Why an Alternative to Debt Consolidation Cannot Compete

By Andrew Baker
Watching your financial condition worsen, there will be many to offer you a word of advice along with their sympathy. The courses of action suggested will number as much as the number of sympathisers. This confuses the individual rather than offering recourse. In the following article, assertive arguments have been presented to show how debt consolidation, as a method of debt settlement, is the best available method in the UK. The methodology used by the loan providers to settle debts has also been explained in a detailed manner.

Debt consolidation is a credit agreement through which the borrower receives a loan for a fixed period or revolving credit in the form of flexible loan. Except for a credit arrangement that has been taken for the purchase of a particular item, the borrower can use any of the loans and mortgages available to consolidate debts. These include the following:

o Unsecured loan.

o Debt consolidation mortgage that involves taking an advance from the existing mortgage lender.

o Debt consolidation through remortgage that involves change of the mortgage lender.

o Debt consolidation loans.

When consolidating debts on account of loans and mortgages,
rel=nofollow [http://www.loansfiesta.co.uk/debt_consolidation.html]Debt consolidation will not be much advantageous. This is because the lender will surely repossess the item upon which the secured loan or mortgage had been secured. However, where unsecured loans form a majority of the debts, there is still a hope for rescue. A debt consolidation service provider plays an important role in this.

This does not undermine the role of the individual himself. The debtor can effectively counter the debts, provided he has time enough to expend on the debt consolidation process. This is where most borrowers lack. Thus, the task is passed on to the debt consolidation loan provider in the UK. Debt consolidation agency has the necessary expertise to deal with debt situations. Not only do these agencies help in the successful settlement of the debts, but also create savings for the debtor. More information on this function will be provided when we deal with the negotiation function of debt consolidation agencies.

Though the modus operandi of debt consolidation loan providers differs, it will have the following basic stages:

o Debt listing

o Creating a financial statement

o Deciding the amount of loan to be taken

o Negotiating settlement

Debt listing

Debt listing is the process by which the borrower lists down all the debts that he has incurred and that are remaining for fulfilment. Though a simple task, it attains dangerous proportions if not performed carefully. This is specially when all debts, whether big or small are not considered for settlement. Debts, which you would not have ever thought to become problematic, become so. The correct method of listing debts will be to note every debt on a particular date, the amount remaining unpaid on it, and the interest that it carries.

Creating a financial statement

The next stage is the creation of a financial statement. You would think what is the need for a financial statement when your finances are going in dumps. Preparation of a financial statement shows how much will a debtor be able to bear the burden of his debts. This is in sync with the principle that one must look into personal resources first before resorting to debt consolidation. If necessary, the services of an independent financial advisor be taken to compute the part of the income that can be pledged to debt settlement. The decision on the amount of loan or mortgage for debt consolidation thus hinges on the financial statement.

Decision on the amount of loan for debt consolidation

The proper measure of loan for the purpose of debt consolidation will be ascertained by deducting from the total debts, the value of help from personal resources. Borrowers however draw an amount larger than the debts so as to be used for other purposes like home improvements. Interest charged on debt consolidation loans is lesser. Cheap finance will be available through this method. Lenders do not restrict the use of debt consolidation loan for purposes other than debt consolidation. Debt consolidation agencies can further decrease the amount needed for settlement by negotiating the payments thus.

Negotiation of settlement

Proper negotiation on the part of the debt settlement agency is their USP (unique selling point). Borrower could have easily repaid the debts unpaid to the creditors. He engages the services of the debt consolidation agency because they can negotiate the payments well. Tactics like luring, compelling, etc are employed to bring down the repayable bill. Negotiation is a skill, and skill sets differ. So, when choosing a particular agency for debt consolidation loan, make a proper study of what the debt settlement agency can do for you. Consult with friends and relatives before making the lender choice. This function makes debt consolidation loans distinct from the other loans and mortgages available for the purpose. Only this method allows the borrower to gain from the expertise of the loan provider.

You would have been convinced by now that debt consolidation results into maximum benefits and the least of drawbacks.

Andrew baker has done his masters in finance from CPIT.He is engaged in providing free,professional,and independent advice to the residents of the UK.He works for the Secured loan web site loans fiesta for any type of loans in uk,secured loans,unsecured loans,debt consolidation loans please visit http://www.loansfiesta.co.uk

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Smart Way To Consolidate Your Debts Through The Option Of Online Debt Consolidation Loan

By Meghana D.P.
Consider online debt consolidation as a defense against debts if you are worried as to how to get rid of debts. If you are bound by debt and feel that your debt has become out of control- Don't Panic. All your worries can be stripped out just by the click of your mouse. If you are a person trying to find out strategies to overcome your debts you can consider the below given advantages of debt consolidation before taking any decisions or making the next move:

Clear all your debts in a shot

Single payment to be made

Single account can be easily managed.

Single lender.

Easy terms with low rate of interest

No harassing phone calls from creditors

One wrong decision can make you homeless, make you leave your job or damage your credit report. But one right decision of considering consolidation of all your debts will make your life debt free and thus tension free. Debt consolidation loans online can work wonders for you as you can relieve all your tensions by sitting in front of a computer log on to our site and get assured loan to consolidate all your debts. You need not fear about receiving notices or calls from your creditors anymore. Our skilled experts will provide you advice and help you make the best choice. We have helped thousands of people like you who were in debt and jittery over the thought of having debts. Online debt consolidation loans are the most commonly used debt solutions to become debt free with low rate of interests.

Is managing debt a difficult task?

We provide various debt consolidation loan services like cheap personal loan for consolidation, unsecured online debt consolidation loans , cheap debt consolidation home loans, instant onlinde debt consolidation loans and various other loans just to help you consolidate all your debts into one and relieve you from various kinds of debts to help you enjoy all the benefits of consolidating. Why not consolidate all your loans into one easy monthly repayment at low rate of interests and with flexible and simple terms and conditions than the earlier.

If you have chosen to deal with your debts now dont take a step behind but make use of availability of low rate debt consolidation loans both secured and unsecured loans. While you opt for secured online debt consolidation loans you can enjoy the benefits of low interest rate and by offering a collateral you enjoy additional benefits of preferential repayment terms and a chance to borrow more. Opting for unsecured debt consolidation loans will be a better option as it is risk free and pay off your debts at a reduced amount even without offering a collateral. So make your pick and go ahead to apply with us.

This is a one stop shop to ease you out of all your debts. You have come to the right place to make the right choice. We assure you a loan online debt consolidation loans fast and at easy terms which suits all your circumstances and constraints and relieve you of your tension.

finance consultant- For more information log on to: Online Debt Consolidation Loans [http://www.debt-consolidation-loans-ireland.co.uk/online-debt-consolidation-loans.asp]

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Debt Consolidation Loans - How Not to Get Cheated with Debt Consolidation Loans

By Fabio Marciano
Within this article on debt consolidation loans, there will be a discussion as to what a debt consolidation loan is as well as the pros and cons of using this versus other forms of loans to help you pay off your debt. Debt consolidation loans are especially good for when you need to consolidate credit card debt.

Many people are able to get themselves into debt to find that they struggle to get themselves out of this particular situation.

This article will help you decide whether or not debt consolidation loans will be for you as well as other ways in which you can manage your debt.

When to Use Debt Consolidation Loans

Debt consolidation loans are often used to consolidate all your debts into one single payment. The reason many people will look at doing this is to reduce the headache of having many different payments every month.

People will also do this so that they can see the total amount of their debt along with how much of their debt is being paid off every month. This can have good effects as well as bad effects and the next paragraph will focus upon the bad effects that can come from having debt consolidation loans.

The bad effects of debt consolidation loans are that many people see great interest rates for these loans but are not explaining that these rates which are offered often do not apply to people with high debt loads. These interest rates usually opt for people with stellar credit who have little to no debt.

Falling Into The Debt Trap...Again!


Debt consolidation loans can also encourage new debt to get as many people who take on a debt consolidation loan tend to find themselves in a similar situation within two to five years.

This paragraph will focus upon the good effects of debt consolidation loans. Debt consolidation loans can be very good for you because you are able to see all of your debts within one place.

Many individuals who have struggled with that do not realize how much debt that they have. When a person takes on debt consolidation loans, he or she is taking a step to try to manage their debt and this is something that many people are unwilling to do.

You can look beyond debt consolidation loans as an option as well. If you find that most of your debt is encompassed by credit cards, you could look at consolidating much of that debt onto a 0% credit card. I love to recommend this option as an easy solution for people looking to consolidate credit card debt.

The money which you have to pay in interest on a debt consolidation loan could be applied to the principal on your credit card. This will help you pay off your debt much more quickly.

Hopefully this article on debt consolidation loans has given you more information to help you make a decision when working on consolidating debt.

A debt consolidation loan can be very positive for you but it can also have negative ramifications so you must weigh the pros and cons before deciding upon this route.

Good luck in working towards developing a debt consolidation plan and getting a debt consolidation loan. Just remember that the sooner you start, the sooner you will be finished.

The key is to learn as much as possible about the options that are available to you, sort out which debt repayment options are best for you and take action...today!

Get your hands on free debt help resources designed to help you consolidate your debts at: http://www.payoffallyourdebt.com/free

Fabio Marciano is the author of The Secrets of Wealth and president of The Wealthy Pauper, a company whose mission it is to help educate people about investing, getting out of bad debt and personal development.

Article Source: [http://EzineArticles.com

How Can Debt Consolidation Helped Me To Become Debt Free

By Stephen James
Debt consolidation is the process of taking out one loan in order to pay off other loans(s). Consolidating debts can either involve consolidating from a number of unsecured loans into another unsecured loan, or more commonly it involves consolidating a secured loan against an asset that serves as collateral, (e.g a house). If this is the case, then a mortgage is secured against the house for security. Occasionally, debt consolidation companies will provide a discount on the amount of the loan. If the debtor is in danger of bankruptcy, then the debt consolidator can purchase the loan at a discounted rate. A keen-eyed debtor can then easily look around for other consolidator companies who will pass along some of the savings made. This however, can also affect the ability of the debtor to get rid of any debts during a period of bankruptcy, and so the decision to consolidate must be thought through carefully, ideally with the help of a professional debt consolidation expert. Also, debt consolidation is often recommended when someone is paying off a credit card debt. This is because credit cards often have a much larger interest rate than an unsecured loan from a bank would have.

Debtors with property like a home or a car may get a much lower rate with a secured loan using their house or car as collateral, then the total interest and the total amount of money put towards paying off the debt is much lower thus allowing the debt to be paid off much quicker thus incurring less interest in the long run. In reality though, many people get into credit card debt because they just simply spend more than their income allows, and if this habit continues for too long, then the consolidation will hardly benefit them at all as they will simply be increasing their credit card balances again thus starting the whole process over again. Collateralizing loans allows for a much lower interest rate than if done without it, and by collateralizing, the asset owner agrees to allow the forced sale (which is called foreclosure) of the asset in order to pay back the original loan. The risk to the lender is therefore greatly reduced and so the interest rate offered by the lender is therefore much lower. Therefore, with the right guidance and assistance, debt consolidation will work and should prove great benefit to you in helping you become debt free once again.


How can debt consolidation benefit me?

Debt consolidation can be very beneficial if done right, here are the main key points as to why you may want to consider debt consolidation:

1. Becoming debt free is much quicker

If successful through to the end, then a good debt consolidation program could possible make you debt free within just a few short years (and will also save some money for you along the way!). It is no secret or surprise that a debt free life is a glorious dream for many people who are in debt, and such a consolidation program should easily enable this dream to come true for you and allow you to live a much happier and more financially secure life thereafter.

2. No more payment collection calls

This is a simple one but one that can also make your life a lot happier and worry free, as placing your debt management under a consolidation program, you can stop all the collection calls too which are often quite harassing and a cause of worry for many people.

3. Multiple payments become one simple monthly payment

This works well because each credit card and loan have completely different monthly dates when the loan payment is due, so using debt consolidation you can combine these multiple monthly payment into one simple easy payment giving you much less worry and hassle and also more control over the situation. Then, once the debt is consolidated, you only need to remember the one payment due date as it is only one payment. The advantage and benefit here is that debt consolidation will make your life much easier in terms of managing your debts and will also help ensure you don't have any late payments and helps to prevent any late payment charges.

4. Reduced interest rate

Good negotiation with your creditors on your behalf by a professional should get you a much lower interest rate. Then, with the new lower interest rate, your monthly payments should also be a lot less than what they used to be before the consolidation took place.

5. Give you a better credit rating

Everyone knows that if you are making late payments then your credit rating starts looking worse and worse and your credit score will therefore go down as a result of this. What debt consolidation will do for you, is allow your accounts to begin to pay themselves off, and as a result, you will start to build good credit and will therefore see your credit rating begin to rise again.

Stephen James has great experience in advising and assisting people on how to live a debt free future with debt consolidation and has a great website dedicated to the subject: free debt consolidation [http://free-debt-consolidation-advice.blogspot.com].

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