Are you having those overwhelming feelings of being buried under a mountain of debt? Sometimes life just comes at you like a fast moving locomotive that you just can not seem to step away from the runaway train wreck that your finances have evolved into.

You find yourself with an ungodly monthly cash outflow due to excessive credit card use or a number of unplanned charges that got out of hand.

Regardless of the reason, you have acquired some unmanageable debt and need a remedy. A debt consolidation loan could be just the ticket to a stress free life. You could possibly reduce your monthly payment, your interest rate and your debt ratio in one fell swoop by amalgamating all your debts into a single loan, a single lower payment and eliminate the dozen or so headaches of your present situation.

Sometimes by stretching out the payments over longer periods or using collateral to secure a loan one might possibly reduce their interest rate and, bottom line, lower the overall monthly payment.

The first step would be to compare the loan plans and debt options of several reputable online lenders and decide which plan fits your need best. Then simply fill out the simple application and wait for an answer. Be certain you are dealing with a proven lender of choice by checking with better business bureau or some other like entity.

Always be careful of any personal data falling into the wrong hands. Do your homework and apply due diligence before committing to a contract. Another prudent and very important bit of information that could help you reduce the burdens is to pay close attention to your credit score or credit rating as monitored by the credit reporting agencies.

The higher your score the better your chances of lowering your interest rates and getting favorable treatment from lenders who will label you a higher or lower credit risk based on this score. That would be a future topic of discussion as it would be too lengthy to include here. In summary a well tailored debt consolidation loan plan could help you change your financial future.

A debt consolidation loan can provide to an already over taxed and stressed out student with a burdensome plethora of credit card debt and student loan obligations, an uplifting panacea of stress relief. The following information can provide you with some insight into the world of this useful debt relief tool called a consolidation loan.

Due to the nature of things in our culture, such as fashion statements, the latest technology gadget, sporty wheels, or just the rising cost of books, a new college student may be prone to getting deep into a debt quagmire. When this does occur, unmanageable debt load is not a pretty picture at all and can ultimately lead an unsuspecting student down the lonely path of bankruptcy.

A future drop out candidate is born and the road back to normalcy is long and hard. This detour in your life is one you need to avoid at all cost.

A debt consolidation loan just might be right for you. Keeping up with the workload is difficult enough without the added stress of meeting a monthly payment, or worse, having to worry because you are unable to meet the obligations of your contracts. A debt consolidation loan could help you lower your monthly outflow by reducing the interest rate or stretching out the payments over a longer period.

The ultimate goal here is to reduce the overall stress to the student and provide a more conducive environment for concentrating on the more important aspects of college life, namely learning. This doesn’t mean you can continue to spend like a drunken sailor. A major attitude change should take place and a commitment to fiscal responsibility must be included in your plan to get out of debt.

If your not serious about making some major cutbacks in spending and curtail the lavish life style, a debt consolidation loan will only prolong the inevitable and not end the cycle of borrow and spend economics. All in all in the end if you decide to consolidate your debts be sure to shop around for the best rates and loan circumstances available and with a reputable well known lender so you are protected from the unscrupulous lenders?

Taking control of your current debt problems can be an overwhelming task. If the choice is to consolidating debt it comes down a couple of options.

Debt Consolidation Loans – If you have assets like a home and can qualify for a lower mortgage rate you can borrow against the equity and structure a loan to get the cash and consolidate the multiple debts. This is often done with owners of multiple credit cards and open balances on consumer purchases where they consolidate the debt by paying off all the current balances then only have one payment each month for the loan.

Hired Debt Consolidation or Consumer Credit Counseling Services – These services can help you get a handle on your financial issues and be your representative to the companies, which you owe money.

The total amount you owe and current financial situation play a part in which option will best fit your needs.Here’s a Quick run down of the pros and cons of each option

Consolidating Debt through Borrowing

Pros

* If you quality for a loan you can quickly eliminate the payments of debt on multiple accounts
* This eliminates any debt collection steps or actions in place
* Reducing the open accounts with a balance can improve your credit rating
* Paying off the debts should not impact your credit rating in a negative way

Cons

* Must qualify for a loan or mortgage refinance
* Your assets like a home are put at greater risk for future loss if payments are not made
* The debt is only restructured not eliminated
* Open zero balance accounts make it easier to fall right back into deeper debt
* You may think your financial house is in order providing a false sense of security

Consolidating Debt through Hired Consumer Credit Counseling Services

Pros

* You should immediately see a reduction of debt collection calls and notices drop
* The current monthly payments on accounts should decrease
* Interest rates and extra fees should stop or be eliminated
* You should slowly learn better money management skills

Cons

* While you work with a Credit Counseling service you will not be able to use credit
* Counseling services only work with unsecured debt and not all unsecured debt will qualify
* Clients must qualify and meet minimums of unsecured debt
* Credit rating may suffer of be impacted negatively

The Best Consolidation Solution For You

Everyone has a money problem – too much or not enough. Each and every person’s financial circumstances are different. The choice you make must be based upon your own personal financial situation, money habits and perspective, lifestyle and belief system. In the end it is not what we believe or think but what is best for you to manage your finances, buying and debt to live a better life.

Debt consolidation loans gives consumers or companies in the US and Canada – those with poor credit or bad credit – the opportunity to refinance or borrow money in an effort to restructure their debt. These consolidation loans come with many options – secured and unsecured (no collateral) with the goal of paying off smaller debts and consolidating them into one monthly payment.

For consumers to qualifying depends on a variety of finance options for example refinancing your current mortgage taking out a second mortgage – equity loans and personal loans.

Consolidation Loans for Debt Involve Caution!

Qualifying for a consumer debt loan is much like any other loan. First there is the loan application the pre-approval then the loan approval and funding the loan. The caution comes down to you as the borrower and your financial future depends on the next actions you take.

In order to get ahead of the debt spiral you must use the money wisely. Consolidate the debts you borrowed the funds for and not incur any additional debt – one reason for balance transfer credit cards. Then work as hard as possible to pay off the loan as fast as possible. Basically a buying/lifestyle change.

Without the change in spending habits you will find yourself quickly back in the same stressful debt circumstances with a greater debt load and closer to a date with bankruptcy.

Before traveling down the debt consolidation path of a loan begin to find out where your money is going. Then begin to develop a budget. A budget is not restrictive; it’s you telling your money where it’s going to go before you get the money. Instead of money running your life.

Begin to track your spending on a daily basis. Every penny you spend write it down and make at note what it was for. You may soon find your fortune is being spent buying fast food!

Once you know where your money is being spent you can begin to look at budgeting your money and creating a plan for paying debt down. You’ll be better prepared to know exactly what you can afford when you begin to look at loans – interest rates and payment options.

Financial companies are in the business of loaning consumers money it’s a business. They are more than happy to let you apply for a loan with no obligation to sign on the dotted line. This gives you a great opportunity to shop for the best loan rates -payment options and loan terms to fit your needs.

Secured or Unsecured Debt Consolidation Loans – The Differences

While doing research on loans you’ll come across two types of loans – secured and unsecured. The difference is simple. A secured loan usually involves putting up some type of collateral – a home or second home or real estate. Something that holds some value.

The Advantages of a Secured Loan:

• The rates on a secured loan is lower
• Gives the opportunity to borrow more money
• Payments are usually lower (because of the lower interest rate)

The Disadvantages:

• Payments can be stretched out
• Possible risk of losing the item put up as collateral if you default on the loan

Unsecured consolidation loans do not use collateral to “guarantee” the loan.

The Advantages of Unsecured Loans:

• Your assets are not at risk
• Payment terms are usually shorter

The Disadvantages:

• Monthly payments are higher
• Interest rates are higher

No matter where you stand in the world of debt and loans there is a consumer debt consolidation package which will meet your needs even if your credit is less than perfect.

Before making any financial decisions you must know where you are financially. Know what you owe and how much you can pay. Always seek good counsel before making any financial decisions.

Many Credit Counseling Services offer consumers debt counseling, debt consolidation and budget counseling to help consumers come to face to face with their finances. These services can be found in the local neighborhoods, via phone, and online for what may appear as a nominal fee.

With so many credit services and agencies offering services comparing each one side by side is impossible. However, as an overview most provide these basic services.

This industry has forged alliances with many of the major creditors. This works for the creditors to be paid back and the counseling services to provide a needed service to debt ridden consumers.

The fact is… even with their connections you as a consumer can do it all yourself.

You can contact creditors to:

• Stop late payment fees
• Reduce monthly payments
• Reduce and/or eliminate interest
• Negotiate a new debt repayment plan

The one element a credit counseling agency usually brings to the financial puzzle is organization. Most consumers find themselves in a financial mess from a lack of organization both in paperwork and handling of money. Learning to live with a spending plan is crucial to discovering how to master your money.

Going the Counseling Route!

If you decide to not go it alone in dealing with debt and go with a credit counseling agency know your credit score will probably take a hit.

Look for a company that is:

• Non-Profit
• Charges the lowest fees
• Makes contact convenient via phone, face to face or online
• Adheres to AICCCA standards

If your get serious on handling your finances you can do it all yourself… I learned it all the hard way and did it myself.

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When you think about the fact that more and more people are getting into more and more debt all over the world, you can see why this is a problem that you need to be concerned about. Not only in the United States, household debt has topped the 2 trillion dollar mark, and this is actually without mortgage debt at all.

Whether you are in a situation where you need to worry about debt right away, or you are afraid you might be, you’ll find that debt consolidation is something that you are considering, but before you go ahead, you need to keep a few things in mind.

What Should Happen?

In a perfect world, debt consolidation means that all of your debt is moved to a single source, whether it is a credit card payment, a car payment a loan or a mortgage. You’ll find there are a number of different places to get this done, whether at your bank or online and you’ll find that the results promised, which include a lower interest payment, a lower monthly debt and overall, more money left over at the end of the month, is quite attractive.

This essentially allows you to save more money and to make your debts a great deal less urgent than they might have been initially.

What Really Happens?

In many cases, debt consolidation happens because people are not managing their money correctly and is considered a last case resort. Many people who consolidate their debts find that the initial freedom allows them to be even more careless and this can lead to a spending disaster. In these cases, getting a debt consolidated just leads to being even more deeply in debt.

For many people, the zero balances on their credit card are just too tempting and they might find that their credit has even been increased to a point where they will be even more tempted. For someone whose debt might have been caused by careless spending in the first space, this can lead to a situation that is even more difficult.

What Needs to Change?

When dealing with debt consolidation, you’ll find that you need to not only chance your finances, but also your spending habits. Make sure that if you have to consolidate your debts that you will do it in such a way as to put yourself ahead, and make sure that you will have the will power that is necessary to break any bad habits that you have picked up

Many people start this process by getting rid of their credit cards, and by putting a moratorium up on your loans. This can make sure that you don’t get more loans that will be burden on you and take a serious look at your finances. Make sure that you understand how you racked up the debt in the first place and make sure that you know how to stop before you go ahead and consolidate!

Conclusion

Remember that to make sure that debt consolidation works for you that you will need to change you spending habits which will improve your credit score. Over time, your debt should go down, not up, and you’ll find that reminding yourself of this can stave off further disaster.

Ideally, your debts should not eat up more than about 36% of your income. This is recommended, possibly even required if you want to consolidate your debt, so make sure that you plant this out an stick without it. With this ratio, you’ll find that you don’t need to to live paycheck to paycheck .

Remember that debt consolidation is not a magical solution that will get rid of your debt; it is a tool that will help you get debt under control!

Credit cards that allow consumers to transfer the open balances on their other cards are heavy marketed products in the financial world. Before you apply for a card and transfer balances from one card to another make sure you understand what is involved and what you are paying for in fees.

If you do not pay attention and understand the cost associated with balance transfers in the end the “saving” could be a costly move. Answer these questions before applying for your card.

Introductory Interest Rate – Is there one and if so what is the interest rate?

Many cards you receive in the mail may offer a zero or low introductory rate on all balance transfers. This low APR rates can eliminate or greatly reduce the finance charges on the open balance each month. With a finance charge waived for a period of time it can make paying off the card balance much easier.

How longer will the Introductory Period last?

Most of the time these introductory periods and the low rates last for six months to one year. Some run for up to 15 months. The longer the intro period the better chance you have of paying off the balance before being hammered with a full finance charge.

What will the new APR be after the introductory period expires?

Go for the lowest APR possible. Knowing in the back of your mind the APR will increase after some many months can be a big motivation for paying off the balance ASAP. Balance transfer APR is usually different than the APR on purchases. Keep and eye on any purchases.

Does APR apply only to transferred balances only or are purchases at the same APR?

To attain more customers many credit card companies separate have different interest rates for different transaction types. For example, balance transfers carry a different rate from a purchased item on the card. Cash advances in urn have another APR. Read the fine print! You need to understand the interest rate for each type of transaction the card is used for.

Do You Meet the Qualifications for the Introductory Rate?

Never assume that the offer you receive immediately qualifies you for a zero percent interest rate. The final rate depends how the company views your credit history. The final rate could be much different than the advertised rate if your credit is not is the best shape.

What are the Fees Associated with Balance Transfers

The fine print will let you know if there are any fees associated when transferring the balances. The low rate could be “recovered” with additional fees. These fees could be a flat fee to transfer the balances or the fee could be based on a percentage of the amount transferred. There could be no fee on the initial transfer but fees for transfers that occur later on.

What is the default or standard rate and when does it come into effect?

The default interest rate is the highest rate the credit card company will charge for usually penalties. This includes late payments and over-limit charges. No these rates before you make your application.

Balance transfer cards can be a great way for consumers to reduce their credit card balances. Imagine only having to make one payment each month at a low interest rate. It sure makes paying off the pleasures in life easier.

Successes with most things in life come down to planning and mindset. Debt elimination and debt consolidation also require planning, action and a mindset. But elimination of debt is far different than consolidating debt.

Let me say from the start my ultimate goal is debt elimination. What exactly do I mean by debt elimination? My goal and mindset is to NOT use or have any need to use debt in my life. To be financially free to spend what I want as I want without going into debt.

Yes this includes the house, cars and big screen TV. For some this may sound like a dream – for others a reality or goal – for me it is a focused mindset.

The term debt consolidation and elimination are often lumped together. People I speak with usually mention them in the same sentence as the same thing – yet they are NOT – at least in my way of thinking.

As I said to reach my goal some planning needed to happen, without it – it was just an idea.

When starting down my path to debt elimination it started with debt consolidation. The consolidation plan may not be in the same traditional method of a consolidation loan but I did explore it and you should too. Look at all your options before taking any steps. However, my method for me was still consolidation.

Here’s the method that worked for my situation with the ultimate goal of debt elimination and not only consolidation.

Think of money and the expenses in your life as piles on laundry. For the guys they may have more trouble with this!

The laundry needs to be sorted before washing.

• Whites
• Light Colors
• Dark Loads
• Specialty – bedding etc.

First the items to be washed are put into one place the laundry basket – like all the bills come into one place. Then the clothes are sorted into piles depending on the criteria as mentioned above. First it was the regular monthly bills or necessities:

• Mortgage or rent
• Utilities
• Insurance
• Food
• etc.

Next we organized all the bills, which may be monthly but could have some items that may not be necessities. Here is where my debt consolidation process started. First, I took all the unnecessary bills or bills that could contain extra charges where I had some control like unpaid credit card balances, payments on other consumer purchases – cable, direct TV, cell phone extras, etc.

The next step was to review each of the bills already consolidated into piles and give them a hard look. Identify any potential extras and eliminate those extras not needed or used. For my family it involved consolidating our cell phones into a family plan making sure we reviewed the needed minutes and changed our plan to one with enough minutes to meet our needs. The charges on minutes when you go over can be very expensive. Any extra features were also eliminated or reduced.

This one small change dropped our monthly cell bill almost $80 per month – from about $230 to about $150. With kids in college they use their cell phone instead of getting a line in their apartment. We consolidated the phones and eliminated extras.

We followed this exercise with all of our bills. It’s surprising how many little extra charges you find on the monthly bills.

Once all the bills were reviewed and cleaned up we felt it was time to attack our next consolidation elimination step. This step involved taking one pile of bills and ranking them based on what which bill we wanted to paid off first and eliminate the debt.

For us it involved reviewing the four credit cards we used and consolidating the credit cards balances into two cards. One credit card for business the and one credit card for personal the – notice both cards provide rewards or points.

When we consolidated the debts we lowered the monthly interest rate on the cards and plan our purchases to not make stupid buys. When we do use our credit cards we get at least some bonus points for later use.

For my business which is online I do have some monthly charges for services. Each of those services was evaluated consolidated if possible and/or eliminated.

This process helped us identify wasted money. This is not about living so tight we do not spend money it is about taking control of our money and using your money wisely. Why not spend it on the family instead of giving it to a company for a service I’m not getting the full benefit of?

Next the focus after consolidating was to eliminate. The “new found” money we saved from other bills we applied to the unpaid balance on one of the credit cards. We put all of our focus on one credit card to eliminate that debt. I can happily report that one card is paid off. It started first with consolidation and end with debt elimination.

That extra money paid on that credit card was then all focused on the other card and we are well on the way of eliminating the debt on that card. By the way that card was from stupid business purchases – but no more.

After that card is paid off all we have left is a car loan to pay off and we are then debt free – the house is paid off. Time to do some serious wealth building!

So you see debt consolidation is a part of a debt elimination plan. You have to find the approach that works for you. For some they go the way of a consolidation loan, others combine debt from multiple credit cards onto one card and others attack one debt at a time.

No matter how approach your debt issues it requires a plan, focus and action. Simply consolidating your bills into one payment does not fix the core problem of unwise or unplanned spending. For us it involved a lifestyle spending change, the result has been a better life with less stress. Now that’s home improvement!

Consumers across the US, Canada and in Europe continue on their pace to rack up debt on their credit cards. The result of this uncontrolled spending keeps pushing consumers further fall behind on making the monthly payments creating an all-time high in credit card debt. 

The mortgage lending pop and building slow down, coupled with eroding household budgets and out of control spending habits telegraphs a clear sign of trouble ahead IF consumers do not stop and take action on their money habits.

Some consumer like to hide behind the “latest news” pointing the finger at interest rates and slow mortgages as the problem behind their increase credit card debt. The truth comes from bad buying habits learned over years, they pay little attention to what they can really afford.

How Bad Is The Paying Credit Card Problem?

The AP (Associated Press) recently analyzed data pulled together from 17 of the largest issuers or credit cards. The analysis show how behind payments and defaults are across the US.

Total up all the credit card accounts that are a minimum of 30 days late and you’ll be starring at over $17 billion dollars and that was in October of 2007. The number shows a 25% increase in late accounts over 2006.  

The rise of accounts that are 90 days behind also grow sharply by 50% or more when compared to the previous year. Defaults has grow also by 18% over 2006. Defaulting is when the credit card company basically gives up on ever seeing their money.

The money professionals fully expect the numbers of those “late to pay consumers” and defaults to grow after the dust has settled from this years’ holiday shopping spree often “financed” with credit card buys.

When money gets tight lenders are less willing to extend credit with home equity loans or take on a debt consolidation loan when a potential loan walks in the door and finds itself stamped with a consumers poor credit history. This is usually a good sign of their spending habits!

The New Year is usually the time people make promises to themselves, but anytime is a good time for families, couples and individuals to take a serious hard, detailed look at the status of their debt.

Here’s a few ways to Begin Attacking Credit Card Debt:

• Start looking for ways to reduce the number of credit cards
• Take steps to consolidate credit card balances
• Reduce the use of credit cards
• Make payments on  time
• Plan your purchases
• Use a budget

The consumers in the US are sending a clear message in my opinion – rocky times lie ahead! Mortgage rates and the housing slow down does play a part in a healthy economy, but so does the consumers use of managing their own debt – and that includes credit cards.

Start today taking control of your finances! It’s Never Too Late!

This morning I saw the headline – "Debt Consoildation – Save Money Every Month."  In the article they made this statement "By consolidating their debts, some people are also able to save money."  Now that statement is a much truer statement. SOME PEOPLE can save money.

This "saving money" phrase is a topic I often debate with those facing financial problems.

When someone "saves money" I interpret the phrase to mean they have taken the money and put it away in a savings account or invested the difference.

For example, let’s assume all your consumer debt totals $1900 per month. Through a debt consolidation loan all the bills are consolidated into a lower payment with a lower overall interest rate to $1300 per month. This would reduce your  monthly money outflow by $600.

However, if the $600 does not go into savings, investing or paying down the consolidation loan and is only spent – No Money is Saved!

You must focus on debt reduction and not consolidating debt to lower the payment.

The save holds true for items on sale. If you plan on something costing $40 and you can purchase it for $32 the $8 "saving" needs to be saved. This again is where budgets play a major part in everyday money management.