Credit Card Debts

  Credit Card Debts  - Consolidate Credit Card Debt And Eliminate Debt With A Home Equity Loan  - Feb 25, 2007  

National surveys shows that in average American households carry a credit card balance of approximately $10,000. Many find that it hard to reduce their debts especially credit card debts due to it high financial charge, interest rolled from month to month because most of them just pay the minimum payment each month, causing their debt snowballing and at last they may trap into financial crisis.

While bankruptcy is a tempting option, it is important to explore other alternatives for eliminating debts. Debt settlement with a debt consolidation loan is a better option that bankruptcy. And if you own a home, you are at a much better position to get rid of your debt by consolidating your high interest credit card debt with a home equity loan.

Benefits of a Debt Consolidation Loan

Although a debt consolidation loan is not a magic way to eliminate your debts overnight, but it can help you to reduce your debt faster. As you know, credit card debts and other personal loans are high interest debts. In most cases, your minimum payment barely covers the interest incur by these high interest debts. Hence, you find it difficult to reduce these high interest debt's balance if your are paying just the minimum payment.

If you lump all your credit cards debts and other personal loans into a consolidation loan, you can take advantage of lower interest rates and lower monthly payments offered by a consolidation loan. This enables you to enjoy debt free with a few years.

Conslidate Debts With Home Equity Loan

There are various ways to obtain debt consolidation loan. You could apply for personal loan or any unsecured loan with reasonable and lower interest rate as compare to your current debt's interest rate and consolidate your debts into this loan. But, to obtain an unsecured loan, you need to have a good credit score else you loan application most probably will be rejected.

The best way to consolidate your credit card debts or any other high interest debts is using a home equity loan. Of cause, you need to own a home in order to apply for a home equity loan. Home equity is ideal for you to consolidate your credit card debts because the interest is much lower interest rate than credit card and other unsecured loan. And the best part is it normaly have different terms or repayment periods for you to choose from. The longer the repayment terms, the lower the monthly payment is. If your current financial is tight, you could choose the longer repayment term and pay more when you are at better financial situation.

With a home equity loan, your equity works as the collateral. If your home equity is $50,000, you could obtain a loan up to this amount. You could use this home equity loan to clear up all your credit card balances plus other loans; and you just need to focus on making a single monthly payment to your home equity loan.

Some Caution On Using Home Equity Loan To Consolidate Your Debts

Although consolidate all your credit card debts with a home equity loan is an ideal way to settle your high interest rate outstanding debt. You should use the fund wise, borrow just what need to clear your consolidated debts and avoid accumulating new debts while working on clearing your home equity loan. Failure to repay a home equity loan will result in losing your home.

In Summary

If you intend to pay off your debts, consolidating all your debts and pay them off with a home equity loan is a good option. There are tax advantages with a home equity loan and you could also take the advantages of lower interest rates and lower monthly payments offered by a home equity loan.

  Credit Card Debts  - When Do You Need To Rely On Online Debt Consolidation Companies?  - Feb 28, 2007  

With alluring schemes and easy to obtain credit cards, it has become very easy to fall into a debt trap. In such a situation, opt for online debt consolidation, if you want to survive. Not only credit cards, if ever expanding figures in your loan payments, mortgages, and unpaid bills have started haunting you severely, then club them all into single payable debts by consolidating all your debts in one.

Reasons To Consolidate Your Debts

To tide over your financial crisis, log on to an online debt consolidation company and restructure your debts. Stress on companies that declare to provide free debt consolidation help. These companies will either provide a tailor made loan to consolidate your debt as per their analysis of your debt status or may deal with your creditors. There are various reasons why you may consider consolidating your multiple debts.

If you have put yourself in the risk by accumulating large amounts of credit card debts, you have a good reason to opt for credit card debt consolidation. If you are bottle necked with your credit card debt, these debt management companies work out a relief program by negotiating with your creditors. Instead of addressing credit card debt traps by offering loans, they reconstruct your debts. These companies dedicate their staff to negotiate with the creditors, on your behalf, to get you debt relief by –

  • Alleviating monthly payments
  • Lessening interest rates or may be even removing interest rates by negotiating
  • Waiving off late fees and penalties
  • Re-aging your account by bringing it to current
  • By consolidating your debts with the assistance of any debt consolidation company, you can entitle yourself with a one fixed rate of interest. The companies offering loans and services for consolidation will not charge you interest higher than 8 to 18 percent.

    Programs for consolidation loans and credit card dues entail analysis of your income, monthly expenses and debt status. After analyzing of these factors of clients only, companies arrive at a suitable repayment plan to ensure you to achieve a debt free life sooner.

    A debt consolidation loan is designed to encourage people clearing all unpaid bills and debts. Advice and services offered by such companies enable the people to manage their finances better, reduce dependability on payday loans, and reduce habits of making late payments.

    Credit counselors also help you plan your financial goals and provide you strategies to achieve these goals within a stipulated time frame. Valuable tips on selection of loans, credit card usage, payment schedules, monthly budgets and handling monthly expenses help you keep a safe distance from further building up debts again.

    Online debt consolidation companies with an accreditation from Council on Accreditation of Services for Families and Children Inc, [COA] indicate high standard services.

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