Unsecured Debt Consolidation

Many who struggle with debt look for any way out they can. If you find yourself in debt, stop to consider what options are available to you and consider visiting a credit counselor to help you decide the right decision for you.

One possible solution to debt is a debt consolidation loan. This loan will either be secured with some type of property as collateral: your house, your car, a bank CD, etc. or it will be unsecured. Secured loans are risky on your part because if you default on the loan you will most likely lose whatever the loan is based on.

Unsecured loans are not based on anything you own, so you are a higher risk to the lending institution. They will give you a higher interest rate because of the higher risk. Also, if you have struggled with paying your bills on time, you will have a lower credit rating which will also increase the interest rate on your unsecured loan. This unsecured debt consolidation loan will allow you to pay off your credit card and other debt. However, the interest rate on the new debt may or may not be better than on the old debt. An unsecured debt consolidation loan might end up requiring you to pay more in the long run than other options.

Also, if you have high debt or low credit, you may have substantial difficulty gaining approval for a loan. Some lenders may be leery of granting you even more credit than you already have.

A way to achieve debt consolidation when an unsecured debt consolidation loan is not an option is to sign up for a debt management plan. Debt management plans allow you to pay your debts each month in one bill, but you keep the original accounts. The debt management company will insure that each company is paid from the money you give them. They will also work with those companies to lower the fees you owe so that more of your money will go to paying off your actual debt. Most people that qualify find that they are able to pay off their debt in as little as three to five years.

Be careful when choosing which debt consolidation plan is right for you. You do not want to end up with a loan or plan that will hurt you.

Credit Card Rates

In the world of credit cards, there is so much to know. And if you aren't in the business, it can seem overwhelming at times. Whether you are considering applying for your first credit card or educating yourself in hopes of re-building a broken credit history, this is where you need to be. This article will explain credit card rates and how to navigate the credit card world.

The first set of jargon used when it comes to credit card rates are low interest and apr or annual percentage rate. These terms apply to the interest you'll be charged on your card for use. They signify what percentage of your credit card balance will be tacked onto your bill as interest; the amount the company gets for allowing you to use their card. When looking at interest rates, try to find a card with an apr around 9.9%.

Another thing to consider when it comes to credit card rates are fees. Some cards will charge an annual fee. These fees can be quite steep. Try to find a card with no annual fee. And make sure you read the fine print, as many cards will advertise no annual fee, but that will only apply for the first six months, etc. These companies may advertise credit card deals, but it's up to you to get the whole picture.

Other types of fees that you need to be aware of when shopping for good credit card rates are balance transfer fees, cash advance fees, late payment fees, over-limit fees and credit limit increase fees. So many fees! This is why it is so important to put in the study time. Consider each credit card application, whether by mail on online, to learn what all the fees are before you apply for or receive your card. That way you'll always know where your money is going.

As you can see, finding the right credit card is not as easy as some people think. When it comes to credit card rates, you really can't be too careful. If the applications you've been receiving by mail are questionable or if you just aren't receiving offers for the kinds of cards you'd like to apply for, consider shopping online. When you look for a card online, you are able to compare all the credit cards available. And if you like what you see, you can fill out an online credit card application. All the big companies such as visa and american express offer this option.

Flat rates and Average rates - How to get the best interest rate on Personal Loans in India Padma, an upwardly mobile telecom executive, took a person

Padma, an upwardly mobile telecom executive, took a personal loan of Rs one lakh at a flat interest rate of 11 percent for 36 months to buy a plasma television. Pretty lucky, she thought, to land on this rate when even home loan rates are riding at 13 to 16 percent.

But did she really manage to get it so cheap?

She was yet another customer who got carried away by a rate of interest that does not reflect the actual cost of her loan.

Padma actually would be paying an interest of 20 per cent per annum on a reducing balance basis instead of the 11% that she thought she was paying. Here’s how

With an EMI of Rs 3700, her total payout over 3 years is Rs. 1,33,200 Therefore the total interest paid is Rs. 33,200 (Rs. 1,33,200 less loan amount of Rs. 1,00,000). As the loan period is 3 years the interest payout for one year is Rs. 11,000 approximately, which is 11% of the original loan amount of Rs. 1,00,000/-. This is how the flat rate of 11% is calculated.

This calculation at 11% would have been perfectly ok if she had paid the entire amount of Rs. 1,33,200 at the end of 3 years in one shot. But in actual practice, she is required to pay a monthly installment of Rs. 3,700 for 36 months. Which means with every payment the principal amount of the loan should keep coming down (this is called the reducing balance method of interest calculation or the effective rate of interest)

Flat rate never reflects the actual cost of the loan. The only reason a lender ever quotes a flat rate is because he is ashamed to tell you the effective rate of interest which is very high. UNLESS YOU ARE DESPERATE STAY AWAY FROM A LENDER WHO QUOTES A FLAR RATE ON INTEREST. Even if you are desperate, at least, find out the effective cost of the loan before agreeing to take it. You can use the calculator available by clicking on this link for this purpose.

How to get the best interest rate on personal loans

Flat Rate is humbug

TIP #1: If the lender is offering you a flat rate of interest, avoid it as it never reflects the actual cost of your loan. Always go in for a loan with interest on reducing rate (IRR) where you will be charged only on the balance outstanding. Anything not in writing is worth nothing

Negotiate, and then negotiate some more

TIP #2: Negotiate on the interest rate, processing fees and prepayment penalty with at least three or four lenders. Get all commitments in writing. Discounts on processing fees and prepayment penalties are possible especially if you have salary account in the bank or are using their credit card. So negotiate hard on this.

No upper limit for interest rates, so negotiate hard

TIP #3: Remember banks only have a minimum interest rate that any consumer must pay and the maximum interest rate cap is fairly high. The loan salesmen or DSAs are required to sell loans at a minimum weighted average rate of interest for the money disbursed through them. So they have a natural bias to push customers to higher interest rates to meet their targets. This sometimes inflicts different interest rates for professionals in the same company with similar employee profiles. Be smart and savvy. Don’t be the guy who pays the highest rate but be the guy who pays the lowest rate.

Interest rates vary

TIP #4: Banks have a clutch of varying interest rates, depending on whether the consumer is salaried or self employed. Personal and occupation profiles are also closely scrutinized. Among the salaried, the top ten companies will have lower rates of interest. Employees within each company will have different rates depending on salaries, personal profiles and credit history.

Self employed professionals like doctors and chartered Accountants get much lower rates of interest as compared to self employed non-professional who have to pay a higher rate of interest due to the perceived risk involved in lending to such consumers. So negotiate to get the lowest possible rates for the category you may fall under.

Submit all relevant papers

TIP #5: One must keep in mind that until documents are submitted to the bank, it is most unlikely that a bank would offer its best possible quote. The so-called pre-approved loans are often at a rate that is much higher than what the bank might be willing to live with.

Higher the risk, higher the interest rate

Tip# 6: Personal Loan is an unsecured loan, where the consumer provides no collateral to secure the money. It is often a short term loan sanctioned on the basis of your income and personal networth as a salaried employee or self employed professional.

Due to the higher risks involved, the interest on this product could range anywhere between 14 per cent to 35 percent. It will depend upon the type of consumer and the tenure of the loan. Banks also tend to keep a band of rates, giving customers exotic variations. But it is better to stick to a plain vanilla loan where the interest is calculated on the reducing balance.

Don’t get carried away by a flat rate of interest. Always opt for a loan where interest is calculated on the reducing balance.

Get all commitments on paper.

Banks have a band of rates. Find out which band you fall under and negotiate hard to get the lowest rate

Submit all the relevant documents, only then can you get the best quote from the bank.

No Teletrack Loans - No Credit Check Required

When emergency arises, people with poor credit score are still eligible to apply for no teletrack loans from payday lending companies. The loans do not require any form of credit check as they are secured against your next pay. As long as you can prove that you earn sufficient amount of money to pay back the loan chances are you will be approved for cash advance loan easily.

No teletrack loans are short-term payday loans for the period up to four weeks. They are usually taken to meet emergency cash requirement for the amount between $100 and $1000. Traditional loan institutions generally use teletrack to investigate borrower's financial history including bankruptcy record, installment loans and even credit score. Most payday lending companies bypass this requirement as they do not consider borrower's financial record as the main qualification for approval.

Bad Credit No Worry

People who opt for payday loans do so as they need financial help urgently and do not wait for complicated paperwork that otherwise they will have to fill in if they apply a loan from banks. The other reason is that they may have a bad credit rating which could cause banks to refuse their application. If they have no relatives or friends who are able to lend some money then it becomes make sense for them to apply for a quick cash loan.

How to Apply

The easiest way to get a payday loan these days is by applying online. There are many lenders who operate online in the Internet. When you search online make sure that the companies do not use teletrack, which can be found on their website. If you hesitate you can contact them directly via email or phone.

Once you make a decision as to which company you want to take the loan from, you simply complete the online application form with details of your name, address, contact numbers, employer, bank account, references, etc. It takes less than 5 minutes to do all of that and your application will be processed immediately. You may have to wait for several hours to get a feedback as to whether your application is approved. Once approved, the cash is deposited into your bank account in the same day.

Help When Needed

Payday loans with no teletrack can become a real help when you are in a bind and need cash urgently. It is very common for people who live from paycheck to paycheck to experience temporary money problem. With no credit check required, this alternative resource can help you get the cash remedy until your payday.

Choosing the Right Debt Consolidation Company

Millions of Americans are in debt. They have outstanding credit card bills, mortgage payments, car payments, student loan payments, and other personal debts. For many of those people in debt, they are unable to meet the current minimum payments in order to pay off their debts. Are you in this situation? If so, perhaps debt consolidation is a viable option for you.

Debt consolidation companies can help you lower your monthly payments so that you can pay off your debt. All you have to do is provide the debt consolidation company with an accurate list of all of your debts and creditors. Then, your debt consolidation company will do all of the work. They will contact your creditors and negotiate a settlement figure. Once all of your debts have been settled, the debt consolidation company will then merge all of those debts into one so that you will only have one manageable monthly payment.

When you are looking for a debt consolidation company, take the proper time to shop around. There are many debt consolidation companies around. Do not settle for the first company you find in the phone book or on the Internet. Many companies offer excellent deals, so do take the time to investigate several different debt consolidation companies.

You will want to make sure that the debt consolidation company is reputable. If the debt consolidation company has not been in business for at least a year, do not consider doing business with that company. Chances are that this company will not be around because more up to 90% of all businesses fail in the first year. Instead, look for a company with an established reputation.

Once you have the names of several debt consolidation companies, check their standing with the Better Business Bureau. If there is even one single complaint, do not use this company. If there is no information about that company, keep investigating. Do an online search for information about this company. If you still can find no information about the company's reputation, do not use that company. Your personal credit is not worth the risk.

Be leery if a debt consolidation company offers you a quote without all of your credit information. It is impossible to have an accurate accounting of your financial status without the raw data. Companies that offer quick quotes do not have your best interest at heart. They are more interested in getting your money than they are in helping you consolidate your debt. If you work with this company, you will soon find that your quote was not accurate and you will be paying more than you were led to believe.

When looking for a debt consolidation company, take the time to do your homework. When you are able to make an informed decision, you will most certainly find the best debt consolidation for your financial needs.