This Week's Feature
Is Debt consolidation the right solution for you?
Today’s post is a guest post by David Brown, a financial writer with Oak view law group
Have you been hit by the money bug? Are you suffocating under the burden of multiple debts? Well, debt consolidation can be one of your options. However, you need to know certain things before you decide to consolidate your debt. Read on to know more:
How can debt consolidation help me?
- If you have a poor monthly income right now then debt consolidation provides you the option of making lower installments over a longer period of time. It might certainly suit your current financial condition
- If you have several loans right now then you might be facing a tough time calculating interest rates. With debt consolidation you take a single loan to pay off all your debts. So you can manage your finances in a more organized manner.
- You need not handle calls from the collection agency. The debt consolidation company does that for you.
What are the shortcomings of debt consolidation?
- In most cases debt consolidation loans are secured loans. This means that you have to pledge some asset (your car or your home) as collateral for the loan. So you risk losing your assets in case you fail to pay back the loan. You should be confident about health, job and other unpredictable issues which can cause financial trouble. To be eligible for unsecured consolidation loans you must have a pretty good credit rating. Even if you manage to get a unsecured consolidation loan with a poor rating, it will probably not be big enough to pay all your debts.
- Many people wrongly assume that all consolidation loans have low interest rates. However it’s a different story altogether. In most cases the payment is lower because of the extended term and not the interest rate. Secured consolidation loans sometimes have a low interest. But it can still cost you if you are taking a long term loan, say for 30 years. In such cases you have to pay interest for a long period of time and over the years the interest might grow even bigger than the original debt amount. Depending on your present debt, the interest rates for these consolidation loans can be more than those on the pre-existing debt. That is what makes debt consolidation a profitable business for your lenders.
posted 5 March 2010 @ 23:37 by Brad » 0 Comments
Previous Feature
Wednesday Links — March 3, 2010
I feel very far behind in my readings of the Economist this week, but I kept up with the blog world a little better than usual. Let’s do some links:
Couldn’t agree more with Miranda on physical gold. The slippage on entering and leaving physical gold is immense.
Great article by our friend Fred on green [...]
3 March 2010 » read » 0 Comments
Older Feature
How to Save When You’re in Debt
Saving can be hard in the best of times, but when you’re in debt it can be particularly. How can you save money when everything seems to be going to making your minimum payments?
Learn some basic advice for how to look at your finances and figure out how to pay yourself as well as your bills.
28 February 2010 » read » 3 Comments
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