Dear Money Guy...

How Can I Get Some Grant Money Too??

2009-06-19T10:40:00.000-07:00

Dear Money Guy,

This jerk at my office was bragging to everyone who'd listen that he'd just received grant money from the government to help repay some personal debt (shoot, I didn't even know you could do that).

Since me and this guy areb't very friendly, I don't know what resources he used to get that government grant. I have looked exhaustively online, but most of the info seems outdated, boring as heck, or downright confusing.

I don't want to drop this. If there's a way for me to get my hand on some money that I never have to pay back, well, that sounds awesome right now (especially with this economy).

My question is: how and where can I get information that will help me get some grant money?

Thanks,

- Terrence
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Dear Terrence,

It's crazy. The government sets aside billions of dollars for grant money for it's citizens, but then makes it very hard to get access to. And you're right. There's plenty of info regarding grants. But, it's almost too much.

Sometimes it's better to turn to one reliable resource and get your answers now, then spend countless hours in front of your computer trying to piece together info from several different websites.

My recommendation is a site called FederalGrantSource.org. They have this "accelerated grant program" that quickly and easily gets you the grant information for your particular need. There's free money for real estate purchasing and renovation, education, small business, etc.

I guarantee that you will discover a grant program that you didn't know existed that you qualify for right now. There's literally thousands of grant programs available.

Click Here If You'd Like To Get Grant Money You Never Have To Repay

The Money Guy

What's The Best Way To Get Financing For A Car Purchase?

2008-12-30T19:43:00.000-08:00

Dear Money Guy,

My car is having major issues, and I'm looking on buying another one. I don't have the cash to pay for one in full. So I'm looking to see what my options are for financing.

My credit isn't too bad, but I just started a new job and I don't have much money to put down as a down payment.

My question is: what's the best way to get financing to purchase a car?

Thanks,

- Rex
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Dear Rex,

Ah, don't you know the power of the internet? With just a few clicks, you can find hundreds of auto insurance companies offering their service.

But with so many too choose from, which company do you go with?

Well, the best option is to get a recomendation from a friend. If that's not something you feel comfortable doing (I wouldn't go that route, personally), then you should do your due diligence with research.

What company would I recommend?

Well, especially with your situation, I would suggest MyCreditTree.com. They are the ONLY company that you see advertising a 99% loan approval rate. And with the crisis going on in the financing sector (it's getting harder and harder for people to qualify for car loans), a bold claim like that should at least be given a glance. And you'll get an answer in 60 seconds!

You can visit the site by clicking this image:

They are a great company to deal with, especially if you have blemishes in your past or credit that might not be so hot at the moment. And the best thing about them is that you'll get your answer in about 60 seconds. Some companies take days to get back to you.

Do you know someone thinking about buying a car? Would you mind doing me a favor and letting them know about my blog. Click Here-->

Thanks for your help,

The Money Guy

What Questions Should I Ask A Lender Before Getting A Loan?

2008-12-20T17:41:00.000-08:00

Dear Money Guy,

I'm looking into getting some financing set up so that I can pay off some credit card debt, as well getting a new roof put on my house.

My question is, what questions should I ask the lender before getting the loan?

- Steve M.

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Dear Steve,

Personal loans are those that can be used for a variety of uses including vehicles, home repairs, vacations, education, and many more endless possibilities. Personal loans can be obtained from banks, financial investors, and other lending institutions including those found on the internet. It can be confusing to decide who to conduct business with. There are some questions you need to ask potential lenders before making any type of commitment on a personal loan.

First, it is important for you to understand that as a customer or potential customer, you have the legal right to ask lenders questions. Do not conduct business with any lender who is not willing to answer your questions in detail. Be wary of lenders who tell you not to worry about the details or who try to rush you through the process. Both of these should be red flag indicators that something isn’t right. Quality lenders who have nothing to hide are more than happy to answer any questions you have about personal loans.

Too often, customers are hesitant to ask questions out of fear that the lender will look down on them or that they will be wasting the lenders time. As a consumer, you need to prepare yourself with the proper information to make informed decisions. This is very important in the area of your finances.

If it is not clearly stated, find out the maximum amount the lender offers for personal loans. This way you can find out if the lender will even be able to meet your needs based on the amount of money you are looking for. Next, ask questions about the personal loan terms. This will help you determine if the payment is going to fit your monthly budget.

Most personal loans are decided within just a few days. Ask the lender what verifications you will need to provide as well as how soon they can have a decision after you provide all the necessary documentation. The verifications will vary but should include ID, income, tax returns, and a completed loan application.
Many personal loan lenders will push the loan rate at you, especially if they are offering one that is lower than the competition. However, you should ask them to show you exactly how much the loan is going to cost you. Lenders can give you an itemization of all fees of the loan. You will want the information to compare with other lenders information.

Don’t forget to ask the lender about prepayment. If possible, you will want to pay your loan off early to save on interest you pay over the life of the loan. Some lenders will charge you a payment for prepayment. If you plan to pay the loan off sooner than it matures, then do not work with a lender who requires prepayment penalties as part of the personal loan offer.

With security issues being so huge in our society, inquire how the lender will be using and securing your personal information. You want their guarantee that your name and personal information won’t be sold to other solicitors. If they do, expect to start getting telemarketing calls and lots of pre-approval offers in the mail. Most lenders will use encryption and a firewall for their computer storage of your personal information, but ask about it anyway. It is also a good idea to ask them how they inform customers if they feel security has been breached. Good lenders have such plans in place for your protection.

Taking the opportunity to ask questions from potential lenders before making a commitment to a personal loan takes time and effort. However, you will be glad you did. It is important that consumers arm themselves with the best possible information as this is the only way to make important decisions based on having the proper knowledge. I can’t tell you how many people have learned the hard way that asking questions makes a world of difference when it comes to financial issues.

Well, I hope that helps answer your question.

Regards,

The Money Guy

What Is The Average Price Of Life Insurance?

2008-10-10T08:36:00.000-07:00

Dear Money Guy,

After watching the devastating effects that a death can cause, I am very interested in setting up a financial safety net in case anything were to happen to me. My brother didn't have life insurance, and his wife and kids are left in a real bind (he was the sole breadwinner of the family).

So my question is, what is the average price of life insurance?

- Mark J.

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Dear Mark,

Sorry to hear about your brother's death and the hardship it will cause for your sister-in-law and family. Having life insurance can sure help in these type of situations. As for you question, "What is the average price of life insurance?" Well, that's a bit complicated.

You see, there are so many factors that go into determining the amount of premium you will be required to pay, that coming up with an "average" just doesn't work.

Here are some things to consider:

1. Term life insurance is less expensive than whole (permanent) life insurance.

2. Smokers have to pay more for their life insurance premiums.

3. The older you are, the higher your monthly premiums.

4. Whether or not you have pre-existing medical conditions can drastically affect your premium payments.

5. The greater the amount of coverage you need, the higher the premiums.

And the craziest thing about all of this, is that each life insurance company uses different factors to come up with their life insurance rates. So your best option is to get free life insurance quotes from a variety of insurance companies, and compare those quotes to each other.

To save you some time, I have found two life insurance companies that provide free quotes online. They just need some basic info from you to process your quote (name, email address, age, gender, etc).

Here are two life insurance companies I recommend getting quotes from to compare:

1. NetQuote

2. Mysurance

After you complete and receive your free quotes, you'll have a much better idea of what the average price of life insurance is for you specifically.

Regards,

The Money Guy

Mortgage How Much Can I Borrow

2008-10-06T18:35:00.000-07:00

Dear Money Guy,

Look, I'm no dummy. With the housing market in the dumper, now is the perfect time to buy a home. I have been a renter for far too long. Such a waste, really. But I was just never in the financial position to be able to buy real estate. Either my credit wasn't good enough, or I wasn't working at my job long enough to qualify for a loan program that would get me into a home. When it came to a mortgage, how much can I borrow never crossed my mind because I knew I didn't qualify for anything.

But that has changed over the last few years. I have stayed with the same employer for over five years, and am making more now than I ever have before. I also worked really hard on getting my credit score above 670 (thanks mostly to this product that I bought called Credit Secrets Bible).

I am ready to take advantage of this housing marketing and buy my first home.

My question: with a purchase mortgage, how much can I borrow?

I really need to know the answer to this question. I can't wait to start looking at homes.

- Peter N.

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Dear Peter,

You are absolutely correct. As a potential buyer, the housing market hasn't been this good in years. You're smart to try and take advantage of this opportunity.

Now to answer your question on the purchase mortgage, "How much can I borrow?"

Many lenders use a front end ratio to determine how much of a loan borrowers can get. The magic number is 28%. What this means is that lenders tend not to give loans where the monthly housing costs (mortgage payment, insurance, and taxes) is greater than 28% of the borrower's monthly income.

So if you are bring home $4000 in gross income each month, then your maximum housing costs cannot exceed $1120 per month (giving you roughly a $170,000 loan on a 30 year loan at 6%).

But honestly, the internet makes things so much simpler. By answering a short questionnaire, you can know exactly how much mortgage you can borrow. The great thing about these quotes is that they are free, quick, and can be done online at your convenience.

Here's a reliable lender that you have heard that provides this service:

You can do further research, but Lending Tree is unique in that they pass your information to a pool of mortgage companies (who compete for the ability to work with you). So by filling out this one online form, you can get a number of no-obligation free quotes at once.

Hope that helps. Good luck in house hunting!

Regards,

The Money Guy

Refinancing Mortgage Rate

2008-09-06T16:40:00.000-07:00

Dear Money Guy,

I bought my home a few years back when the real estate market was hot and interest rates were at 30 year lows. Oh yeah, at the advice of my mortgage broker, I got an adjustable rate mortgage.

This was great when I got it, but now it's killing me. I am not very skilled at mortgages and finance. Is a refinancing mortgage rate the same as a home purchase rate? Meaning, is it a totally different process to refinance a home as it is to purchase one?

I know I sound naive. But I really need to refinance my mortgage.

My question: what is the refinancing mortgage rate?

Thanks in advance for your answer.

- Paul C.

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Dear Paul,

Don't feel bad. Mortgages can be confusing even to those in the financing and real estate industries. That being said, the loan process for refinancing and purchase a basically the same.

Refinancing tends to have much fewer requirements because you are generally using the equity already established in the home to back up the mortgage.

Getting a purchase mortgage is much more riskier, and so there are many additional steps that are often bypassed in refinances (ie. work history, monthly income and expenses, down payments, etc).

There really is no "refinancing mortgage rate." The interest rate for the mortgage you will be getting will based off of a variety of factors including loan program, credit history, and how much equity you have built in the property.

The best way to know what your interest rate will be is to get a free quote. There are many mortgage companies that can provide you with a free and quicky online interest quote.

Here's one company that I recommend getting a FREE online quote from:

Although there is no refinancing mortgage rate, I really hope that you haven't paid out too much unnecessarily with the raise in your adjustable interest rate. Adjustable rate mortgages have hurt far too many individuals. Getting a fixed rate mortgage can stop the bleeding, and allow you to be able to save hundreds of dollars each month.

Regards,

The Money Guy

What Is The Average Price Of Life Insurance For Senior Citizens

2008-09-04T09:33:00.000-07:00

Dear Money Guy,

My wife and I are in our mid-sixties (in terms of age), and I hate to say it, but we don't have life insurance policies. I know that we should, and I am getting more and more worried about it. I asked my wife, "what is the average price of life insurance?" but she didn't know.

Going through death is difficult enough without having to be concerned with the financial disaster is causes. My wife means the world to me, and I want to make sure she has a good life if anything should ever happen to me.

Question: What is the average price of life insurance for senior citizens?

Looking forward to your response.

- William P.

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Hello William,

Don't let anyone tell you otherwise: it is never to late to get life insurance. Just the costs of a normal funeral can run between $3000 to $15,000. Ouch!

But that's nothing compared to the long term effect that death causes. If you are the only one bringing in income, death can be devastating to the loved ones you leave behind. Good job on finally getting some coverage.

What is the average price of life insurance for senior citizens?

Coming up with an "average" price is kind of difficult, but there are some things to keep in mind.

Being a senior citizen, your monthly premiums will be at the top of the scale. Why? Because there's a much greater chance of something happening to a person in their sixties, as opposed to a person in their twenties. Life insurance is a business based off of probability.

The greater the probability of something happening to you, the more in life insurance premiums you will pay. Factors like age, smoking habits, and pre-existing medical conditions can drastic influence what you'll pay each month.

Your best bet is to get a few free quotes from life insurance companies, and then compare against each other. Many times the insurance company can give you a quote instantly.

Here are two life insurance companies that provide you with free quotes online:

1. NetQuote

2. Mysurance

Once you get your quotes back, compare the financial payout you would get and the monthly premiums you are responsible for. You may be very surprised at the difference.

Regards,

The Money Guy

How Much Can I Borrow For A Mortgage?

2008-09-03T09:07:00.000-07:00

Dear Money Guy...

I am so damn sick of renting an apartment! Each month when I give my landlord the rent payment, my blood boils because I will never see that money again. I know that if I had my own home, that money will at least be building up some equity for future use. So my main goal right now is to buy a house.

But I have no idea how much I can borrow for a mortgage. I have rented my entire life (sad, I know), and have no idea how the home buying and mortgage process works. My credit is decent, I make about $50,000 per year, and my other bills come up to about $1000 a month.

My question: how much can I borrow for a mortgage?

Thanks in advance,

- Jason T.

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Jason,

Good to hear that you are thinking about purchasing your own home. Besides the financial benefits that you will get from being a homeowner, the emotional impact can be just a strong. I feel good knowing that my home is MINE.

How much can you borrow for a mortgage? Well, let me make some assumptions first. I am going to assume that you have been employed at the same place for over two years, have a good credit history, and can come up with 20% to put down on a home.

When it comes to determining how much of a mortgage you can borrow, most lenders calculate something called the front end ratio.

The front end ratio is the percentage of your income that will be used for your monthly house payment (principal, interest, escrow, insurance, etc). Most mortgage companies will cap this percentage at 28% of your pre-tax income.

What this means to you?

If your salary is $50,000 gross a year, then that means that you are making $4166.67 per month. By using the front end ratio (28%), you should be able to get a loan whose monthly payment is $1166.67.

Now, how much the total loan size will be will be dependent on the interest rate that you get. So let's say that you get an 30 year loan with an 6.0% interest rate. The total amount of mortgage that you can get is just over $194,000.

Some things to consider: I didn't include property taxes or homeowners insurance into the calculation. So please keep that in mind when determining the max amount you can borrow.

The best way to answer the question "How much can I borrow for a mortgage?" is to fill out a free, no obligation quote with a mortgage company.

Here's one company that can give you an accurate answer :

Once you get the quote back from them, you'll know exactly how much house you can get. A lot of people start looking for homes BEFORE they research how much they can realistically borrow. I wouldn't recommend doing this because generally people find that they can get much less how than they initially thought.

So all that time looking at houses (that they can't even afford) is wasted. Find out how much of a mortgage you can get FIRST, and then go house hunting. If you get a pre-qualification or pre-approval letter from the lender, even better.

Regards,

The Money Guy

I Need A Payday Loan Immediately

2008-09-01T16:03:00.000-07:00

Dear Money Guy,

Holy crap I'm in a heap of trouble!! I think I need a payday loan immediately! My landlord wants about $500 in his hand by tomorrow from me, or he's going to evict me from my apartment. I have worn out my welcome with my friends and family, so borrowing it from one of them is out of the question.

I was searching online for some possible solution when I came across an advertisement for payday loans. From what I understand, they will lend you the money now, and take it right out of your checking account when you get paid next. I have a job, so that's not the problem.

My issue is that I need the payday loan right now. Not a week. Not even a few days. I need the money by tomorrow.

So my question is: I need a payday loan IMMEDIATELY, will the payday loan companies be able to make that happen?

- Kent L.

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Dear Kent,

I feel for you, brother. I have been in a couple of those financial nightmares in the past, and I vividly remember how scared I felt (especially at the prospect of losing your home). Payday loans may be able to get you through this rough patch.

Can you get a payday loan "immediately"? No, not immediately. Although you are in a hurry to get some money, they are still a financial institution that needs to verify that they will get their investment back.

That being said, there are a few payday loans that specialize in getting your loan approved and cash in your hand in under 24 hours. I have listed three payday loan companies that provide this speedy service.

1. PayCheckToday.com

2. Secure Money Store

3. Team Quick Cash

Using one of these companies should get you past this incident. But do yourself a favor: start saving for an emergency cash fund that you can use the next time an unexpected crisis occurs (and you are not sitting there with your head in your hands thinking, "I need a payday loan immediately to get me out of this jam").

Regards,

The Money Guy

Hard Money Loans In Chicago

2008-09-01T08:22:00.000-07:00

Dear Money Guy,

Man, I'm in a true cash crunch. I need about $1000 as soon as possible. One of my friends told me about a company that does hard money loans in Chicago (I live just outside of the city). But when I think of "hard money," I think of loan sharks and broken legs for not paying on time. Is it still like that?

Should I even contact those companies that offer hard money loans in Chicago?

- Randall M.

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Hey Randall,

Although hard money lenders face much more regulation nowadays, it's still not an option to be used unless it was the absolute last resort. So no, I don't think that you should consider getting a hard money loan in Chicago (or in any city for that matter).

The potential risks associated with hard money loans would not be your best option. Besides the incredibly high interest rates and the excess points on the loan, the speed at which you can find your owing more and more if you don't pay the loan back in time is truly frightening (and perfectly legal).

If all you need to come up with is $1000, a much better option for you would be getting a payday loan. These are easy to qualify for, can happen online, and you can have your money in as little as 24 hours. And because of the way they set up the loan, it's much less likely that you will default on it (and end up paying unnecessary fees).

Here are three payday loan companies that I recommend to my readers:

1. PayCheckToday.com

2. Secure Money Store

3. Team Quick Cash

Hard money loans in Chicago? No, you are placing yourself at risk for no reason. To get a quick $1000, I'd recommend getting a payday loan. It accomplishes what you need to happen, without the incredible risk associated with hard money loans.

Regards,

The Money Guy

Loans for African American Women

2008-08-31T22:47:00.000-07:00

Dear Money Guy,

I am a young African American woman who will be thinking about purchasing a home in the very near future. I can use all the help I can get, and a family friend mentioned the possibilities of special loans for African American women. Owning my own home has been a dream of mine for years. It's there are resources available to better my chances, I'd like to know about them.

So my question is, are there any loans for African American women?

- Rhonda P.

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Hey Rhonda,

Because of laws protecting minorties, the elderly, the handicapped, etc, you can't set up loans for African American women only. And this is a good thing: a financial decision like a home loan should be based on hard numbers, and not the particular race or creed of the borrower (be it white, black, or any color in between).

If you do happen to see loan products where you need to be a particular race to qualify for it (ie. loans for African American women), I would stay far away from them because they are already violating certain laws.

So who can provide loans for African American women?

One company that I recommend is LendingTree. What they do that's different than other mortgage companies is let finance companies compete with each other to provide you with the best loan terms.

This works out great for borrowers because this competition results in loans with better rates and terms than normal.

Try them out for yourself, no obligation of course. Whether you are looking to get a new loan to purchase a house, or curious about whether you can refinance into a better loan situations, you owe to yourself to spend a few minutes at LendingTree.

You can visit them here:

Loans for American American women is just not an option. But that doesn't mean that there aren't good loan opporunities available. You just got to know where to look.

Regards,

The Money Guy

Easy Ways to Improve Your Credit Score

2007-11-07T08:39:00.000-08:00

One of the most important things when it comes to getting a loan for a house or a car is our credit scores. Most lenders will check with the credit agencies and see what your credit score is before they approve or deny you a loan. You must be proactive when it comes to your credit score and it is up to you to make sure that all items on your report are accurate. There are some fast and easy things that you can do to always make sure that you maintain a high credit score.

The first thing that you need to do is to get a free copy of your credit report form all three major reporting agencies. They are required to give you a free copy once a year so make sure that you take advantage of this before you spend money to get your report.

Next you need to go through the report and check for accuracy because if there are items you do not agree with being reported then you must dispute these items with the agency. The agency after they get your dispute has 30 days to verify if the items is accurate or not. If they can not verify it within 30 days then by law it must be removed from your credit report.

Also it is most important that you always pay your credit card bills on time and this will help raise your credit score as well. One other great way to improve your credit score is to keep low balances on your credit cards. Many people charge up there balances too high and this will cause your score to be lower.

Find Free : Debt Relief Today
Tips to Improve: Credit Score

Bryan Burbank is an expert in the field of Finance and Debt Relief

How Does Debt Consolidation Work? The Plain Truth!

2007-11-07T07:58:00.000-08:00

There is nothing worse than being strapped for cash and finding that your debts are continuing to mount. What starts off as a reasonably small sum, increases constantly due to the high cost of interest in today's financial market. It may be that when you originally borrowed you felt you would be able to pay it back, but your situation has changed, and the economy has changed. Now you have multiple debts, and less hope of paying them back. This is when debt consolidation can be an extremely helpful debt removal tool.

Debt consolidation is usually the penultimate step in your financial management. It is to be considered, and made, when the only other option is to file for bankruptcy. Although your credit rating will still be low after debt consolidation and so you will need to do some work to re-establish a good credit rating. However, debt consolidation looks better then bankruptcy. So how does debt consolidation work?

Debt consolidation companies will take a look at all of your individual debts. They may get in touch with the individual companies to attempt to lower your interest rates. After seeing how much money will be required to cancel these debts, they will offer it as a loan, at a lower interest rate then the money that you will be paying for the debts individually.

Now, you will only be making one lower monthly payment, to the debt consolidation company. It will ensure that all your debts are paid, and that you will be paying a lower amount each month, making your debt more bearable. As this is a long term this could mean that you pay more money overall than you would have had to pay for your debts, but this is a debt that you should be able to keep up on the repayments of.
It is also important to note that most good debt consolidation agencies will also provide you with credit counseling. The counseling is designed to ensure that you do not make poor credit decisions in the future, and so do not have to take that action again.

Highly recommended reading:
How Does Debt Consolidation Work?
Example of How Debt Consolidation Companies Work
A free guide to successful debt consolidation. How to get debt free in no time.

One of the Biggest Mistakes That Can Be Made While Consolidating Your Debt

2007-11-07T07:43:00.000-08:00

Debt consolidation basically requires taking out a loan to pay off many other debts.
This is often done to secure a lower interest rate, secure a fixed interest rate or just to get all your outstanding debt rolled into one monthly payment with only one loan to service.

Consolidating debt is taking a number of unsecured loans and/or debts and combing them into another unsecured loan. Most of the time it is actually rolled into a loan which has been secured by an asset that serves as collateral, such as a home, ( a mortgage).

By securing a loan with an asset it gives you an advantage to receive a lower interest rate, but because the loan is secured the owner of the property that is being used for collateral, agrees to allow a forced sale (which is known as foreclosure) of the asset in order to pay back the outstanding debt if the property owner fails to make payments as agreed upon.

Because the loan is secured the risk to the lender is reduced. Which allows for the lender to offer a lower interest rate.

Usually debt consolidation is advised mostly for credit card debt. Credit cards usually carry a much greater interest rate than even an unsecured loan. Taking all the credit card debt that is carrying a much higher interest rate, which usually generates a much higher monthly payment, and rolling them into a loan which is secured by property such as a house or a car, the total interest and payment will be much lower. This will allow you to pay off the debt much quicker, incurring less interest.

One of the biggest mistakes that can be made while consolidating your debt, is if you continue with old habits and incur credit card balances again. You will find yourself deeper in debt, but this time you might not have the ability to make both payments, falling behind on your loan payment and being at risk of losing the property that you have secured your loan with.

Before consolidating your debt with a secured loan, research other ways you might be able to consolidate your unsecured debt, never put your property on the line unless it is absolutely necessary. Research this and make your decision wisely.

Remember there are many other ways to consolidate and/or eliminate debt without having to secure a loan using your property and risk losing it !!!Sometimes, debt consolidation companies can discount the amount of your loan. When the debtor faces any possibility of bankruptcy, a loan consolidator will buy the loan at a discount. But be careful, this type of consolidation can affect your ability to discharge debts in bankruptcy.

It's Time to educate yourself, Get Out of Debt and Increase your Net worth. Many opportunities are available, both online and offline for you to help increase your income for you to get back on your feet or use for wealth building purposes. Cut up your credit cards and stop using your credit to fall into debt. Create your own money to buy the things you desire, instead of falling into debt. Visit http://www.aroadtoriches.com to educate yourself and learn the opportunities available to you.

How to Best Use Your Debt Consolidation Opportunities

2007-11-07T07:25:00.000-08:00

Sometimes, even when we try our best to manage our finances, debt problems can get in the way. Unexpected circumstances such as sickness, loss of job, divorce, or business failure can quickly put us in a bad debt situation. However, being in debt doesn't have to be a hopeless situation. In this article, we'll discuss how you can flee from debt through different types of consolidation.

Credit Counseling

Some credit counseling agencies would recommend a debt consolidation program for consumers with extreme debts. Finding a reliable credit counseling agency should give you the assistance you need in handling your debt problem. An experienced credit counselor should give practical and efficient advice on how you can create a repayment plan, avoid incurring new debts, and prioritize your repayment.

Debt Consolidation Loan

One way to consolidate debts is by obtaining a loan. The money loaned would be used to pay all your existing debts from different creditors. In turn, you'll be subjected with only one lender - your debt consolidation company. Thus, the stress and pressure of dealing with different creditors is instantly eliminated. Furthermore, by consolidating debts into a single account, you won't have to pay multiple interest rates so you can save more and use the money for repayment.

Debt Repayment Representative

A debt repayment agency can negotiate with your lenders to reduce your debts and modify your payment terms. Each month, you'll submit your payments to your debt repayment agency- who in turn, would distribute your payments to the appropriate lenders. Nevertheless, it's very important to make sure that you're dealing with a reliable company and that all your payments are submitted accordingly.

Credit Repair Clinics

Watch out for agencies or even non-profit groups who promise to give an instant "fix" or instant "repair" to your debt problems. Remember that the only way you can get over your debt problem is by paying off your debts. If the charges in your account are accurate, there's no way an agency can erase or delete these charges from your credit report. Even worse, these agencies who disguise themselves as "credit repair groups" may use your personal information against you.

Debt Settlement

A credit counseling agency may also negotiate with your creditors through debt settlement. Debt settlement can reduce your debts from 50% to 60% or even more. However, if your creditor agrees with a settlement, you are expected to submit your payment in full at the soonest possible time.

Andrea Smith is a writer and consultant with Consolidate4Free.com and has been providing consumers and business owners with Free Debt Consolidation Advice since 1990. For years she has helped people with loan and credit problems especially pertaining to Debt Consolidation and Credit Card Debt Consolidation. Copyright 2008.