Advice on past bills and debt consolidation help - The Bills.com Blog
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Advice on past bills and debt consolidation help
Question: Hi I had a few questions for you.. I had a bad credit report and on that I have some personal bill, medical bills, charged off accouts etc, really bad in my eyes as getting credit is difficult and always get denied. I was wondering if a debt consolidation loan is right for me or if there is anyway I can do something to take all of my pastbills currently being collected and passed due and charge off's and put it all on on bill to pay each month. I really want to get my credit cleaned up and going from one creditor to the next is almost impossible. I have tried to make arrangments on debts but when paid off they refuse to take it off my credit report which still hurts my report and score. If there is anything you know of that could help me I would greatly appreciate and response.
Thanks, Chris
Answer: First of all, there is no perfect solution. If your credit is fair or bad, getting a really good refinance loan for debt consolidation could be tough. Your other alternatives are credit counseling and debt settlement.
Very quickly, if you want a free debt consultation with one of Bill's approved debt help partners, click here: http://www.bills.com/debthelp/debt/
Since debt consolidation comes in many forms, it is important that each consumer reflects on what their needs and concerns and financial situation is before signing up for an online debt consolidation program. The four primary concerns for most consumers are: i) monthly payment, ii) time to debt freedom, iii) total cost, and iv) the credit rating impact of the consolidation program. Be sure to evaluate each program, relative to your prioritization of these factors.
Since there are a variety of online debt consolidation options, including credit counseling, debt negotiation/debt settlement, a debt consolidation loan, and other debt resolution options, it is important to fully understand each option and then pick the solution that is right for you. Be sure to evaluate each program, relative to your prioritization of these factors.
Credit Counseling
Credit counseling, or signing up for a debt management plan, is a very common form of online debt consolidation. There are many companies offering online credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors. It is important to understand that in a credit counseling
program, you are still repaying 100% of your debts ? but with lower monthly payments. On average, most online credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan DOES show up on your credit report? and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy ? or using a third party to re-organize your debts.
Debt Settlement
Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money.
Debt Consolidation Loan
Many people think first of a debt consolidation loan when seeking online debt consolidation. If you own a home, a secured debt consolidation loan may be right for you. This type of loan is essentially a home equity loan which is used to pay off your other creditors. Secured consolidation loans help many consumers by consolidating all of their debts into a single monthly payment with a lower interest rate and payment amount. However, be careful before you borrow money against your home to pay off your medical bills; you are converting what was previously unsecured debt into secured debt. This could cause you problems down the road if for some reason you are unable to make your payments, or if life circumstances force you to file bankruptcy, as you may not be able to discharge the secured debt as you would unsecured debt. However, secured debt consolidation loans work for many people, so this is an option to consider carefully?the Bills.com Savings Center is a great resource
to help you find a lender for this type of loan.
You can get a debt consolidation quote from Bills.com to deal with the medical debt: https://www.bills.com/debthelp/debt/
If you do not own a home or other property to offer as collateral for a secured debt consolidation loan, there are several other options you should consider. You could also look into an unsecured personal loan to consolidate your debts. Check out the loans section of the Bills.com Savings Center for unsecured debt consolidation loans that may improve your situation. However, your ability to qualify for either a credit card or a personal loan that will actually save you money greatly depends on your credit score. If your credit history is less than perfect, you may have difficulty finding a lender willing to extend you credit, and if you do find a loan, you should expect to pay a premium in interest. A possible loan resource you may want to explore is www.Prosper.com, a site which puts private lenders in contact with private borrowers. A private lender may be more willing extend you a loan than a traditional bank. Bills.com offers a wealth of information regarding the various debt help options available to consumers?visit http://www.bills.com/debthelp/ for more information.
Net-net: while there are many forms of online debt consolidation, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the online debt consolidation option that fits for you.
Hopefully, one of the several options I have described above may be able to help you. I encourage you to explore the Bills.com website, http://www.bills.com/debthelp/ to read more about these and other options available to you. I hope we can help you find a solution to your debt troubles, and also hope this information helps you Find. Learn. Save.
Good Luck,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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