It wasn't all that long ago that
American's faced great financial crisis. As a nation, we struggle
with debt, and it keeps us from achieving a better life. Debt
Education is here to help you change all that ... just ask!
REAL PEOPLE ... CARING ABOUT REAL
ISSUES
Debt Consolidation Loan
Until recently, a debt consolidation loan was the only way to
handle your debt in a monthly payment. You apply to a bank or
credit union for a debt consolidation loan to pay off your creditors
and your debts are rolled into one monthly payment. You pay the
bank loan back, and for many people, the single monthly payment
is easier for them to manage.
Depending on your income
and debt ratio, you may be apply to a financial institution
for a debt consolidation loan. This debt management loan could
be either secured (backed
up by collateral) or unsecured. Talk with a loan officer or a
financial planner about your options. You can also talk to other
financial institutions to find if they offer a better deal before
signing on the dotted line.
When considering a debt consoludation loan, keep in mind that
it is very common for consumers to continue to use their credit
cards after they have consolidated their old debt. This results
in increasing their total debt load and severely limiting their
ability to repay all outstanding debts. Statistics show that most
people who use consolidation loans to resolve their debt issues
will find themselves right back in the same deep debt rut within
two years. If you choose this option for managing you debt, you
must back it up with practical budgeting and expenditures.
There is a very real down side to considations loans
that most people don't take into consideration. A consolidation
loan will mix your secured debt (debt which is secured by assets)
with your unsecured debt (debt which is not tied to any assets).
Since statistics show that debt consolidation as a financial solution
is so prone to failure, you need to understand that you are really
taking a big risk on yourself. You are agreeing to take debt that
can't be tied to your assets (unsecured) and make it all secured
debt. And then, if you default on any of it, you will loose the
asset(s) and possibly face bankruptcy.
Most financial planners are not going to recommend consolidation
loans to you if you've shown a financial spending pattern that
indicates you probably won't be able to get yourself out of debt.
Most bank lenders are going to be more than delighted to take
your application for a consolidation loan and won't address the
pitfalls. Buyer beware!
What if you really wanted to get a debt consolidation
loan, but were denied? You still have a few debt options.
Dealing with debt will come down to your ability to pay and get
mind-set that you are going to be creating a budget, and you're
only chance out of debt is to stick to it religiously.
You need to speak with a financial advisor (not paid by the banks)
or credit counselor (paid by the banks) who will give you ideas
for working with your budget to payoff your debts. You can ask
whether Debt Management Plan
could work for you.
There's a lot of information to read through on the Debt Education
website, but we feel this is extremely important material. We
strongly recommend that you bookmark
this page right now. This will allow you to read
at your leisure, and should you need to attend to other matters,
easily return back here at your convenience.
The Debt Education website was built for you. Please explore
our website. You'll find resources and information on virtually
every aspect of financial planning and money management. These
debt delp resources are designed to help you get out of debt
and stay out of debt. You can achieve financial independence.
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Debt Education PO Box 5156, Santa Cruz, CA 95063
