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Archive for December, 2010

Common Ways To Find A Debt Elimination Program

Written by Toi Williams on Dec 30th, 2010 | Filed under: debt relief

Individuals across the nation do not realize that it is easy to find for a debt elimination program or a debt consolidation program when facing financial difficulties.  Entering a debt elimination program is not difficult for most people and requires little effort from the person interested in eliminating their debt.  There are different methods that can be used to find a debt elimination program and if your past credit history reflects a large amount of negative activity, you should have no problem getting approved for the debt elimination program.

Debt Elimination Commercials

The most common method for finding for a debt elimination program is responding to a commercial offer.  These commercials are played on television stations when adults are likely to be watching in order to make their sales pitch about their debt elimination services and entice the person into signing up for the debt elimination program.  These television commercials reach thousands of viewers every day.

There are many companies that use commercials to reach a wide audience for their debt elimination programs and this method works for many reasons.  Individuals like commercials for debt elimination programs because they do not have to search for the offers, they can find the programs from the comfort of their own home, and the approval process takes effort as all that is needed is to respond to a phone questionnaire or fill out a short form on the company’s website.  Experts believe that the majority of debt elimination program participants found their debt elimination programs this way, but very few people actually get out of debt using these programs.

Telephone Contact

Another way for individuals to find a debt elimination program is by using the telephone and local telephone book to find a debt elimination company to contact.  These individuals choose to call the representatives of the debt elimination company and give them their information personally to see if they meet the requirements for the debt elimination program they are interested in.  The approval process can be much quicker using this method because the individual will not have to wait for the response and the representative can tell the individual whether they qualify within a few minutes.

Debt Elimination Company Websites

Some individuals find a debt elimination program by using the websites of debt elimination companies and filling out online application forms.  Most companies in the debt elimination industry have websites where an individual can go to find a specific type of debt elimination program.  Due to the numerous types of debt elimination programs available using this method, many people are able to find programs that meet their personal needs better than if they relied on commercial offers alone.

Many people get into debt elimination programs because they don’t know what they’re getting themselves into. College debt statistics show that even the most educated people wander their way into debt.


What Is The Difference Between An Unsecured Personal Loan And A Secured Personal Loan?

Written by Toi Williams on Dec 29th, 2010 | Filed under: loans

There are two types of personal loans that you can obtain as an individual. The first is a secured personal loan, and the second is an unsecured personal loan. A secured personal loan is a loan that you get with collateral, and therefore is a much easier loan to get as a result. The reason for this is that they know they can get back their money with the collateral by selling it, so the risk is much lower.

An unsecured personal loan is one that does not have the backing of collateral.  These loans are much harder to get and are based on your credit rating. As a result, you may have to pay higher interest rates for an unsecured personal loan with credit that is not perfect.  Typically, an unsecured personal loan will leave the individual responsible for repaying the loan, but there will be a personal guarantee from the individual that they will repay the loan in a manner that matches the terms of the personal loan.

What Are The Risks?

The borrower’s risk is lower with an unsecured personal loan because if they do not pay back the loan, the only damage that they suffer will be to their credit rating.  With no collateral backing the loan, the borrower will not lose any of their personal property in the event of a default on the loan.  The borrower’s credit score will be reduced by a significant amount, but over time the credit score can be repaired and restored to its former heights.

A good way to display the difference between a secured personal loan and an unsecured personal loan is with an example. If you borrow money from a friend and they tell you that they will hold on to your laptop as collateral until you repay the money, then you know that if you don’t pay them back within a reasonable period of time, you will lose your laptop. Your friend knows that if you do not pay back the loan, they will not have their money but they will have a new laptop. However, if you borrow money from a friend and they do not require you to give them anything for collateral, then if you do not pay back the loan you will not have to give up your personal property.


Get A Credit Report For Free

Written by Toi Williams on Dec 28th, 2010 | Filed under: credit score

Getting a credit report for free is an important step for maintaining a good credit history.  When a credit report is obtained, you can review your credit report for any errors that may decrease your credit score or review your accounts to make sure that no other person has opened accounts in your name. 

Mistakes in a credit history can hamper your ability to purchase a home, purchase a car, or obtain a credit card.  It can also result in lenders charging you a higher interest rate than you would have qualified for with a better credit score. 

There are a couple of methods that can be used to get a credit report for free and some may consider one method better than the other.

Commercial Websites

There are many websites available that show how to get a credit report for free.  The most popular websites typically offer a credit report from one of the three major credit reporting agencies.  A credit report from any these agencies will provide a comprehensive view of anything that has affected your credit report over the last 7 years. 

The credit reports received from the credit reporting bureaus list accounts that have been opened, late or missed payments reported, and credit limits for the accounts.  Having this information allows you to check for any items that do not belong in your credit file.  It also gives you the ability to dispute any mistakes on the credit report before it ruins your chances of obtaining a loan or being assigned a low interest rate for a credit product.

Government Sponsored Websites

There is one website where individuals can get a credit report for free without any strings attached.  The website, www.annualcreditreport.com, is run by the three major credit reporting agencies on behalf of the federal government to comply with a law that states that the credit reporting bureaus must give each consumer one free copy of their credit report every year when requested.  This provides each person with three credit reports to review each year without any of the additional services required by other websites that offer credit reports for free.


Analyzing The Mortgage Loan Market

Written by Toi Williams on Dec 26th, 2010 | Filed under: loans

One important consideration that needs to be made when you are getting a mortgage loan is the nature of the current mortgage loan market. Individuals that are not experienced with financial markets or the terminology used in those markets will need to find a way to get information about the mortgage loan market that is accurate and reliable.  This will ensure that they will not make mistakes through ignorance and end up in a situation that can only be resolved through foreclosure.

Getting Information

One of the best ways to learn about the mortgage loan market and determine if the time is right to get a mortgage loan is to talk with a mortgage loan consultant from a mortgage loan office or banking institution that you have done business with in the past. A mortgage loan broker can accomplish the same thing and give you the information that you need to make an informed decision about whether it is right time for you to obtain a mortgage loan.

The mortgage loan market fluctuates up and down regularly and different times of the year will have different numbers set as the prime interest rate. Changes in the interest rates will change the amount of money paid on top of the principal of the mortgage loan.  It is important to look at the mortgage loan market with your mortgage loan consultant to find out what is the best option for your needs.

If the mortgage loan market is doing well, interest rates will be higher because there are more people borrowing. Therefore, the mortgage loan companies can to make more money because they are in a better position with so many people borrowing. However, if there are less people borrowing, then there will be lower interest rates because the mortgage loan lenders want to entice people to borrow. Look at the mortgage loan market and time your loan request to ensure it is made at the right time.


The Special Fees You Pay To Increase A Company’s Profits

Written by Toi Williams on Dec 22nd, 2010 | Filed under: Uncategorized

If the price of a commonly purchased item increases by a significant amount, some consumers will decide that the product is not worth the price and will stop purchasing that item or will find a cheaper alternative.  Businesses know this and avoid raising the price of the item to retain their customers, but the retailers still want to make more money with as little effort as possible.  This is why many companies use special fees to increase their profits without providing much more to their customers.

Special Fees For Convenience

The most prolific special fees used today are the convenience fees charged for doing business in a particular way.  These fees are often charged for paying a bill online or over the telephone, purchasing tickets to an event without traveling to the event location, or using a bank ATM machine to access an account that is not held by the same bank.  These convenience fees are often disclosed at the end of the transaction just prior to completion when there is less of a chance that the consumer will cancel the transaction to avoid paying the fee.

Special Fees For Transactions

Some companies now charge special fees for certain types of transactions in the accounts that they hold.  Banks and credit card companies are notorious for these fees and charge the fees for activities such as using a teller more times than the amount specified in the account information, using a credit card to access cash, making transfers between accounts, or having too many transactions within a specified time period.  Every company can choose what types of transactions will have special fees attached so one company may charge transaction fees that others do not.

Special Fees For Maintenance

Maintenance fees are typically fees charged by the company to perform the actions that it takes to service the account.  These actions have always been performed to provide information in the account current and to make the customer aware of the account information, but now companies add an additional charge for each action that the customer is expected to pay to continue using the account.  These charges may include fees for mailing paper account statements to the home, fees for reviewing account information for upgrades or lower interest rates, or annual fees for the privilege of accessing the account.  These fees can add hundreds of dollars to the amount that each consumer pays the company, adding millions of dollars to the company’s profits.


Simple Tips For Using Credit Cards Wisely

Written by Toi Williams on Dec 21st, 2010 | Filed under: credit cards

Millions of individuals across the nation have obtained a credit card for their personal use and have used that credit card on a regular basis since receiving the credit card from the issuer.  This is great for the credit card company as it increases the amount of interest they earn from their customers accounts and provides many opportunities for additional income in the form of fees and penalty charges on the accounts.  There are a number of ways to ensure that you do not become a victim of these additional fees and being aware of the common credit card usage mistakes can save you hundreds of dollars in penalty charges annually.

Pay Credit Card Bills As They Arrive

Penalty charges for late payments on credit card bills earn credit card issuers billions of dollars in additional income annually, often costing the account holder as much as $35 per occurrence. In addition, every late payment to a credit card account is reported to at least one of the three major credit reporting bureaus for inclusion on the person’s credit report and will decrease their credit score.  To avoid these penalties, pay credit card bills as soon as they arrive in the mail to ensure that the payment is received on time.

Be Aware Of Interest Rate Increase Triggers

The interest rate that is charged for a credit card account can change based on a number of variables.  Different companies may have different actions specified as interest rate increase triggers for the accounts that they hold and each company discloses these interest rate increase triggers in the terms and conditions for each account.  Be aware of what actions could cause the interest rate for the credit card to increase and avoid those actions as much as possible so that you are not paying more to use the credit card.

Pay Off The Balance Each Month

Using credit wisely means never putting more on the credit card than you can afford to pay off when the bill arrives.  This ensures that credit will always be available in the event of an emergency and that fees will not be charged for carrying a balance on the credit card from month to month.  In order to avoid paying finance fees and interest charges each month, the entire balance of the account should be paid off when the bill arrives.


Getting Serious About Getting Out Of Debt

Written by Toi Williams on Dec 13th, 2010 | Filed under: debt relief

Getting out of debt is a serious challenge for a large portion of the population.  Although acquiring massive amounts of debt can be done without thinking in many cases, getting out of debt requires careful consideration and a spending plan that eliminates wasteful spending.  There are a number of different methods that can be used for reducing or eliminating your debt, but following these simple tips can make the process much easier.

Realize Debt Is No Longer Acceptable In Your Life

Over the past decades, people have been conditioned to want to purchase the latest models of many luxury items regardless of price, including electronics and clothing, and going into debt to afford these items was socially acceptable.  Changing this mindset will be difficult, but this change is necessary for you to get serious about getting out of debt.  While you are trying to reduce or eliminate your debt, the accumulation of more debt has to be unacceptable in any circumstances or you will never reach your goal.

On Time Payments Are Important

Paying extra money to your creditors because you are a few days late in making your payments provides you with no benefit and may reduce your credit score and/or increase the interest rate that you have to pay for credit.  Typical penalty fees for late payments can range from $5 to $35 depending on the type of company due the payment.  Over the course of a year, consistently late payments on multiple accounts can cost you thousands of dollars.

Create An Emergency Expenses Account

Not having an emergency expenses account can be devastating to your finances if a financial emergency occurs.  This is typically when a person must turn to high interest debt, such as credit cards or payday loans, to be able to handle the issue that has arisen.  If you have emergency finances available, you are less likely to resort to the accumulation of high interest debt to maintain your quality of life.
 
Eliminate Unnecessary Expenses

One of the biggest money drains for your bank account are the tiny unnecessary expenses that are made on a regular basis.  For example, purchasing a specialty coffee from a coffee shop on the way to work will cost you 5 times as much as it would have cost you to brew a cup of coffee at home.  Examine your life for areas where money could be saved by simply doing more things yourself or refraining from purchasing items that you really do not need.


Things To Consider When Refinancing Your Home

Written by Toi Williams on Dec 12th, 2010 | Filed under: loans

Refinancing a home is not a decision that should be taken lightly because there can be a number of negative consequences to refinancing a home for the wrong reason or at the wrong time.  These negative consequences could include the addition of thousands of dollars to the mortgage loan or the eventual loss of the home if the refinancing terms are not favorable.  There are a number of things that should be taken into consideration before making the decision to refinance your home in order to ensure that the best decision for your financial situation has been made. 

Why Are You Refinancing?

There are many different reasons cited for refinancing a home loan and some reasons are much more responsibly thought out than other reasons.  Bad reasons for refinancing a home loan include paying for an expensive vacation, paying off credit card debt without creating a new spending plan, and purchasing luxury items.  Refinancing for these reasons add thousands of dollars to the balance of your mortgage loan with very little gain to show for it in the long run.

Average Interest Rates

If current interest rates are much lower than the average interest rates when you purchased your home, it may be to your advantage to refinance and obtain a lower interest rate.  This is only true if you are refinancing into a fixed-rate mortgage loan, as the interest rate for an adjustable-rate mortgage or an exotic mortgage can change at any moment.  If current interest rates are higher than the interest rate you are currently paying for your mortgage loan, refinancing may cost you more than staying with your current mortgage.

Length Of Residency

The length of time that you intend to stay in the home should also have an effect on your decision whether to refinance your mortgage loan.  Refinancing is only economically feasible if you intend to stay in the home for at least 5 years after the home has been refinanced.  If the length of time that you intend to stay in the home is shorter than 5 years, refinancing will cost you money, as almost every dollar you pay will be going towards the interest of the loan, not the principal.


Tips For Paying Your Bills When You’re On The Financial Edge

Written by Toi Williams on Dec 7th, 2010 | Filed under: mindset

Many individuals today are facing the loss of a job, the loss of hours, or a decrease in the amount of pay they are taking home.  This can make paying all of the monthly bills difficult, if not impossible, causing stress and heartache for the individuals affected.  When facing a monetary shortfall, spending priorities must be established for every aspect of your life, including your monthly bills.

Your Top Priority

When facing a financial shortfall and unable to pay all of your monthly expenses, providing necessities for your family should always be your top priority.  Many creditors and debt collectors may not see the situation this way and may threaten legal action if they are not paid promptly.  Providing the basics that your family needs to survive is much more important than your credit score, so pay for these necessities before you spend the rest of your money paying your bills.

Housing Expenses

Your next spending priority should be your housing related expenses, such as rent or mortgage payments, real estate taxes, and insurance premiums.  It is very important that you continue to have a place to live while you are trying to figure out your financial situation and missing these payments could cause you to lose your home.  Condo fees and lot payments for mobile homes are also very important real estate related payments that should not be missed.

Utility Bills

Having heat in the winter and electricity to power your stove are also very important for a simple quality of life and not having these things can make living in your home very difficult.  Utility payments for gas, water, and electricity should be the next payments made with the money that you have available.  All of the hard work and energy you put into earning enough to make your housing payment will be for nothing if the home is unlivable due to a lack of utilities.

Transportation Expenses

In many areas of the country, having reliable transportation is essential to being able to earn money to pay your bills.  If bus service is available, be sure to allocate enough money to be able to pay for the service to transport you to work or other necessary locations.  If a car is your main mode of transportation, be sure to stay current on your car payments and insurance payments so that you will be able to drive legally and not have your vehicle repossessed.

Low Priority Debt Obligations

Many of the debts that involve debt collectors making harassing phone calls are actually low priority debts that should be paid when the above expenses have been taken care of.  Credit card payments, open merchant accounts, and fees owed to professionals should be considered low priority debt because non-payment of these debts will not quickly result in a loss of your quality of life.