Does Debt Settlement help to Consolidate my Debt? Are they the same thing?

Is Debt Consolidation Effective in Debt Settlement?

Debt consolidation is a process of settling your debt. Although very popular, most people ask if it is an effective method even for people who are already swimming in debt.

The straightforward answer to this is NO. Usually, opting for debt consolidation does not decrease the total amount of debt you owe. What it simply does is to combine all your debts and allow you a way to make monthly payments that will settle a portion of all your dues. Your payment goes to an agent or debt consolidator who will normally charge a significant fee for the service they are providing of getting your monthly payments and making sure that every creditor is paid on time with the sufficient amount.

In the past years, there have been plenty of scams associated with debt consolidation that have taken away millions of dollars from individuals who paid their dues and later realized that their money never reached the creditors or were handed in late that is why penalties and high interest rates were charged. This led them to suffer a worse condition compared to where they started.

There are also loans for debt consolidation that are charged with high interest rates for those who do not have sufficient cash to settle their bills each month. This is an even worse option in many cases. The reason for this is that the loan will most unlikely cover all of your debts which means that you still owe a lot to your creditors and you have another loan to a new creditor. When you carefully analyze this, you have a higher total debt than the time you started with the consolidation.

Debt consolidation and loans may just lengthen and worsen your existing debt. Oftentimes, they do not get people out of their debt situation.

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Bad Credit Loan : Can I Get a Loan if I have Bad Credit?

A bad credit loan is a type of loan accorded to a borrower with poor credit standing. The reason for obtaining a bad credit history is usually a default in the loans of the individual. Most creditors do not approve loans made by people with poor credit because of the high possibility of default. However, if creditors have to lend money to these people, the interest rate charges are usually high.

Bad credit loans are of two types, secured and unsecured. Secured bad credit loan is the type of loan with collateral like a house or any other asset owned by the borrower. On the other hand, unsecured bad credit loan does not have any tangible collateral that is why it is not easily granted.

Obtaining an unsecured loan can be the only way to obtain a loan for people with bad credit standing. However, getting this type of loan can be a disadvantage. The drawback of getting a bad credit loan must be considered before applying for an unsecured credit loan. High interest rate that can aggravate the existing financial challenges of the borrower is the primary disadvantage of an unsecured credit loan. The average rate of interest for bad credit loans is 15 points higher than the premium loan value.

Another disadvantage of obtaining a bad credit loan is that the borrower can get trapped to a cycle of loans. Many people who get a high interest loan end up having difficulties paying for it that they tend to apply for another one. This cycle goes on and on until the loans and interest rate charges pile up and become difficult to pay.

In order to avoid getting a bad credit loan, explore some possible alternatives to borrow money. Friends and family members can help without the interest charges. Organizing one’s expenses to avoid unnecessary expenses may also become necessary. Of course, saving money must be on the top list of things to do in order to prevent loaning.

Bad credit loans can be avoided if a good credit standing is maintained. However, if there is no other choice left, it is best to look for the best loan from the many available loans provided by lenders. Look for lower interest rates and make a bigger down payment if possible to lighten the payment terms.

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Online Bad Credit Personal Loans-efficient and Hassle Free Way to Fund

very bad credit

Online bad credit personal loans are specially designed to provide financial help to people suffering from bad credit history. The fact that it can be availed through online lenders is an added bonus because you don’t need to visit lenders personally in order to avail it. You can avail online bad credit personal loans for any purpose like wedding, vacation, paying debts, debt consolidation and so on.

Online bad credit personal loans are loans for people suffering from bad credit history due to arrears, defaults, CCJ, IVA, bankruptcy, late payments etc. a person having FICO score less than 600 out of a total of 850 points is called a bad creditor. If you are also one of them, then you are eligible to avail online bad credit personal loans. You can choose either secured online bad credit personal loans or unsecured online bad credit personal loans depending upon your needs. You will have to place one of your assets as collateral against the loan amount in order to avail secured online bad credit personal loans. On the other hand no such security is needed to avail an unsecured online bad credit personal loan. Amount of loan that can be availed with inline bad credit personal loans ranges from £5000 – £75000. The loan amount depends upon various factors like repayment ability, bank details etc of the borrower. The repayment duration of bad credit personal loans is very flexible that ranges from 5-25 years. Lenders charge a bit higher interest arte with online bad credit personal loans. This is quite obvious because they advance the loan ignoring the bad credit history of the borrower.

Applying for online bad credit personal loans is very easy. All you need to do is fill up an online application form and provide certain details like your current address, contact number, email address and the type of loan you want to avail. Lenders will then get back to you with their offers. You can also use internet to search for various banks, financial institutions and lending firms that offer online homeowner loans. You can visit their websites and get free loan quotes. You can then compare between offers of various lenders and choose the one that offers online homeowner loans at competitive interest rate. Online bad credit personal loans are approved within very short period of time because it requires less paperwork. Also it consumes less time and is hassle free.

To conclude we can say that online bad credit personal loans can availed by people suffering from bad credit history either by placing a collateral or without it through online method.