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Debt a Glossary of Terms
Bankruptcy - Having been legally declared financially insolvent. There are two types of bankruptcy - liquidation, in which your debts are cleared (discharged) and reorganization, in which you provide the court with a plan for how you intend to repay...
Debt Reduction, a Necessary Endeavour
Massive debt is something many Americans face. Debt reduction is now becoming more and more of a necessity. Even a low amount of debt can cost you a lot in the end and it can take a very long time to pay off. An example: Let's say you have $4000...
Debt Settlement Strategies
One of the most common social diseases remains dormant for a long time. And when it raises its head, it reveals its monstrosity slowly. What is the social malady? Think. More than a million Americans are affected by it. Yes, I am talking of the ugly...
Learning the Disturbing Facts about Credit Card Debt
When I received my first credit card in the mail at age 18 I was ecstatic, I said to myself, wow now I’m getting somewhere in life. This credit card company thinks I’m worthy of 500 dollars in credit. So I made my monthly payments like a good...
Your Debt Checklist
A Debt Checklist is the only sensible way to organize and control your finances. Most people aren't actually aware quite how much debt they possess - in fact, a recent survey found that almost 75% of UK adults were up to £5000 out when asked to...
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Getting a Debt Consolidation Loan
Should you find yourself getting in over your head with debt, you might be a prime candidate for a debt consolidation loan. These loans are designed for those with a heavy burden of debt, and are used to consolidate a large number of debts into a single manageable payment.
The debt consolidation loan is used to pay off the other debts, leaving only the loan itself in need of repayment.
How much should I borrow?
Considering that a debt consolidation loan is designed to replace other debts, the amount that you borrow should be as much as you need to pay off the total sum of your outstanding debt.
If you're unable to get the total amount that you need to pay off all of your debts, then you should at least borrow enough with your debt consolidation loan so that you can pay off your largest debts (and hopefully make headway toward the others.)
How much debt do I need to have before consolidation?
There isn't a set amount of debt that you must have before considering a debt consolidation loan; the loan is simply a way of handling debt that is reasonably beyond your ability to pay it back.
Many debt consolidation loan companies offer loans of £50,000 or more, though a growing trend is to offer loans starting at £5,000 as well so as to take care of outstanding debts before they climb as high as the larger loans.
Lesser loans can also be used as a debt consolidation loan, though they occasionally have other
criteria that must be met (especially in much smaller loans.)
What collateral do I need?
As the bank or finance company will obviously be aware of your debt problem when you apply for a debt consolidation loan, you'll need to be able to supply collateral for the loan (meaning that you'll have to be able to guarantee the loan with some property that the lender could sell should you not repay.)
The collateral can vary depending upon the amount of the loan as well as the lender, with the most common forms of collateral being automobile titles and real estate property deeds. As these are usually higher-priced items, using them as collateral allows for a larger debt consolidation loan… not to mention giving a greater incentive for repayment.
A debt consolidation loan can give you a new start if you can't handle all of the various payments you're expected to make that you can't afford. It's also a great way to pay off old debts that may have been turned over to collection agencies, and should be looked at as a viable option before considering more serious actions such as bankruptcy.
You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:
About the Author
John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.
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| Advertisements Promising Debt Relief May Be Offering Bankruptcy |
| Cautions consumers about ads in newspaper, magazine and telephone directories that offer quick fixes for debt problems. |
| www.ftc.gov |
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