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DEBT CONSOLIDATION
Courtesy of Wikipedia, the free encyclopedia
Debt consolidation entails taking out one loan to pay off many others. This is
often done to secure a lower interest rate, secure a fixed interest rate or for
the convenience of servicing only one loan.
Debt consolidation can simply be from a number of unsecured loans into another
unsecured loan, but more often it involves a secured loan against an asset that
serves as collateral, most commonly a house. In this case, a mortgage is secured
against the house. The collateralization of the loan allows a lower interest
rate than without it, because by collateralizing, the asset owner agrees to
allow the forced sale (foreclosure) of the asset to pay back the loan. The risk
to the lender is reduced so the interest rate offered is lower.
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The Rest Of Your Life!
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little as 3 - 5 years no matter your income or where you live! Best part:
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Powerful Information Based On Proven
Techniques And Strategies To Get Out Of Debt
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Now, Everyone Can Legally & Ethically
Wipe-out All Of Their Debt
(Including Their Mortgages)
With The Money They Already Make,
Without Going Into Credit Counselling
Or Filing Bankruptcy, In A Just A Few Short Years,
Following A Simple And Easy System!
Click on the BLUE link Debt Elimination for more information
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CREDIT SECRETS BIBLE™
If You Can Read And Write
at the 5th Grade Level Then I Can
Show You The Secrets To Raise Your
Credit Score up to 249 Points
In 90 Days... and Get APPROVED For
The CAR, HOME, Business Loans,
and CREDIT CARDS You Deserve!
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Sometimes, debt consolidation companies can discount the amount of the loan.
When the debtor is in danger of bankruptcy, the debt consolidator will buy the
loan at a discount. A prudent debtor can shop around for consolidators who will
pass along some of the savings. Consolidation can affect the ability of the
debtor to discharge debts in bankruptcy, so the decision to consolidate must be
weighed carefully.
Debt consolidation is often advisable in theory when someone is paying credit
card debt. Credit cards can carry a much larger interest rate than even an
unsecured loan from a bank. Debtors with property such as a home or car may get
a lower rate through a secured loan using their property as collateral. Then the
total interest and the total cash flow paid towards the debt is lower allowing
the debt to be paid off sooner, incurring less interest.
Because of the theoretical advantage that debt consolidation offers a consumer
that has high interest debt balances, companies can take advantage of that
benefit of refinancing to charge very high fees in the debt consolidation loan.
Sometimes these fees are near the state maximum for mortgage fees. In addition,
some unscrupulous companies will knowingly wait until a client has backed
themselves into a corner and must refinance in order to consolidate and pay off
bills that they are behind on the payments. If the client does not refinance
they may lose their house, so they are willing to pay any allowable fee to
complete the debt consolidation. In some cases the situation is that the client
does not have enough time to shop for another lender with lower fees and may not
even be fully aware of them. This practice is known as predatory lending.
Certainly many, if not most, debt consolidation transactions do not involve
predatory lending.
Contents
[hide]
* 1 Student loan consolidation
* 2 Concerns of consolidation
* 3 See also
* 4 References
* 5 External links
Student loan consolidation
In the United States, federal student loans are consolidated somewhat
differently, as federal student loans are guaranteed by the U.S. government. In
a federal student loan consolidation, existing loans are purchased and closed by
a loan consolidation company or by the Department of Education (depending on
what type of federal student loan the borrower holds). Interest rates for the
consolidation are based on that year's student loan rate, which is in turn based
on the 91-day Treasury bill rate at the last auction in May of each calendar
year.
Student loan rates can fluctuate from the current low of 4.70% to a maximum of
8.25% for federal Stafford loans, 9% for PLUS loans. The current consolidation
program allows students to consolidate once with a private lender, and
reconsolidate again only with the Department of Education. Upon consolidation, a
fixed interest rate is set based on the then-current interest rate.
Reconsolidating does not change that rate. If the student combines loans of
different types and rates into one new consolidation loan, a weighted average
calculation will establish the appropriate rate based on the then-current
interest rates of the different loans being consolidated together.
Federal student loan consolidation is often referred to as refinancing, which is
incorrect because the loan rates are not changed, merely locked in. Unlike
private sector debt consolidation, student loan consolidation does not incur any
fees for the borrower; private companies make money on student loan
consolidation by reaping subsidies from the federal government.
**** ooo000ooo****
Everything You Know Is Wrong!
About Being Debt Free That Is!!
And It Will Keep You In Debt
The Rest Of Your Life!
Hundreds use his secret to gain 100% debt freedom and live the “good life.”
You can too! In fact, his secret guarantees you will become debt free in as
little as 3 - 5 years no matter your income or where you live! Best part:
You can start shrinking your debt for FREE if you choose!
Click on the BLUE link Being Debt Free for more information
**** ooo000ooo****
**** ooo000ooo****
Get Out Of Debt Fast
Without Bankruptcy Or Debt Consolidation.
Click Here To Learn The Amazing Secrets
Of How I Got Rid Of $63,000 Of Debt
In Only 4 Months Without Filing Bankruptcy
Or Using Any Type Of Debt Consolidation Service!
Click on the BLUE link Get Out of Debt Fast for more information
**** ooo000ooo****
**** ooo000ooo****
Get Out Of Debt
The Debt Buster System
Powerful Information Based On Proven
Techniques And Strategies To Get Out Of Debt
Without Bankruptcy. Repair Bad Credit Fast!
Click on the BLUE link Debt Buster for more information
**** ooo000ooo****
**** ooo000ooo****
Debt Eliminatrix(TM)
Debt Elimination System
Now, Everyone Can Legally & Ethically
Wipe-out All Of Their Debt
(Including Their Mortgages)
With The Money They Already Make,
Without Going Into Credit Counselling
Or Filing Bankruptcy, In A Just A Few Short Years,
Following A Simple And Easy System!
Click on the BLUE link Debt Elimination for more information
**** ooo000ooo****
**** ooo000ooo****
CREDIT SECRETS BIBLE™
If You Can Read And Write
at the 5th Grade Level Then I Can
Show You The Secrets To Raise Your
Credit Score up to 249 Points
In 90 Days... and Get APPROVED For
The CAR, HOME, Business Loans,
and CREDIT CARDS You Deserve!
Click on the BLUE link Credit Secrets for more information
**** ooo000ooo****
Student loan consolidation can be beneficial to students' credit rating, but
it's important to note that not all federal student loan consolidation companies
report their loans to all credit bureaus.
Concerns of consolidation
In recent years, reports in the media have raised concerns about the use of
consolidation loans. The worry is that many people are tempted to consolidate
unsecured debt into secured debt, usually secured against their home. Although
the monthly payments can often be lower, the total amount repaid is often
significantly higher due to the long period of the loan. Debt consolidation
sometimes only treats the symptoms of debt and does not address the root
problem. In some circumstances, snowballing debt may be a better solution.
There are other alternatives to a debt consolidation loan, where unsecured debt
is not "shifted" to secured debt, but is eliminated through a settlement or
payment plan. Debt consolidation can be confusing for many people, so it is
helpful to learn about all of your options, and sometimes with the help of an
advisor.
Courtesy of Wikipedia
http://en.wikipedia.org/wiki/Debt_consolidation
**** ooo000ooo****
Everything You Know Is Wrong!
About Being Debt Free That Is!!
And It Will Keep You In Debt
The Rest Of Your Life!
Hundreds use his secret to gain 100% debt freedom and live the “good life.”
You can too! In fact, his secret guarantees you will become debt free in as
little as 3 - 5 years no matter your income or where you live! Best part:
You can start shrinking your debt for FREE if you choose!
Click on the BLUE link Being Debt Free for more information
**** ooo000ooo****
**** ooo000ooo****
Get Out Of Debt Fast
Without Bankruptcy Or Debt Consolidation.
Click Here To Learn The Amazing Secrets
Of How I Got Rid Of $63,000 Of Debt
In Only 4 Months Without Filing Bankruptcy
Or Using Any Type Of Debt Consolidation Service!
Click on the BLUE link Get Out of Debt Fast for more information
**** ooo000ooo****
**** ooo000ooo****
Get Out Of Debt
The Debt Buster System
Powerful Information Based On Proven
Techniques And Strategies To Get Out Of Debt
Without Bankruptcy. Repair Bad Credit Fast!
Click on the BLUE link Debt Buster for more information
**** ooo000ooo****
**** ooo000ooo****
Debt Eliminatrix(TM)
Debt Elimination System
Now, Everyone Can Legally & Ethically
Wipe-out All Of Their Debt
(Including Their Mortgages)
With The Money They Already Make,
Without Going Into Credit Counselling
Or Filing Bankruptcy, In A Just A Few Short Years,
Following A Simple And Easy System!
Click on the BLUE link Debt Elimination for more information
**** ooo000ooo****
**** ooo000ooo****
CREDIT SECRETS BIBLE™
If You Can Read And Write
at the 5th Grade Level Then I Can
Show You The Secrets To Raise Your
Credit Score up to 249 Points
In 90 Days... and Get APPROVED For
The CAR, HOME, Business Loans,
and CREDIT CARDS You Deserve!
Click on the BLUE link Credit Secrets for more information
**** ooo000ooo****
HEALTH CHECK
If you feel the STRESS is affecting your health then it may be advisable to end the cause of the stress. It may mean a few changes in your life, but remember that you've probably ridden a bumpy ride so far and shown how resourceful you are; so to end the cause may not necessarily mean an ending of a chapter, but the starting of a new one. You are resourceful, you are competent, so therefore a new start is maybe just what you need. You will find an article about stress should you need it within this website.
DISCLAIMER – Reading and understanding the legalities of Liquidation and Bankruptcy on this website is no substitute for proper legal advice. Whilst the information within this website is a good guide, there maybe situations where the information is not understood correctly or miss-interpreted.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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