Four Ways to Consolidate Debt

Robert Zangrilli is the CEO of Franklin Debt Relief, a leading debt reduction service for consumers.

When you’re carrying balances on several different credit cards, the majority of your monthly payments goes towards interest. Only a small portion of your payments actually goes towards reducing the existing balance. Consolidating all of your debt into one payment enables you to pay down the balance more quickly. There are several different ways to accomplish this.

Consolidate Into One Credit Card
If one of your credit cards has enough available credit, it might save you money to transfer the balance of all your other credit cards onto it. To determine if this option is right for you, you’ll need to consider the interest rates on all your cards. If you have several credit cards with low balances and are paying a special introductory interest rate of five percent, you’ll ultimately end up spending more by moving that debt to a card with an interest rate of 14 percent. The best option would be to move all of your existing debt onto the card with the lowest interest rate.

Use the Equity in Your Home
Home equity loans and lines of credit usually offer a much more competitive interest rate than credit cards. And because they’re secured by your home, these types of loans usually offer a higher borrowing limit as well. A home equity loan is very similar to a traditional mortgage with a set start and end date, while a home equity line of credit is like a credit card where the balance can be reused as it’s paid down. These are excellent options for credit card debt consolidation with one caveat: if for some reason you can no longer make payments your home would be at risk of foreclosure.

Borrow from Your Life Insurance Policy
If you have a life insurance policy, you might be able to borrow against its cash value. Most insurance companies will not require you to make monthly payments on the loan as long as the amount you’ve taken is less than the cash value of your policy. Once your debt is under control, you should pay back the loan on your life insurance policy as quickly as possible. Otherwise, your death benefit will be reduced by the amount of your loan, and your survivors may not receive the money they need to make ends meet.
Borrow from Your Retirement Fund
Many retirement plans provide for loans at enticing interest rates, but there are some significant drawbacks to consider. The loan must be repaid within five years or you will be hit with penalties on your income taxes. If you change jobs, the loan will be due within two months or you will also be hit with penalties. As a result, this method of debt consolidation should be considered as your last option.

Government help with paying for school debt

A lot of people specially the youngsters who are completing their higher studies or have just graduated are looking for Government help with paying for school debt as they have seen or might have heard from any one about Government grants. Even nowadays there are lot of commercials on TV or on internet and also they are promising that it’s not a scam. Some are finding it so easy and thinking just a phone call or filling up a form can do, many of them are confused but remember Government grants is not a product so that you can go on researching and after that you buy it. Yes off course Government grants are free and to get it you need to follow some simple steps Discussed below:

1.Collect all your documents like birth certificate, social security card, and paper of tax of last 3 years. Also collect papers of your house, car if you owned.

2.Before proceeding further you need to keep in mind you can’t demand or ask anything specific on credit cards or grants for paying off debts. Thinking of those misleading ads on TV. Otherwise very soon you will find yourself out of Government office. You need to follow some rules and qualify for it.

3.Government grant program is based on state wise or county wise. So you need to collect proper information by making a phone call also you can find information on state government website or here grant.gov.

4.Do a little bit research work and Start with hospital bills first.

5.You can get grant for shopping but only if it is a uniform requirement and not for daily shopping expenditures.

6.There are many government grants programs and also some private non profit organization who are always willing to help those with good talent and hardworking students who have some vision to become a doctor, engineer or a scientist. But you need to find them and show what you can do if you get some financial support.

Debt consolidation a big hit

Human wants are unlimited in order to satisfy our needs,we take a loan for that particular need thinking that we will be able to repay in due time but some time things dosen't work the way we have planned and then the financial crisis starts that turns out to be a burden for us.

This is the time when we start thinking how to come off this situation and we start looking for debt consolidation companies for counseling .This is the place where debt consolidation comes up to solve your problem by free counseling and financial analysis.There are many debt consolidation companies which offer you free counseling and professional advice though there are several ways which help us to become debt free, but then i will always advice you to go for debt consolidation because debt consolidation dosen't mean only consolidation of debt but it is a complete debt management package .it helps in repayment process of loan and to re- structure the poor credit which starts with negotiation and ends to a debt free future.


How does it works?

when you go for a debt consultant for free counseling they at first start evaluating your financial situation ,like the no of debt you have,the rate of interest and penalties,any financial charges etc,after that debtors starts negotiation with the creditors and comes to final settlement.

1.The total amount of debt is reduced/eliminated which was built over by the rate of interest and other financial charges and penalties.

2You have to pay single monthly payment for all the debts.debt consolidation covers all the unsecured debts into one monthly payment that is to be paid to the consolidated company and the company will disburse the fund to all the creditors.

The amount of debt can be reduced by 40% to 60% to be paid within 12 to 36 months by a debt negotiation program.

3.You don't have to remember the payment dates for all the accounts so that there will be no chance for any late payment or any fine.

4.The average rate of interest for all the creditors is lowered to much extent which you used to pay earlier.

5.You will get rid off the harassing calls by the collection agencies,the consolidation agencies will be representing you on your behalf.

Thus a debt consolidation program plan will help you a lot in saving few bucks for some emergency.and make you free frm debt to live a better and stress free life.