A Debt consolidation loan is a loan used to repay several other loans or other debts. A Debt Consolidation Loan is a low cost loan secured on collateral in the form of any securable property, your home, your vehicle or any valuable asset. Debt consolidation loans consolidate all debts incurred through personal loans, credit cards, overdrafts, or any number of unpaid bills that have built up over time. These loans can give you a fresh start, allowing you to consolidate all of your loans into one – giving you one easy to manage payment, and in most cases, at a lower rate of interest. A debt consolidation loan can reduce both your interest costs and your monthly repayments, putting you back in control of your life.
Debt consolidation solutions are practical means for eliminating credit card and other high interest debts, and getting your financial health and future back on track. Being concerned about debt 24 x 7 is extremely stressful, both on you and your family. So take a few minutes right now and educate yourself about your options.
1. Go with a debt consolidation company that has a good reputation.
Don’t assume that every non-profit company is necessarily going to look out for your interests more than for a profit. Shopping around will give you the means to decide on the one that best suits your circumstances and your budget. Spend time researching different lenders and get quotes from a handful before deciding on one.
2. Do the math yourself.
Take the time to work through the expenses yourself and see how much you will be paying, how long it will take to pay off the loan, etc. Look for hidden costs, creditor charges, etc. Many lenders add payment protection insurance to their loans without the borrowers’ knowledge, which is often more expensive than those available elsewhere. People keen to consolidate their debts, take the first opportunity available, unaware of lower rates and other available options.
3. Is it cost effective in the long run?
Paying off an existing debt may incur charges for early settlement and there may also be a fee for arranging your consolidation loan. A debt consolidation loan should be cheaper than the individual loans and debts since that’s its purpose. Otherwise how is it different from any other secured loan? Also, by taking a new debt consolidation loan, you will be extending the period in which you are paying off debts – and that might mean a greater interest cost in the long run. So read the fine print on your credit agreement statement before signing it.
5. Interest rates:
Make sure you understand the difference between variable and fixed rate loans. If you sign up for a variable rate loan, you may get a lower rate initially, but within a few years it may go up. On the contrary, a fixed rate option does not fluctuate with any changes in rates. However, you do not gain when the interest drops either.
6. Debt Consolidation counselling:
Debt consolidation with debt counselling can provide you with expert debt advice for financial planning. This would help you sort out your present debts as well as prevent you from getting into future debt. Debt counselling services can talk to your creditors about reducing your interest rate, eliminating late fees, altering repayment options and extending your loan term. Look up an agency that is the member of the National Foundation for Credit Counselling (NFCC) or the Association of Independent Consumer Credit Counselling Agencies (AICCCA).
Secured on your collateral low interest debt consolidation loans can sweep away the pile of repayments to your credit and store cards, loans and replace them with one, low cost, monthly payment – one calculated to be well within your means. Never take a loan that is over the top, take something that suits your needs.
It has been found that a significant number of residents are not aware of the benefits of the debt consolidation options and are suspicious about how it works. There is a need to increase the awareness of the debt consolidation solutions and evolve new varieties and features for debt consolidation loans. There is a great potential to increase the benefits of debt consolidation loans.
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(StatePoint) Credit cards are a useful tool for managing personal finances and building credit, but they also expose you to a number of risks — including identity theft and credit card fraud. Thankfully, experts say there are many simple, proactive steps you can take to help protect yourself when using a credit card. Here are seven tips for guarding your credit.
Monitor your credit reports. To identify any suspicious activity, periodically request and review your credit reports and your children’s from the three major credit bureaus: Equifax, Experian and TransUnion. These companies will provide you with a free credit report once per year. Consider requesting a different agency’s report every four months at no charge for more frequent monitoring. If you see any signs of identity theft, credit card fraud or other scams, contact the credit bureaus right away.
Activate fraud alerts. Experian, Equifax and TransUnion also offer free credit fraud alerts. When a potential creditor sees a fraud alert on your credit file, they will take additional steps to verify your identity before authorizing new credit. Fraud alerts last for 90 days but can easily be renewed. You only need to contact one credit bureau to set up alerts — that company will notify the other two.
Freeze your credit. Placing a freeze on your credit reports will prevent anyone from opening new accounts in your name. You will need to contact all three credit bureaus to freeze your reports. Note that it may take several days to lift a freeze if you need to apply for credit. Also, credit freezes do not prevent fraudulent transactions on your existing credit accounts.
Review credit card statements carefully. Check your statements as soon as you receive them to make sure there are no fraudulent charges. Contact your card issuer if you see anything suspicious.
Enroll in bank notification programs. Most banks offer a credit card notification program which will alert you to account charges over a preset amount.
Protect your passwords. Change logins and passwords monthly, use password generators and sign up for two-factor authentication. Security experts recommend a minimum of 14 characters for creating a secure password.
Shop online carefully. Avoid making payments or accessing financial information on unsecured wireless networks, such as those at coffee shops, hotels and restaurants. Your phone should be treated like your computer: password protect it, too.
A Certified Financial Planner professional can help you protect your assets from this type of risk and pick up the financial pieces if your information falls into the wrong hands. To find a CFP professional near you, visit www.letsmakeaplan.org.
With a few simple tools and a bit of diligence, you can safely use and continue to build your credit.
(StatePoint) Experts agree that periods of economic downturn, or recessions, are unavoidable and often follow a period of market growth. However, experts also acknowledge that it is difficult to predict exactly when the next recession will begin.
It is important to manage the pieces of your financial life knowing that a market decline is possible, regardless of the exact timing. A Certified Financial Planner (CFP) can provide you with competent, ethical advice on how to financially prepare to weather a down market.
Here are five steps you can take today to get ready for a possible recession:
• Create or revisit your financial plan. Now is a good time to update your financial plan, including your savings strategy for retirement, to ensure it can withstand a market decline. If you do not yet have a financial plan, start working to put one in place ahead of a recession.
• Develop a cash flow. The simple technique of identifying how much money is coming in and how much is going out can help you develop a short-, intermediate- and long-term plan that keeps you in control of your finances.
• Maintain a healthy emergency reserve fund. If you are still working, maintain six to 12 months of expenses in a safe, liquid account. Retirees should aim to keep 12 to 24 months’ worth of expenses in reserve.
• Pay down your debt. While incurring debt can be a smart financial choice, carrying too much of it — particularly high-interest debt — can be dangerous, especially during a recession. Prioritize paying off your highest interest consumer-related loans (credit card and auto) and then work your way down to the lower interest ones. Try to avoid taking on any new debt.
• Maintain a diversified portfolio. Creating and adhering to a diversified portfolio spreads your risk across different asset classes. You may need to rebalance periodically by trading up assets to maintain your desired level of asset allocation. Be sure that your allocation is tied to your long-term financial goals, instead of basing it on the market’s ups and downs.
A CFP professional can provide you with guidance on navigating any of these financial moves to prepare for a recession. To find a CFP professional near you, visit letsmakeaplan.org.
The good news is that recessions do not last forever. Taking these proactive steps now will help protect you from significant financial damage and quickly recover from potential losses.
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Just how much are all those stories about crippling student debt having on college campuses? You have only to ask post-millennials now trying – although not always successfully – to avoid being saddled with the same heavy burden of debt as their predecessors.
Not only did 83 percent of current college students surveyed consider what their total costs would be before matriculating – just 69 percent of recent graduates had such foresight – but 39 percent of them said the potential price tag was such “a huge factor” that they purposely limited their choice of schools to the most affordable, according to Fidelity Investments’ new “College Savings: Lessons Learned Study.” Only 32 percent of recent graduates, alas, had shown similar restraint.
“It seems today’s college students are perhaps more aware of the financial situation they entered into than those who graduated before them,” says Melissa Ridolfi, Fidelity’s vice president of retirement and college leadership. “That’s a positive development.”
All told, student debt in the U.S. now totals more than $1.5 trillion – second only to mortgage debt, Forbes reports. And the 69 percent or so of the Class of 2018 who took out student loans graduated with an average debt balance of $29,800.
So it’s understandable why recent graduates would be so anxious over whether they’d ever be able to pay off their loans that they’re now having second thoughts about their decisions:
• 40 percent say that while they don’t regret going to college, they would have made different choices in hindsight.
• Only 14 percent felt the value of their education was worth more than the money they had spent.
And future college students should listen to this sage advice from the more than 4,000 respondents surveyed – all recent graduates, current undergraduates, and parents of either or both – on what would have done wonders to ease their own stress levels.
“When asked ‘If you knew then what you know now when it comes to school selection, what would you do differently?’ the no. 1 answer for all respondents was ‘I would have started saving earlier,’” Ridolfi says.
Which logically brings us to another key finding of the study: only 17 percent of current students and recent graduates had taken advantage, prior to college, of what’s arguably one of the best ways to fund higher education – 529 savings plans.
Unlike regular bank savings accounts, they provide a tax-advantaged way to save money to cover tuition, books and other education-related expenses at most accredited two- and four-year colleges, universities and vocational-technical schools.
The key phrase being “tax-advantaged.” Meaning, earnings grow federal income tax-deferred and withdrawals for qualified expenses are free from federal (and, in many places, state) income taxes – thus affording the opportunity to have even more saved for college.
Significantly, Ridolfi says families using a 529 plan managed by Fidelity have been starting to sock money away earlier than ever before, with contributions beginning on average when the child is about age six-and-a-half. Thirty-six percent of Fidelity 529s are even opened for beneficiaries under age 2.
You say a child hasn’t even uttered his or her first complete sentence before they’re two? Probably not. But just so you’re not bushwhacked when they suddenly hit their late teens, free online resources such as Fidelity’s College Savings Learning Center and College Savings Quick Check– a calculator that even shows you the impact of saving a few dollars more a month – can help prepare you for what lies ahead.
With the start of a new decade a mere few weeks away, Americans are feeling particularly good about closing out 2019 when it comes to their current and future financial situation. That said, many are vowing to make it a priority to reduce the burden of personal debt that they incurred this year.
According to Fidelity Investments’ 2020 New Year Financial Resolutions Study, 82 percent of respondents say they are in a similar or better financial position than they were in last year. Most credited their success to their own good habits – saving more (47 percent) and budgeting (29 percent) – rather than their investment gains (18 percent) from a stock market that made one high after another. Less than 25 percent put it down to having been able to work more hours in a strong economy.
And, as the study makes clear, they want to keep the momentum going.
Of the 67 percent considering making a financial resolution, “saving more” and “paying down debt” topped the list, respectively, at 53 percent and 51 percent.
“Living a debt-free life was the biggest motivator for them,” says Melissa Ridolfi, Fidelity’s vice president of retirement and college products.
Heck, given the choice between the classic New Year’s resolution of losing five pounds or socking away $5,000, a resounding 84 percent in the national survey of 3,012 adults opted for savings.
If you want to avoid the biggest and smallest mistakes that respondents made, read on:
• Dining out too much (36 percent).
• Spending too much on non-essentials, such as unused apps, streaming media services, and subscription retail boxes (29 percent).
• Taking on debt or adding to existing debt (28 percent).
•Splurging on something they couldn’t really afford (28 percent).
• Unexpected medical expenses (24 percent).
• Failing to save as much for retirement as they should (18 percent).
So with all the interest in getting a grip on debt, who seems to be faring the best at it?
Boomers, the study finds, with 29 percent crediting being better off financially at year’s end to having refinanced, paid off, or reduced debts or loans. Generation X, the next oldest, trailed at 21 percent, followed by 19 percent of millennials, and just 6 percent of Generation Z.
“Boomers are getting the message that the closer they get to retirement, the more essential it becomes to get their debt under control to make the most out of retirement savings,” Ridolfi says.
Certainly there’s no law that says you have to make a New Year’s resolution – financial or otherwise – but even a huge chunk of those surveyed who weren’t contemplating explicitly doing so, still say they are planning on building up emergency funds. As for what you might call the “traditionalists” out there? Fidelity has some tried-and-true tips that can help ensure your financial vows don’t wind up being among the 80 percent of all resolutions that U.S. News says, alas, fail by the second week of February.
The firm also has an impressive, free online “Moments” tool designed to help you plan for lifestyle changes or react to a myriad of curveballs – i.e., the unexpected medical expenses cited as a big setback in the study – that life throws at you. And accessing the Fidelity Retirement Score gives you a quick look at where you stand with your savings.
Oh, and here’s one last thing to see if you can relate: Seventy-eight percent of those surveyed predicted they’d be even better off financially in 2020.