinking deeper and deeper into debt, you're not alone. You're not alone, and there ARE solutions. If you haven't considered a debt consolidation program yet, prepare to learn because they are the way hundreds of people are taking back control of their finances and learning to manage money in a way which they will benefit from for the rest of their lives. If you're surrounded by friends who are already on top of their finances, it can be difficult to find someone to talk to. Often, people who aren't in debt and haven't experienced it struggle to understand people who live with it every day. They don't realise that you're not in debt because you spent $3,000 on a coat; you're in debt because you have to pay rent, phone bills, electricity, and transport and still find a way to feed yourself. The pressure of people who think it's "easy " can be a real mental downer and isn't a good way to regain power of your money.

The Benefits of Debt Consolidation Programs

The benefit of a debt consolidation program is that once your debts are paid off and you have one larger debt to pay back, it's much easier to keep track of. How much money is paying off the capital debt and how much is going on interest? When does it need to be paid? How does the timing of those payments coincide with other household bills and expenses which come up during the month? Debt is not a thing to be ignored and once you know exactly where your money is going, when, it becomes much easier to spend according to your income.

The Types of Debt Consolidation Loans

There are two basic types of debt consolidation loans you can take out in order to consolidate your debt: an unsecured loan, or a secured loan. It's important to weigh up your individual scenario against the pros and cons of these options in order to select the solution which works best for you! If you do have extensive debt, you probably have a bad credit rating and this can be a real problem when it comes to finding a lender who will take you on. Investigate your different options and don't just stop at one bank or credit union because you've been with them your whole life. Shop around! You wouldn't stop at one store if you were going to buy a fridge, would you? A loan should be no different. Unsecured loans are usually smaller loans which you can take out through a regular account or on a credit card. Lenders will have specific programs tailored to meet the needs of people with bad debt, or bad credit ratings. Because they are unsecured the interest rate will often be significantly higher than that of a regular loan or credit card - this is how the lender justifies taking the risk of lending to you. It can help if you take the time to foster a personal relationship with your lender - not only will they become more willing to help you tailor a loan program specific to your ability to pay back, they might also show more leniency should a situation arise when you are unable to make a full payment. It is also possible to find some really good small, unsecured loans by researching debt consolidation loans online. Secured loans are for deeper debts which you might not be able to consolidate on a credit card or with a small loan. The loans are most often secured by signing collateral - for example, by signing the deeds to your house or property as a mortgage you then pay off. Because the lender has the security of this collateral when lending to you, the interest rate will usually be lower than that of an unsecured loan. However, the life of the loan is often much longer and it's important to note what percentage of your payments are directed at the capital of the loan, and what percentage is paying interest. If you want to look into debt consolidation loans online for significant debts, it is a good idea to go and talk to some lenders face-to-face first, to get a good idea of the types of services and fees you should expect.

Considering Debt Consolidation?

If you are looking at debt consolidation loans, however, they are only the first step in solving a larger problem. Investing in your education, and learning how to manage your money is just as important as learning to do your job well. Are you spending according to your income? Is the majority of your money being spent on rent, or food, or bills, or clothes or entertainment? Maybe it's time to look at renting somewhere a little cheaper. Maybe you could cook at home more. Maybe you should limit the amount of money you spend out with your friends each week. With careful planning, your finances will be under control in no time and if you stick at it, eventually it will become so natural you won't even think about it! Invest in yourself, master the use of your money and learn a lesson which will help you in the years to come.