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Before You Switch Wireless Carriers, Read This

Before You Switch Wireless Carriers, Read This

Although many people are fiercely loyal to their wireless carrier, there are those who have their reasons to want to switch. If you fall into the latter category, you will want to think about all of the details that go into finding the right wireless carrier for you. There are a lot of details to consider, which means you should ensure that switching is actually the right move. With that said, before you switch wireless carriers, you should consider these factors first.

Are You Free to Switch Carriers?

While wireless carrier contracts are quickly becoming a thing of the past in the United States, there are some consumers who may still be tied to them. If you are grandfathered into an old plan that has long since been obsolete and have been upgrading to new phones for very little to no money down, you probably still have a contract with your carrier. Ensuring that your two year period has past, you are free to switch to a different carrier if you fall under that category. If you are still in the middle of a two year contract, you will have a hefty early termination fee to pay if you leave before it expires.

Another scenario in which you might have difficulty switching to a new carrier is if you are still financing your current smartphone. These days, it’s commonplace for the major wireless carriers to require a monthly fee tied in with its service fee for paying off a phone. Most allow you to pay a certain amount for as long as 48 months. Once this fee is completely paid, you own your phone. However, if you choose to switch to a new carrier before completely paying off your device, you will either have to pay the rest or check whether the carrier you’re considering switching to will pay it for you.

Can You Use Your Current Phone on Another Carrier?

Another thing to consider when switching carriers is whether or not you can use your current phone on the new carrier’s network. Firstly, your phone has to be compatible, as in GSM vs CDMA technology. Carriers like AT&T and T-Mobile use GSM technology, which is what is used in most of the world, while Sprint and Verizon rely on CDMA. In certain cases, you will also have to have your phone unlocked if you plan on using it on a different carrier. Some phones, like T-Mobile’s iPhone 6s and 6s Plus, are factory unlocked, as are many Verizon phones. In the case of Sprint, you would not be able to use its phones on any network but its own because of the specific network bands within. If that doesn’t work you could always sell your used cell phone and use the cash to get a new one.

If you can have your phone unlocked by your current carrier and it is compatible with the network of the carrier you plan to switch to – for example, if you were switching from AT&T to T-Mobile – you can save money by relying on this method. However, other carriers may make you purchase a new phone, such as Republic Wireless.

Consider the Type of Plan You Want

Whether you are looking for an individual plan or a family plan is a factor to consider when planning on switching wireless carriers. Some options are cheaper than others, especially when you add multiple people to your plan. Most often, data is essentially available in a family plan as a shared bucket among everyone. For instance, if you have four people in your plan and 10GB of data, each person gets 2.5GB per month. If you want an individual plan, a prepaid carrier that allows you to build your plan might be the way to go.

Are Low Prices Important?

It’s important to consider prices when switching carriers. If having low prices is important to you, then you might want to go with prepaid carriers like Straight Talk or MetroPCS and bring your own unlocked GSM phone with you. That way, you don’t have to pay for a new device and you can enjoy lower monthly rates.

Consider Coverage in Your Area

One of the most important factors to consider when you plan to switch wireless carriers is coverage in your area. Depending on where you live, service will be excellent with some carriers but spotty at best with others. With that said, you might be limited on choices, so it’s best to do your homework and check coverage maps of your area. Visit various stores of wireless carriers and check them out as well.

These are the most important things to consider when switching to a new wireless carrier. You will have a better time of switching when you factor in each detail.

Why Debt Consolidation Can Be A Dangerous Way To Get Out of Debt

Why Debt Consolidation Can Be A Dangerous Way To Get Out of Debt

You have probably heard a great deal about debt consolidation, but do you know what it really is? It means taking out one loan to pay off others. You consolidate all your bills into one monthly payment that is more manageable. People who have a high amount of consumer debt often consider this option. The only problem with this arrangement is that most people bad credit who consolidate their debt only find that the debt seems to grow back. The problem isn’t with the debt but rather with the spending habits of the person. Unless a person learns to spend less and use cash, a debt consolidation loan is futile.

Why Consolidations Can Be Dangerous

Most people, who still have good credit, look for a consolidation loan to save them from the plethora of bills they pay each month. They may have fallen on hard times, had some unexpected events, and got in over their head. More often than not, these loans are bailing people out who have a spending problem. These people don’t have good money habits. They use credit cards to fund purchases they don’t need. If the behavior doesn’t change, then they will go right back out and run up their bills again.

Breaking Down The Figures in Consolidation Loans

Getting a debt consolidation loan is very appealing because it lowers the monthly payment. However, while the payment may be lower, the repayment term is extended. The debt doesn’t really decrease, rather, it will increase. You stay in debt for a longer period of time, and you will pay the lender more. In some cases, the interest rate is higher than what you were originally paying on your debts.

For instance, let’s assume you had $30,000 in total debt. This debt contained a two-year loan that was $10,000 with a 12 percent interest rate, and you had a $20,000 loan with a 10 percent interest rate. The total of the monthly costs for both loans is $1,100. By taking out a debt consolidation loan, your payment will be reduced to $640 a month.

A savings of $460 per month is pretty hard to pass up, especially if you are struggling to make the monthly payments. However, under your old loan terms, both of your loans would have been paid off within four years. Now, under the terms of your new loan, it will take you six years to pay off the debts. A couple years doesn’t sound too bad in exchange for a lower payment, but what about the final numbers. The actual amount paid is really eye-opening. The original loans would have cost you $40,392 in total. With the new terms, you will pay a whopping $46,080. The difference between the two is an astounding $5,688. Sure, they gave you a lower interest rate of 9 percent, but it didn’t do anything for you in the long run.

The Real Way to Get Out of Debt

There is no quick fix to get out of debt. What looked like an easy solution only cost you more in the grand scheme of things. The answer isn’t to lower the interest rate, payment, or to consolidate, the answer is to change your spending habits. To get out of debt you must change how you spend and what you buy. For instance, many people save a ton of money by eating at home rather than eating out at a restaurant. Make a budget and stick to it. Have a game plan on how you can save, and make sure you follow it.

If you are finding it hard to make it financially, then you may want to pick up a second job until you get some bills paid off. Learn to live on less and appreciate what you have. Bigger cars and homes are great if you can afford them. Many people get caught up in materialism, only to find out it is very costly to ‘keep up with the Jones.’ Debt consolidation is not the answer, and it is not a way out of debt. It is a way to free up more money to spend more. If you fix the real issue, then you will not need a loan.

Federal Loans vs Private Loans For Students

Federal Loans vs Private Loans For Students

While paying for a college education is important for many young people, the high cost of this education makes it a prospect that is out of reach for a majority of the population. If you don’t have enough in savings to pay for school, you will need to investigate both federal and private loan options.

Federal Loans for College Students

Federal loans operate as money from the government that helps college students pay for their postsecondary education. Since this type of money works as a loan, you will need to repay the loan after you graduate or leave school.

These are the four types of federal student loans that students and parents can borrow from the federal government:

To receive federal loans, students must submit the FAFSA (Free Application for Student Aid). The U.S. Department of Education will use the FAFSA to figure out how much you and your family will contribute to your college education costs. This is what is known as the “Expected Family Contribution” (EFC). If you want to use a federal loan to pay for your education, you will need to enroll in an accredited postsecondary program.

Private Loans for College Students

You can obtain private loans from financial institutions such as credit unions, banks, and other types of lending establishments. These types of loans can pay for educational expenses that occur after you have used grants, scholarships, and federal loans. The majority of private loans get borrowed in the student’s name. This means that it is your responsibility, not your parents, to repay this financial obligation. After you apply for a private loan, you can then use the proceeds to pay for additional expenses such as laptops, books, and transportation that you will use to get to and from school.

Private Loans for College Students: Pros

  • Simple application that doesn’t require you to make a trip to a bank or make a phone call
  • You won’t have to complete the FAFSA
  • You get the funds immediately after you’re approved
  • You can use a co-signer to get a better interest rate
  • You might have the ability to deduct the interest you pay on a private loan
  • Many private loans don’t have a penalty for paying off the loan early

Private Loans for College Students: Cons

While the pros of taking out a private loan appear long and full of upsides, there are possible downsides that can sour the process of paying for your college education. First and foremost, you will need to have good credit to take out a private loan. You do not need good credit to take out a federal loan as they are backed by the federal government. If you have a subprime credit score, you can get a co-signer. Private loans also have higher interest rates than their federal counterparts. You will also have to apply for funds every year. Just because you were approved for funds one year does not mean you will get approved for the next academic period.

Private loan lenders charge borrowers higher interest rates, so you should always explore options for grants, scholarships and federal loans before you investigate private loans. If you’re looking to attend a non-traditional program such as a culinary school, investigate whether your potential program is accredited by a regional educational body. If not, you will need to pay for the program with a private loan.

Paying for a college education is a huge investment in your adult life. Making decisions about higher education are more than just worrying about the numbers. However, you just can’t ignore the numbers altogether. By investigating all of your options now, you can save you and your parents both money and time.

Homeowners Can Benefit From A Home Equity Loan or Refinancing Their Home Loan

Homeowners Can Benefit From A Home Equity Loan or Refinancing Their Home Loan

There are many reasons a homeowner may want to refinance the loan on their home. This is attractive to homeowners who are searching for a way to lower their monthly payments. It also is appealing to individuals who want to pay off their home loans quicker. Should a homeowner want a lump sum of money using their home as security, they may be interested in a home equity loan. It’s important to weigh all the benefits against any possible disadvantages for both.

Refinancing

This enables homeowners to refinance their home loan to a lower interest rate. It also can provide a homeowner with more acceptable mortgage terms. In this situation, a financial institution will pay off an existing home loan and then provide a new mortgage. Once eligibility for refinancing is established, a homeowner can compare offers from different financial institutions. Refinancing is also a good way for homeowners to build up equity in their home faster. This can happen even as a refinance loan provides lower monthly mortgage payments.

Home Equity Loans

According to the Federal Trade Commission, this is a loan for a specified amount of money. This loan is based on having a home used as security to obtain the loan. A home equity loan is able to be repaid using equal monthly payments for a specified term. This is much like how a homeowner will pay their mortgage. The amount an individual can borrow for a home equity loan is usually 85 percent of their home’s equity. The ability to secure such a loan will depend on a homeowner’s credit history, their home’s market value and more. Should a homeowner fail to repay the loan, the lender is able to foreclose on the home.

Credit Scoring

If a homeowner chooses to refinance their mortgage or take out a home equity loan, credit scoring will play a role with a financial lender’s decision. This involves the homeowner’s bill-paying history. It will cover outstanding debt, late payments any collection actions and more. A financial institution will compare this credit history with others in a similar profile. A credit scoring system will then be used to determine points. This helps a lender determine who is most likely repay their loan on time.

Insufficient Equity

There may come a time when a homeowner does not have very much equity in their home but is in need of a loan. This could make it difficult for them to obtain a loan from a qualified lender. Should a homeowner be current in their loan, this can qualify them for certain government lending programs. A common government sponsored program is known as HARP. It is designed to help homeowners who have low loan-to-value (LTV) ratios. They can qualify if they have limited delinquencies a full year prior to refinancing and their LTV is 80 percent.

Home Equity Loan Benefits

According to Mortgage Calculator, a person is in need of immediate funds will find a home equity loan provides lower interest rates than other types of loans, as well as credit cards. It’s also possible for a homeowner to deduct the interest paid on a home equity loan on their taxes. A home equity loan will provide a lump sum of money. This enables a homeowner to pay off a number of different type of debts. Many homeowners use these funds for home improvements. This could increase the value of the home and pay for any expensive repairs. These funds are often used for debt consolidation. They can be used to consolidate credit card and other debt into one small monthly payment with interest that is tax deductible.

Refinancing Benefits

One of the main benefits a homeowner experiences from refinancing is a reduced interest rate. This will decrease monthly mortgage payments. During a homeowner’s working career, they will likely experience an increase in their income. Having a lower interest rate and lower monthly mortgage payment will increase their credit score. It may cause a homeowner to save hundreds of dollars a year. This can also be used to eliminate a balloon payment at the end of a mortgage loan. Private mortgage insurance (PMI) can also be eliminated. The purpose of PMI is to protect lenders from borrowers who appear to have a high chance of defaulting on a loan. This can be eliminated after refinancing if agreed to by the mortgage lender.

Which Of Nine Safety Technologies Will Save You Money On Car Insurance

Which Of Nine Safety Technologies Will Save You Money On Car Insurance

If you are in the market for a new car, it might be a good idea to shop around for ways to save money. Looking past the shiny new purchase and into your future budget can save you a lot of headaches down the road. When you buy a car, you also have to buy car insurance. Buying car insurance can be a fickle experience. It is calculated on your your driving history, type of car and sometimes, even the color of the car! Searching for options that are considered safe might put in good standing with insurance companies and let you save your dollars.

Airbags

Most newer model cars come with airbags. The standard options for airbags usually include two front airbags. Some newer models come with airbags that cover almost every area of the car. Front airbags, rear airbags, side curtain airbags, inflated seatbelts and now even pedestrian airbags offered by Volvo, that inflate the windshield if you hit someone, are there to protect everyone in and around the car. These options are sure to bring down your insurance rates. Even more important, they can save a lot of lives.

Back up cameras

These safety cameras are so valuable in saving lives that it was mandated that all passenger vehicles be equipped with them as standard equipment by 2018. Even the best drivers can’t always see what is behind them. While using mirrors and turning to see what is behind you has worked in the past and is even considered good on the driving exam, it is still not enough to protect a toddler or animal that might be under your license plate. Some even include trajectory lines and distance monitors. Having this camera in your dashboard is priceless.

Forward Collision warning with auto braking

This warning will stop the car if you don’t heed the warning. Although it is not standard, it takes collision warning to the next step by preventing crashes.

Blind Spot Warning – This technology uses a radar to alert you if something is in your blindspot. The icon on the dashboard will light up or you might get an audio alert if the object is too close.

Adaptive Headlights

These headlights move with the steering wheel to illuminate the road in front of you. This is sure to save you from deer or other wanderers on dark roads.

Voice controls

Much like the bluetooth options that can be used with your smartphone, voice controls use your voice to operate all of the functions in the vehicle. Turning on the windshield wipers, radio, answering the phone, or operating the windows, your hands can always stay on the wheel.

Back up sensors

If you can’t get a back up camera, this is the next best option. It alerts you if an object is too close to your bumper while the car is in motion. It is great for preventing scratches and accidents.

ESC or Electronic Stability Control

If your car is on a slippery surface, this feature will kick in to bring it to a halt. It will also keep it from flipping over. While it is standard in most vehicles made after 2012, it is good to add it to a car that you already own.

Anti theft Devices

To prevent your car from being stolen, you can add one or many devices to your car. Some of them include, a fuel switch that will keep the gas supply from reaching your car, a bar that keeps the steering wheel from moving, and a kill switch that is hidden and has to be activated in order for the car to move.

Adding this equipment to your car can save a lot of money. Other factors include the city that you live in, age. Four add-ons that will definitely save you money are airbags, anti-lock breaks, electronic stability control and adaptive cruise control that monitors if there are cars around you and the surface of the road and controls the car. Depending on which insurance company you use, other options could offer a discount on the premium. Check with your local agent to find out which safety features will save you money on your insurance.

What to Expect When Your Debt Goes to Collection

What to Expect When Your Debt Goes to Collection

If you have a debt that you cannot resolve quickly, you might find that your account has been transferred away from the company with which you do business. After a few months, most companies will transfer the debt over to a collections agency, a business that specializes in recouping lost money. These agencies can have a major impact on your life, and it’s important to understand the consequences of getting into this kind of debt. The problems you’ll face may be different than what you expect, as is the long-term damage caused by going to collections.

The Phone Calls Begin

Debt collectors will begin to contact you to get payment shortly after your account goes into collections. According to the Federal Trade Commission, the collectors have several avenues through which they may contact you. Most contact their debtors through mail first and then through phone calls. While the collectors are not allowed to call you at inopportune hours or at work, the calls can represent a very high level of stress for many. The calls themselves are rarely pleasant, even if the collector does follow the rules.

Phone calls from debt collectors are generally allowable from around eight in the morning until nine at night. The calls can interrupt family functions and place stress on those who can’t immediately respond. Unfortunately, this is both completely legal and something on which the collectors count. This helps put pressure on debtors to convince them to pay.

Credit Score Drop

Accordring to the FTC, accounts in collection are one of the major factors that will determine your credit score. Having an account go to a collections agency means that you’ve not only failed to pay off a debt, but that the debt has been delinquent so long that the original holder of the debt was forced to sell it off in order to recoup its profits. This, in turn, means that most lenders are going to be very wary of lending you money. While there may be good reasons behind your failure to pay, these issues don’t show up on paper.

Your credit score is presents the greatest point of leverage the collectiosn agency has over you. When you go into collections, you’ll be cut off from many avenues that would improve your life. It is more difficult, for example, to borrow money to buy a house or a car. It may also be more difficult to move into a rental unit, as many landlords now require a minimum credit score for new tenants. Unfortunately, the damage done to your credit score by an account in collections can last for years, and you may well have to deal with it long after you have paid off your debts.

Eventual Court Date

Finally, you’ll find yourself with a court date if you are not able to settle your account with the collections company. While most collections companies are fairly willing to work with debtors in order to resolve a debt with some kind of payment, they’re very tenacious when it comes to making sure they get their money. Remember, these companies are unlikely to pass the debt further down the line – if they don’t collect, they have lost money. As such, it’s entirely possible that the collections company will bring a lawsuit against you in order to recover its money. This, in turn, can lead to issues like wage garnishment if you are not able to pay on the court date. While frightening, this is also a realistic problem that impacts many people who have an account go into collections.

The collections process is something that can have many negative impacts on the life of a consumer. If you experience an account going to collections, it’s best to try to resolve the matter as quickly as possible. Working with a credit repair service may allow you to set up payments in a manner that works for you and eventually allow you to pay off the debt on your terms. Going to collections is not an ideal circumstance for anyone, but it may be the only way you will be able to pay off your debts on a schedule that works for you.

Top Reasons to Refinance Your Auto Loan Today

Top Reasons to Refinance Your Auto Loan Today

Consumers may be familiar with refinancing when it comes to home loans, but vehicle refinancing is often off of the radar. Your car loan can take up a large chunk of the monthly income, and this fact is true for the life of a 3-, 4- or 5-year loan commitment. Take a look at when auto-loan refinancing is right for your situation. You may be able to save some money on interest in the long run.

End of Lease Period

Car leases are popular because the payments are extremely low. They only reflect a fraction of the vehicle’s value, and you pay the monthly costs for about three years. At the end of this contract, you have the option of turning in or keeping the vehicle. Refinancing an auto loan is preferable when you want to buy the car from the leasing contract. You’ll need to finance the auto’s balance and remaining interest. If you plan on keeping the car for as long as it’s lifespan, this refinancing option is cost effective for most budgets.

Improved Credit Score

When you initially purchased the vehicle, your credit score may have been low. The resulting interest rate was high. Several years have passed, and now your credit score is much better. Ask several lenders for quotes on your auto loan. They should be able to beat your previous interest rate. By altering the rate, you can save hundreds of dollars over the life of the loan. If the rate cannot be lowered by at least one point, you may want to reconsider the refinancing option. Wait a few months until your score is even better and apply again.

Better Economic Landscape

At times, the national economic climate isn’t conducive toward borrowing money. Your original auto loan may have had a high interest rate even though your credit score was incredibly good. The prevailing interest rates dictated by the federal government were just too high at the time to avoid the high costs. It’s ideal to refinance your loan when interest rates drop by one or two points, states Bankrate. Your credit may be unchanged, but the lower interest rates will only help your monthly payment drop down to a smaller amount.

No Prepayment Penalties

According to the Federal Trade Commission, some original auto loans have prepayment penalties. Essentially, the lender doesn’t want to miss out on certain gains, such as accrued interest. When you initially apply and secure a loan, ask about these penalties and if they apply. It’s preferable to refinance an auto loan when there’s no prepayment penalties associated with it. If you’re unsure, ask the lender about the terms. They must disclose these details as financial professionals. A loan with a penalty may not be a good candidate for a refinancing process.

Financial Issues

Being laid off or terminated from a position is a difficult situation, especially with debts to cover. If you have a drop in income, try to refinance the loan. You may be able to extend the terms or lower the interest rate. With a new loan, you can afford the vehicle without harming your other finances. When you don’t have a current employer, however, find a suitable cosigner. You’ll still be able to refinance the loan while remaining financially afloat. Getting back on your feet with a new job will only improve your financial landscape.

Increase in Income

In contrast, try to refinance your auto loan if you have a significant income increase. A 5- or 6-year loan term might be reduced to three years so that you can pay it off faster than before. You’ll save on interest costs while removing this monthly bill from your income too. Calculate what you can put towards the vehicle while still remaining comfortable with other bills. Paying the car off faster is the best way to save money.

Work with a lender who you feel comfortable with during the refinancing process. There are many online and local lenders who can quote a reasonable amount for your borrowing needs. At the end of the day, you live with the loan terms so they should be customized to your monthly income.

Cash-Out Refinancing: When It’s Beneficial For You

Cash-Out Refinancing: When It’s Beneficial For You

When you invest in a property, you normally finance it through a fixed or adjustable mortgage. After a few years of paying your monthly amount, you might consider a refinancing with a cash-out option. This scenario means that you borrow the balance of your mortgage from a lender while taking an additional amount that’s based on the property’s equity. This refinancing choice isn’t right for everyone, so take a close look at the proper situation where you can ultimately benefit from this unique financial choice.

Lower Interest Rates

The United States government controls the interest rates so that the economy can grow at a comfortable pace. Cash-out refinancing is a smart idea when the rates are lower than your current mortgage. You can refinance so that the monthly payment is lower while still pulling some funds from the equity. You’ll end up with more cash in the bank for those major purchases while still paying a lower monthly amount. Ideally, the interest rate should be one or two points lower than your current rate to make the process worth your financial effort.

Improvements on the Home

Home improvements are a classic way of using a cash-out refinance. You might need to renovate the kitchen or add a room onto the structure. Cash-out refinancing gives you the extra cash that’s necessary for this purpose. An added bonus is that you’re reinvesting in the property itself. Although you take some equity from the home to pay for the improvements, the property’s value will ultimately rise as a result of those changes. Simply pick a project that’s a value to the home, and spend your money accordingly.

Paying Off Liabilities

You might have other debt that’s not associated with your home. These liabilities, however, make it difficult to afford your monthly mortgage. By consolidating your debt in a cash-out refinance, you can lower your monthly bills by paying off those liabilities. Student debt, car loans and other items are viable payoff choices that normally have high interest rates. Pay these off with the cash-out refinancing so that you can concentrate most of your income on the mortgage. Maintaining, keeping and building your home’s value should always be a priority.

Enhancing Your Credit Score

Your credit score affects almost every aspect of your financial health. Committing to a cash-out refinance means that you can pay off some debts that only improve your score. These scores depend on balances as well as the ratio between debt and credit. By paying off some debts with the cash-out funds, your debt-to-credit ratio broadens. Your score will rise, which can help you secure other loans in the near future. Pick your debts by interest-rate amounts. In essence, the most expensive interest rate should be paid off first.

Emergency Situations

Emergencies occur throughout your life, and big bills might be the result of these scenarios. If you’re struggling for cash associated with an emergency, a cash-out refinance may be your best solution. Growing medical bills, for example, are common reasons to pull cash out of your equity. Survey the situation carefully, however, because not every financial need is an emergency. Pulling out money will cost you in fees and interest over the years so be sure that the need is great before applying for the loan.

Finding a Lender

When you know that cash-out refinancing it right for you, find a lender that specializes in these transactions. Most banks will perform traditional mortgage and home equity loans, but cash-out refinancing isn’t always offered. Be honest about your borrowing needs so that a proper lender can be matched to your situation. They may need to find a package that has an affordable interest rate along with the loan value that’s necessary for the home. The refinancing process might take some time to complete, but you’ll have the necessary funds to improve your financial landscape as a result.

Interest rates change throughout the year so be aware of the current economic atmosphere. If rates are higher at the moment, you may want to wait several months for a better outlook. Although rates won’t change significantly, any drop in percentage points will save you thousands of dollars over the years.

Credit Card Consolidation and Bills Without A Loan

Credit Card Consolidation and Bills Without A Loan

Debt is a problem that plagues millions of people. USA Today released a story that said that two-thirds of Americans were behind on their debt. A wide range of solutions is available to help Americans to get out of debt. Debt Consolidation is one of the most popular solutions. Credit card debt consolidation is the process of merging one’s numerous accounts together to create one account. Many people conduct consolidation by taking out debt consolidation loans. However, consumers can conduct a debt consolidation in more ways than that. The following is some information about creating a debt consolidation situation without ever taking a debt consolidation loan.

Credit Card Debt Consolidation

It is possible for a consumer to conduct a debt consolidation using a high-limit balance transfer credit card. This option is only available to people who have excellent or good credit because they are the only people who have access to high-limit cards. A credit card debt consolidation can work wonders for such people by helping them to straighten up debt. The consumer can initiate the consolidation during the process of applying for the credit card. All that is necessary is that the applicant enter his or her account numbers and balances at the end of the balance transfer card’s application.

If the consumer gets approved for the credit card, the creditor will move all of the other accounts onto the card, and the cardholder can pay on all the debts at one time. The beauty of this type of consolidation is that the credit card is a revolving account. Furthermore, the credit card company may offer something like an interest-free introductory period. The consumer can take advantage of that by paying down debt diligently during the promotional period.

Finding the Right Credit Card

A vast assortment of credit card comparison sites is available. A consumer can find a card and use it to conduct a debt consolidation easily by using such a site. The two elements that will be most important are balance transfer options, introductory APR and credit limit. The limit on the credit card must be equal to or greater than the total amount of the person’s debt.

Debt Management Program

A debt management program is another option that a consumer can use without applying for any loan funds. The consumer uses a third-party company to help him or her to get back on track. This third-party company is known as a debt management company, and debt management is its sole purpose. People who work for such a firm are on the side of the consumer. They want very much for the consumer to get his or her life back like it was. Counselors are people who usually handle the cases and do all of the legwork in the client’s recovery process.

What Happens in a Debt Management Program

What happens first when someone contacts a debt management company is that someone from that company will request some information from the debtor so that the company can review the credit profile. The specialist will develop a special plan that will allow that person to assist the consumer with debt. If the debtor agrees to the arrangement with the debt management company, then the debtor will have to approve the debt management counselor to handle his or her affairs.

One of the first things that such a counselor will do is try to contact the creditors and get the balances down. The next step is coming up with the figure for the consistent once-per-month payments that the consumer will need to make once all the balances are reduced as much as possible. The monthly amount will include all payments to all creditors plus the fee to the debt management company. The consumer will begin giving monthly payments directly to the DMP counselor, and that person will make sure that it is evenly distributed among the appropriate creditors. A DMP program usually lasts five to six years.

The DMP and credit card consolidations are two popular alternatives to the traditional debt consolidation loan. Other options are available. Consumers can try rare but effective alternative options if these do not work for them.

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