What are the advantages and disadvantages of debt consolidation?
Written by on April 2nd, 2009
I have two credit cards that I have used over 5 years ago and never paid back. The total of the two cards FIVE YEARS AGO was $1000. Of course, by now, it should be close to $3000 because of all the interests.
What does debt consolidation do? More importantly, can it REALLY remove or reduce the interest that built up over the last 5 years?
When doing a search for debt consolidation services, I get THOUSANDS of results. Which debt consolidation services are better?
Detailed answers would be appreciated.
Update: Am I correct to assume that if I leave the debt as it is, I can have it completely wiped off my credit card two years from now as if it never happened?
By: jimmyaven
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Tags: Credit Card, Credit Cards, Debt Consolidation Services
April 4th, 2009 at 4:11 pm
Hallo, Koevoet:
Eerst, beantwoordde ik reeds een verwante vraag, zo I' ve kopi
April 4th, 2009 at 7:29 pm
Debt consolidation is taking all your debt and consolidating them into one, supposingly smaller debt, thus reducing the amout of over all interest you are paying on several debts.
Debt consolidation companies are companies that act on your behalf talk to the companies you are in debt with, perhaps negotiate the debt down if you have not paid on it in awhile and perhaps it has gone to collections. Some or most of these companies are non-profit companies, however there is a charge of a percentage of what they save for you that is normally leveled against you.
You can do the same thing yourself by finding a company that will give you a loan to pay off all your credit card debt and other debt that you might have into one single debt, thus reducing your debts to a single debt with a lower monthly payment, and in most cases lower interest rate, but the interest rate will depend on your credit scores off your credit report. You don’t have to have the top scores to accomplish this. Lower scores simply mean that your interest on your debt consolidation loan would be a little higher, though probably less than what you would be paying for all your credit cards and on the debt combined.
From what I gather you have two credit cards that you are behind in payment since you indicated you have 2 cards over a 5 year period that you have yet to pay back what you have used on them.
They have probably been sold to another company by now. this is called a charge off by the company that originally had your credit card debt. You, in some cases, can call those companies that have purchased your unpaid debt, make a bargin to pay them in one lump sum, say you are able to pay them 1/3 of what you owe. In this instant you stated that the debt was at one time $1000. If it was sold for that amount you might be able to pay if off completley for around $350.00, just make sure that if you do you ensure that the company send a piece of paper to the credit bureaus that the debt is “PAID” simply “PAID” this will cause your credit score to go up a little better than “PAID CHARGE OFF” which they will place on your credit report if you don’t ask them to place “PAID” on your credit report.
I hope this has helped you in some way.
April 7th, 2009 at 7:21 pm
Zijnd in Australië, I can' t- commentaar op welke faciliteiten beschikbaar zijn. Ga naar een bank, of andere financiële instelling en vraag hen wat zij aanbieden.
Eerst, en het belangrijkst, VERNIETIG AL uw creditcards. Geen gebruik dat schuld consolideert als u het enkel als verontschuldiging gebruikt in meer schuld te krijgen.
Ten tweede, verricht betalingen die over het zelfde zijn als u op het ogenblik op het totaal van al uw betalingen maakt. d.w.z. als u 3 betalingen van $75.00 hebt, schik uw nieuwe lening zodat uw nieuwe maandelijkse betaling ongeveer $200.00 is.
Nu, om uw vraag te beantwoorden. De consolidatie van de schuld brengt één lening ertoe om al uw andere leningen te betalen. Dit betekent dat u slechts één betaling per maand om hebt te betalen en dat de betaling een vastgesteld bedrag is. Afhankelijk van de termijnen van de lening kan de betaling of de lengte van de lening variëren als de rentevoeten uitgaan of verslaan.
Met schuldconsolidatie, u arange een persoonlijke lening die kan worden beveiligd of onbeveiligd aan een rentevoet die veel lager is toen uw creditcards en vaak met verminderde prijzen. Hier, kunt u 15% tot 20% rente op uw CC maar slechts 7% tot 10% op een persoonlijke lening betalen. Een besparing van tussen 5% en 13% op $3000.00 zal zo weinig zoals $150.00 aan zo veel zoals $390.00 in het eerste jaar zijn.
Het ding is dat u slechts één te betalen schuld hebt, en het vernietigen van uw creditcards houdt ffurther schuld tegen.
Ja, zou het moeten helpen de rente verminderen u op uw schuld betaalt. De enige manier u kunt elimineren het is het te betalen.
Er is wat grote raad in de bijbel aan iedereen, niet alleen Christenen. Het komt uit het 13:8 van ROM en zegt " Ben geen mens om het even welk ding, maar elkaar aan liefde… " verschuldigd;
Ik heb schuld, maar ik leid aan de plaats waar ik met deze Goddelijke raad volgzaam kan zijn.