Debt Debt Management in Texas Is Not What You Think - It Could be Better! Managing overwhelming debt is a more common problem than most people think. Unfortunately, people coping with large amounts of debt in many cases are unacquainted with most of the options they've or, worse, think of all debt solutions (from debt settlement to debt management to bankruptcy to debt consolidation) as just about the exact same thing. They're not. Debt consolidation is a totally different way of debt than all the methods. Debt consolidation isn't right for everybody and not anyone can qualify for it. But for the right people in the proper situations, debt consolidation could be definitely the best approach to getting out from under large levels of debt ... without hurting your credit! Unlike bankruptcy, you may not want to get a judge involved and file legal paperwork to consolidate debt. Unlike debt management, you do not desire a counselor or agent to behave on your behalf. And unlike most plans of debt relief, debt consolidation done correctly will not hurt your credit score or your financial reputation. Of course, debt consolidation isn't for everyone. Financial woes have a method of being unique, and every single person or family facing mounting debts has a lot of special factors that come into play. Financial plans designed to greatly help people cope with debt can never be looked at as one-sizefits-all. Besides that, not everybody (even those who want and need it) can qualify for debt consolidation. Basically, debt consolidation is a way of rolling many debts together, taking out another loan to cover them off, and then managing the consolidated debt. In other words, you sign up for a large loan, put it to use to cover off all of your charge cards and other debts, and then pay off the big loan. This sounds counter-intuitive. For anyone already saddled with debt, the very thought of adding another debt might be terrifying! And how do adding an additional colossal debt to the mixture allow you to?
The solution is not that you will be simply getting another loan, it's really a way of re-organizing or
re-structuring your debts. For instance, let's say you have seven credit cards. You're maxed out on three and your debt differing amounts on the other four. Altogether, your debt $82,000 on credit cards. Now let's say that there surely is $22,000 in car notes and another $4,000 on a revolving plan from the furniture store and the full total debt adds around $104,000. Which could sound high for some people, but it's really not all that unusual! Now consider the interest rates on those loans. This could take some detective work, but that information should be around in your monthly statements. If it is not or you can't think it is (or figure out what they're talking about), call the toll-free customer service number most such companies have and discuss the loan with them. You want to know the interest rate, that will be the percentage of the total loan the business charges you for the privilege of borrowing its money. You will probably find that interest rates are all around the map. Department store credit cards are traditionally pretty high (22% isn't unheard of). Other credit cards span quite a broad range (16% to 20% is pretty normal). An in-store loan for furniture is likely high (22% is typical) but the automobile note may be half that (10% to 12%...again, these vary widely). When you have debt, you are paying not just the specific amount you borrowed, you're also paying interest. Interest is the dirty little secret of debt as it keeps accruing, day after day after day. The longer you try pay your loan, the more interest you'll pay. In fact, for good enough to pay off a highinterest loan, you are able to wind up paying more in interest compared to loan Pay off Credit Card Debt Texas itself!! Think of sales tax. Within Texas, where I live, we pay 8.25%. That seems high if you ask me, and most of my fellow Texans will agree. But many interest rates on charge cards is double that-over 16%. Imagine paying double sales tax! That's how interest really can add up. Coming back to our example, you borrowed from $104,000 at many different interest rates. What if you have access to a loan for $104,000 at, say, 12%. Would that produce sense? At this point you swap out your many smaller loans for one giant loan at a much lower interest rate. But let's consider the car note. If you're paying 12% or less interest on that, it wouldn't make sense to pay it off and then take out a fresh loan at the exact same or more interest! Can you actually find lower interest rates? A whole lot depends how low you need to go, how good your credit is, and a great many other factors. A big plus in debt consolidation is home ownership. If you possess your personal home, you may well be able to acquire a home equity loan or refinance the mortgage in such a way as you are able to extract money from your house to pay for off your debts. A mortgage company, banker, or debt consolidation professional can assist you to determine if that works. If you do not own your own personal home, do not give up. Debt consolidation can still be possible using a line of credit (a kind of unsecured loan obtained by way of a bank, credit union, or financial institution). It's also possible to be able to borrow money using something else of value (a 401(k) account, stock account, property) as collateral. If you have collateral, it's easier to get a loan and you'll likely do have more clout in getting lower interest rates. That's because collateral means lower risk to the lender. If you place up your retirement account as collateral for a loan, the lender has the right to take funds from your retirement account to cover off the loan. It is tough to create broad statements about debt consolidation, but you're a decent candidate when you have a miserable level of debt and at the least two of these things is true about you: (a) you own
your personal home, even when it's mortgaged, (b) you've a lot of debt at interest rates around 20% or more, (c) you've good credit.