Can I Fix It Without A Debt Consolidation Loan

Thursday, January 7th, 2010

Can I Fix It Without A Debt Consolidation Loan? … Tony Coen

As we arrive into 2010 after the global financial crisis many American family’s are deep in debt and falling behind on their payments. This will affect their credit history and cause their credit score to be marked down. When you have a low credit score financial institutions are reluctant to lend you money and those that will lend you money want to charge additional interest to cover their risk. Far to many people will turn to a bad credit debt consolidation loan to solve these problems for them and find that they get deeper into trouble.

Going to a debt councelor is another way of looking for some magic solution to make your debts disappear so you can continue spending as you have in the past. Come on now – these things are all cop outs. If you are at all serious about sorting out your problems and gaining control of your life again then there is just the one way to handle this situation. Cut back your spending drasticly and pay off your debts. Now isn’t that easy – you don’t need a debt councelor and you don’t need a bad credit debt consolidation loan – all you need is a little bit of will power.

Before you default on a loan or on your credit cards speak to the financial institution about your situation and ask for an adjustment to the agreement. They will be open to your suggestions so have some sort of proposal worked out and put it to them. It could be that you just can’t make the payments each month on all your commitments but if they were each reduced by 20% then you could cover them. Some high interest rate credit cards may accept a suggestion to lower the interest charges for an agreed time.

Over the years I have been called upon to assist friends that have found themselves in difficulty and one case that comes to mind was a business owner whose business went broke but he had used his personal credit card to cover the business for a few months. He was now out of work and owed $60,000 on his credit card with no way of paying this. I went with him to his bank and told them that he would most likely go bankrupt as he had no income and no assets and they agreed to accept $6,000 as full settlement of the debt. We then went next door to another bank and arranged an unsecured personal loan for $6,000 and paid out the credit card debt.

This scenario was only open to this gentleman because his credit score had not been affected by his situation because he acted before going into default. Acting early on these things mean that you are seen as a responsible person wanting to find a way to meet your commitments. If you are trying to find remedies after going into default you are seen as an irresponsible person who is trying to avoid your responsibilities.

If all other avenues have failed and you have a bad credit score and you want to use a bad credit debt consolidation loan then you must proceed with caution. Avoid companies with attractive ads in newspapers or on TV because it is likely that these companies will be out to take advantage of you. Do some research on the internet and find companies offering reasonable deals. Compare interest rates and the terms and conditions of the loan. Beware of any low interest rate offers as the interest rate will apply only for people that have good credit scores and a penalty interest rate will apply for others. Look out for hidden charges in the terms and conditions like a substantial penalty for late payment.

So you have chosen a bad credit debt consolidation loan and you are now changing your life style and spending habits and concentrating on reducing your debts. Learn about your credit score and make every effort to improve your credit score over the next 12 months. When you have improved your credit score it is a good time to take out a personal loan at good interest rates and pay out this bad credit debt consolidation loan.

Related Blogs

Share and Enjoy:

Tags: Bad Credit Debt Consolidation, Bad Credit Debt Consolidation Loan, Business Owner, Coen, Commitments, Councelor, Credit Debt, Credit History, Credit Score, Debt Consolidation Loan, Drasticly, Financial Institution, Financial Institutions, Global Financial Crisis, High Interest Rate, High Interest Rate Credit Cards, Interest Charges, Magic Solution, Personal Credit Card, Rate Credit Cards

This entry was posted on Thursday, January 7th, 2010 at 8:49 am and is filed under Uncategorized | add this page to Mister Wong. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.