Tag Archives: loans
Credit Counseling vs. Debt Consolidation – Which is right for me?
Debt consolidation and credit counseling are similar services that assist individuals in getting out of debt.
Debt consolidation agencies help to minimize interest rates and therefore the monthly payments. The replacement of several monthly loans by a single loan at a lower interest rate and sometimes with an extended repayment period can be of significant assistance to a person in debt. A single secure loan can lead to the interest rates dropping by as much as half. The debt consolidation company interacts with the collection agencies and credit card companies on behalf of their client and along with a reduced rate, they can also negotiate for elimination of late fees and a reduced balance. Debt consolidation is not applicable to secure loans such as mortgage loans and car loans but is very useful for unsecured credit card loans.
Debt consolidation is received well by the creditors who prefer it over bankruptcy. Debtors can get out of debt by using debt consolidation and maintain a good credit record, something which would not be possible if they filed for bankruptcy. Debt consolidators may charge a fee upfront or charge service fees; given that most debt consolidation companies are non-profit, these fees are usually quite affordable. Debt consolidation is ideal forsome people who wish to get out of a debt as quickly as possible without juggling their finances in a major way.
Credit counseling organizations also assist consumers in clearing their debts. Credit counseling organizations were first started by the credit card industry that was looking for a way to ensure that their debtors not file for bankruptcy. Consumers who participate in a credit counseling program normally have a certain amount of debt with reference to the monthly income. One may not qualify for a credit counseling program if in the creditors opinion the debtor has the income to make the payments.
Credit counselors interact with the creditors on behalf of their clients to secure a revised monthly repayment schedule, a reduction in the interest rate, or a waiver of the interest charges, if possible. Credit counseling services assist with unsecured debit like credit cards, auto loans, medical bills, attorney bills, etc. Well-established credit counseling companies can even negotiate with creditors on behalf of those who have defaulted on secured debt repayment and help them to pay the arrears as per an agreeable plan, thereby avoiding foreclosure and repossession. Credit counseling is recommended for those who wish for a complete alteration in their finance management and require assistance from a third party to assess their financial options. It is not uncommon for creditors to pay the credit counseling fees on behalf of the debtors in order to encourage them to repay the debts. Unlike debt consolidation services, credit counselors provide useful advice for not only getting out of debt but also staying out of it
Bad Credit Loans: Improve Your Credit Score
Bad credit is becoming a common problem now days. The people having bad credit are not able to get financial help easily. There are several reasons for the bankruptcy, these includes CCJs, IVAs, Defaults, Arrears, people who have previously filled bankruptcy and Late repayments. These profiles add a tag of bad credit holder with your name.
The credit history of a person is calculated on the basis of credit score that is assigned to each and every citizen of UK by the credit reporting companies. This credit score is based on the liabilities of a person. A score of below 600 is considered to be as bad credit score. There are three credit rating organizations in UK that provide free credit score details annually: Experian, Equifax and TransUnion.
Earlier it was really tough to survive with the bad credit score as no one was ready to lend money to these people. But now lenders are ready to lend money in form of bad credit loans to the people who suffer from this problem. All you need to do is to calculate the amount of money required by you and then choose a lender that suits to your conditions. There is only one thing that hurts the borrowers and that is high rate of interest.
There are two variations of these loans that are available to the borrowers; these are secured and unsecured Bad Credit Loans. The secured loans need a collateral deposit to be placed with the lender as a security. There isnt any such type of security deposit that should be kept with the lender in the unsecured loans. Bad credit is a problem but there are some advantages of these bad credit score loans. These loans are now available at a lower rate of interest as compared to the previous times. If you are paying off these loans on time, you wont suffer from credit problem any longer. These loans help to correct your credit score. Also these loans can be taken for any purpose by the borrower and the lender wont say anything regarding the need.