www.unitedfinancialrelief.com
If you?re looking to get out of debt, who would want a credit card debt consolidation loan? Take every creditor that you owe, roll it all into one loan, get a lower monthly payment with one lender, lower the interest rate, and pay it off over a reasonable amount of time. Why wouldn?t a lending institution want a piece of that? Let?s answer that with a real world event.
The HELOC Monster
The housing market peaked in early 2006. Prices were up, the economy looked good, Americans were buying, and homeowners saw their equity go through the roof. Then, in late 2006 through 2007, the market started a moderate and steady decline. People started to feel the pressure of their loose spending as their credit card interest rates increased, and monthly payments became harder to manage. Banks encouraged homeowners to get a credit card debt consolidation loan using the equity in their homes.? They thought, like most of us think; one payment, lower interest, reasonable term, AND it?s turning unsecured debt into secured debt by tying it to their house. What a low risk investment, right? Who would default on their home equity loan (HELOC) and risk losing their house? Banks started approving these HELOC?s left and right, even to the point that sub-prime borrowers were being approved.? As long as you had equity in your home, it?s almost as if the banks forgot how to say ?no?.
That should?ve worked, right? Well it didn?t. So, what happened? Aside from the mortgage market crashing and America going through it?s worst economic depression in over 80 years, it didn?t fix the real problem. People didn?t get out of debt, they just shifted it from one hand to the other. What?s worse, is that the hand they shifted it to was the hand that put a roof over their head.
People continued to have financial problems (remember they didn?t resolve the problem to begin with, they just shifted it), and they used their credit cards again. Wait!! What!? That?s right, when they used the HELOC to pay their credit cards, they freed up the balances on those credit cards. What do you think happened next? They racked up their credit card balances again. Now, they have a credit card consolidation loan they can?t afford, credit card debt they can no longer keep up with and no more credit limit to help delay the inevitable. Thousands of Americans ended up losing their homes, destroying their credit and ruining themselves financially.
Banks are a lot more cautious about lending money these days. It?s nearly impossible to get a personal loan if you have a lot of credit card debt. Even if you have equity in your house and a great credit score, it may not be enough if you carry large credit card debt balances. Why? It gives the appearance you are unable to pay down and get out of debt. You look like a financial liability. Why would one bank want to take on the risk of money spent with several creditors.
What?s the answer?
It?s important that you address the problem, and that?s the credit card debt. There are 3 options that are designed to resolve your credit card debt problem head on:
Consumer Credit Counseling (CCCS)
These programs work in conjunction with creditors to try and create a repayment schedule that is affordable for the consumer. You might see a moderate reduction in your monthly payment and reduced interest rate. This makes it easier to pay down the debt over 5 to 6 years. Typically, these programs work best for people with less than $10,000 of credit card debt.
Bankruptcy
When there are no other alternatives, consumers often decide to file bankruptcy. Most consumers try to file Chapter 7 bankruptcy, which, if they qualify, may eliminate many of their debts entirely. Under Chapter 13 bankruptcy, however, a judge determines the percentage of the debt that must be paid to the creditor over a set period of time.
Debt Settlement
This is one of your best options. It can significantly reduce your debt, give you one low monthly program payment, and resolve your debt in as little as 24 to 48 months. The program provides immediate cash relief, but most importantly, it offers a smart alternative to paying on your credit cards for the next 10 to 20 years or more, saving you thousands and even tens of thousands of dollars over the life of the cards.
If you are struggling to get out of debt, talk to someone who can help you understand your options and choose a solution that is in line with your financial goals and current budget. Contact United Financial Relief by calling 1-888-534-5010 or visit?www.unitedfinancialrelief.com.
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This is a very informative blog. Credit card debt has increased from the past few years at an increasing rate. When you are not able to repay the unpaid bills and are short of cash, then you may go for credit card debt consolidation loan. You can use this loan to consolidate multiple credit card bills into a low single monthly payment. You can get this loan from a bank or financial institution. Credit card consolidation loan helps you to repay your all outstanding debts at once. Always try to save money. Make expenses only when it require. Always try to pay your bills on time. Reduce your debt-to-income ratio. Don't open new credit accounts just because you need to shop more. Live within a budget and try to avoid incurring new debts.
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