Debt Consolidation Loans for a Fresh Start
With the blink of an eye, nearly anyone is susceptible to get behind on their monthly payments and obligations to lenders, which is when a fresh start loan can be of the maximum benefit for most borrowers. Perhaps you have experienced a recent illness, injury, or even death in the family and have gotten behind on your bills. No matter what reason you have for finding yourself in arrearage on your bills, a consolidation loan can allow you to pay off your existing creditors and avoid bankruptcy or even foreclosure.
Up to $50,000 Debt Consolidation Loans to Pay Off Your Debts
When a borrower gets behind on their loan payments, credit card payments, or other bills, what follows is never pretty. It seems that a constant and persistent stream of calls from creditors becomes very intrusive and can be very stressful. To make matters worse, interest charges continue to accumulate on the bills that you have due, or your accounts are subject to late payment penalties or other charges.
One of these loans will allow you to put all of these dreadful circumstances into the past by allowing you to combine all of the current payments and debts that you owe into a single loan that features one easy-to-handle monthly payment that is based on your ability to repay your creditors. Debt consolidation loans are usually written for $50,000 or less, but can be more depending on your particular needs and your financial situation at the time of the application for consolidation.
The process of receiving a debt consolidation loan is a streamlined and expedient one in most instances. Many borrowers are happy to find that within just a week or so, they have completed the loan application process and received funding to get a fresh start. The loan payment that you will be required to make will be less than the total of the combined payments you are making to many lenders right now, which allows you to keep more of the income that you bring home from your job to take care of the many expenses of life (without running up more credit card or loan debt).
Choosing a Debt Consolidation Loan
Debt consolidation loans can be secured or unsecured, and the type that you take can have a big impact on the amount of interest that you will be charged for the life of your loan. The secured debt consolidation loan (collateral required) is the cheaper of the two types of loans for borrowers with all types of credit. The unsecured debt consolidation loan (no collateral is required) is more expensive in terms of interest.
The secured debt consolidation loan is usually the best choice for homeowners who want to save money on interest charges. The unsecured debt consolidation loan is the ideal loan instrument for those borrowers who do not wish to risk their assets to secure funding for the loan, or for those who do not own their own home or other asset of value.
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Categories: Credit Debt Articles Tags: consolidation, Getting, loan, Poor Credit Loans
How to Out of Debt
Once you’ve got your cash flow under control by spending a lot less on housing, then you can begin hammering away at getting out of debt. Downsizing means downsizing everything. You’re ultimate goal is to live on 50% of your take home income. If you do that, you can retire at 100% of your lifestyle and never have to take a pay cut to yourself – until you die. That means you shouldn’t spend more than 25% of your income on your house, and it also means (this is going to hurt) you should never ever finance a car.
Financing a car is dumb. Financing anything that has no way of holding its value and returns you no cash flow is financial suicide. You can consider financing a truck for your business, if the truck itself makes you a thousand dollars a month or something, but individuals should never finance a vehicle. You would be better off renting one for long trips (which is actually a good idea – let someone else pay the insurance and wear and tear). No, you need to buy your vehicles with cash, and that means paying off your current car loans, and then continuing to make car payments, but make them to yourself. In just a few years, you’ll have enough money to buy a car with cash, and keep all your cash flow in your own pocket, instead of some dude driving a ferrari who sold you a yugo.
next, never buy new cars. You can get a car that is basically new and actually profit a bit from someone else’s impulsiveness. The last car we bought my mom was paid for with cash. It was a 2005 SUV with 7,500 miles on it. It had all the trimmings. The exact same model on the dealer lot was close to $40,000.000. Because it was “used” and just out of new model year status, AND we were paying cash, we got it for right at $22,000 dollars. That’s right, almost half price. We kept $18,000.00 of our own money for the same vehicle, and that;s not all. If you financed the forty grand, you would also be giving up an extra eight thousand five hundred dollars in interest. Meaning we spent $27,000.00 less than the average sucker who financed the same car new off the lot. And all we gave up was 7,500 miles on the odometer.
Doing things like that: keeping $27,000.00 you might have spent on a car over four years, keeping $48,000.00 you might have spent on a house over four years, saving a couple of hundred dollars a month on the smaller house in lower electric and heating costs can add up to some really big numbers pretty fast. In our scenario, the person bringing home $4,000.00 a month who uses these principles can end up completely debt free and have a whopping $250,000.00 in the bank at the end of ten years!
Now, all of this means you’re going to have to make decisions about your money every single day for the next ten years. Do I spend it – or keep it? Do I get another year out of this car while I save for another one – or get silly and walk onto the dealer lot because they have balloons? Those may sound like tough decisions, but you’ll find out that keeping your money gets a little addictive after a while. You’ll find yourself thinking things like: if I get two more years out of this car and then buy a nice, cheap used one, I can take a vacation to Paris for two weeks!
Now, money is there to spend, because, of course, you can’t take it with you. You don’t have to leave a huge pile to the kids, they can make it on their own. So yes, you should own nice things and go nice places, but you have to do so in a way that doesn’t leave you bankrupt. And that’s how financial discipline works. If you make out a new budget right now that only spends 50% of your cash flow, you’ll be completely debt free and on easy street faster than you can imagine. Spend on decade getting your financial discipline down pat, and you’ll never have to worry about money ever again. That’s what your grandad meant by discipline – doing the right things over and over again until you are completely free.
Categories: Debt Consolidation Tags: Getting