Credit Counseling Vs. Debt Settlement

Credit counseling or debt settlement? While naturally Franklin Debt Relief is inclined to argue on behalf of debt settlement over credit counseling, we also recognize that it’s impossible to declare which program is better because it depends on a number of variables that differ from individual to individual. The purpose of this article is break down which factors you should consider before choosing the appropriate option.

1. What can you afford? Credit counseling programs tend to be a lot more expensive than debt settlement programs. The reason is simple: credit counseling only produces results on the interest rates, whereas debt settlement is able to actually negotiate the amount you owe. Simply put, if you are in a true financial bind, then the clear choice for you should be debt settlement, and on a pure “money saved” basis, debt settlement will almost always be the answer. Although this is undoubtedly an important factor, it is not the only variable to consider before making a decision on which program is best for you.

2. What sort of credit impact can you tolerate? Some credit counselors out there will undoubtedly tout that their program doesn’t affect your credit score negatively. This is a play on words. Sure, your score won’t drop, but ask any lender what the impact is to your loan application. Let me save you some time---it’s devastating. That being said, debt settlement is no better for your credit, and lenders in general definitely do not like seeing debtors seeking outside help for their financial situation. On the flip side, they definitely do not like seeing the past due marks from enrolling in a settlement program. So let’s consider this example: Four years ago, John decided to use credit counseling, and Mary decided to follow the debt settlement path. They both have the same income and expenses, and they both apply for a $200,000 mortgage. Who is more likely to get it---John, who is 1 year away from completing his credit counseling program, or Mary, who finished her debt settlement program 1 year and half ago and has since been rebuilding her credit? While this may vary from lender to lender, in general Mary would be considered the better loan applicant. What if John paid a lot per month and they both finished their respective programs in the same amount of time? By itself, the credit counseling program would be better for your credit, but when you factor in the fact that Mary would probably have more savings to contribute to a down payment, she’d still probably be considered the better loan applicant. Do I think this is fair? Not at all. It’s ridiculous that lenders are so harsh on clients of credit counseling programs. Unfortunately, the system is flawed, but until there are adjustments made to correct it, debt settlement clients will be in a more favorable position to obtain new credit upon completion of their program.

3. Who do you owe? So you can save more money in debt settlement, but not always. If you owe a more aggressive creditor like Citibank, then it’s possible that credit counseling or bankruptcy may be a better option for you. The reason: Citibank not only tends to settle for more on average, but they are also more likely to pursue legal action to collect a debt. Although under most circumstances debt settlement is still successful with these creditors, it is a much riskier undertaking when you’re dealing with Citibank. If you cannot afford credit counseling and your debt is exclusively with Citibank, then unfortunately you’re probably better off filing bankruptcy.

4. What is your personality type? I’ve read just about every article online regarding credit counseling versus debt settlement, and I’m amazed by how most finance authors eliminate the human element from this discussion. The bottom line: debt settlement is not for the faint-hearted. There is no guarantee that everything will work out completely as planned. Some settlements may be higher than estimated. Some settlements may be lower than estimated. You will inevitably get some creditor calls.

This is the nature of the program, and you must be willing to accept some level of uncertainty before enrolling. I organized the following 4 questions in this order on purpose. After all, if you can’t afford credit counseling, then it’s pretty much out of the picture as an option for you anyway. I don’t mean to sound overly cynical, but we live in a material world and issues like having an anxious personality must be sacrificed when you don’t have the money necessary to freely exercise this aspect of your character. On the flip side, if you have 100% Citibank debt, it would be foolish for you to choose debt settlement over credit counseling or bankruptcy just because you fancy yourself a risk-taker. There are countless other variables that influence whether debt settlement or credit counseling is appropriate for you (i.e. what state you live in, your income source, etc.). Your best bet is to discuss your individual situation with someone knowledgeable in these arenas.

The Painful ‘Death-Like’ Experience Called ‘Divorce’…And How It Can Effect Credit Ratings

If one of the primary reasons for a split emanated from excess debt and credit challenges then there may not be a lot of cash floating around to effect a quick settlement. Additional complications may flow from a foreclosure and/or bankruptcies where one party may not want to stay around for the rebuilding phase. It could drag on for a while, as there is not enough money to pay the lawyers. Time kills credit ratings in an emotionally charged atmosphere where an otherwise ‘normal’ person takes on a new persona. The game evolves into a pushing game of resistance and tugging with plenty of blame flying around. If the shoe is dropping, each party needs to take action to protect their respective futures. We will assume that all attempts at reconciliation and marital counseling have been exhausted.Whether the split is amiable or not it will be necessary to take a quick inventory of the financial assets. This will include any real estate held, automobiles, personal property, toys, credit cards, installment debt, mortgages, utility bills, cell phones, water, sewer, trash, electric, 401(k)’s, IRAs, stocks, mutual funds, bonds, insurance coverage and a multitude of other things intertwined into what was a marriage. Collateralized debts such as houses and cars will need the payments to be maintained or the lender will pick them up or repossess them. Utilities will need to be maintained or they will be shut off. Cash accounts being cleaned out by one or both of the spouses will tax and stress an already tense situation. A budget for two residences, assuming there is a separation, will be necessary putting further stress and strain on the crumbling relationship and financial resources. This process may proceed and play out like the movie with Danny DeVito and Bette Midler in “Ruthless People” or the movie “War Of The Roses” with Michael Douglas and Kathleen Turner or even the movie “The First Wives Club” where revenge and getting even or ahead is the common thread. Everyone has been touched by divorce somewhere in their family or a circle of friends or acquaintances. It’s not close to being funny when one is living the nightmare. Some of these real life situations have ended tragically. This is not a movie. It’s the real deal, no popcorn served here. When cooler heads prevail, there are some elemental steps that will help each spouse and their financial futures.With an inventory completed of the financial and asset side of the marital property the credit cards need to be acted on immediately. Any jointly held cards should be frozen immediately with no further charges allowed by either party. Individual cards can be maintained, but may now be flagged to require an exact signature to be accepted. Debit cards will need to be cancelled on joint accounts. If children are involved it makes for a higher degree of emotional tug of war. Each party needs to pull the free annual credit report from the three credit reporting agencies which includes, Experian, Trans Union and Equifax to take a snap shot of their credit report and status of all accounts as of that date. If the parties are talking, efforts can be made to divide up the assets and handle the marital home and support issues, if any, with a calm and rational approach. If attorneys are engaged at the outset it’s important not to abdicate full responsibility for one’s credit health by keeping an early eye on the ball. If there is a property settlement where the husband or wife is directed to make payments of this or that it will still effect both parties IF it is jointly held credit. Non-payment will injure the other party if the court ordered divorce decree and/or maintenance is not followed. Depending on how the settlement unfolds, as soon as possible the mortgage needs to be put in one or the others name along with the deed changes. This is accomplished by paying off the old mortgage with a new one. If the existing mortgage is late it will adversely pull down both credit scores. With mortgage lates, neither party will be able map out a credit recovery plan. Cars with joint liens need to be sold or traded to get the other spouse off the title and lien. It’s important to note that personal or real property liens trump any divorce settlement. If payments are not made the credit is adversely effected. For some splitting couples, selling the house, filing bankruptcy, moving to other job locations is their only resolution. Two income households now become one. Changes have to be made. Once the assets and liabilities are sorted out with a plan of division and support are in place then a proper course of action can be set. A good Family Law Practitioner is an important piece of the resolution of the split. Everyone has heard of many a gut wrenching, traumatized, stress max divorce. Going through this wringer is an emotional grinder. If the spitting parties can focus on doing a fair split while preserving their financial positions then each of their credit histories can be shored up to begin the rest of their respective lives. Whether it is refinancing the homestead mortgage to buy out one of the spouses equity, or dividing the cash up and other assets and split the credit cards debts the parties give themselves an opportunity to move on to a new life. Otherwise financial ruin for 7 to 10 years may be guaranteed through a mortgage foreclosure or bankruptcy becomes the end game. Counseling can help set the stage for reconciliation or that dreaded phrase “Irreconcilable Deference’s” can lead to an amiable splitting and allocation of the marital assets. There are so many nuances to this division and moving on. There are infinite combinations of factors that come into play. Again a good Family Law Practitioner can be helpful, BUT each party must be focused on their own financial credit health and must be proactive in the protection of their credit histories and how that may play out in the divorce settlement. Each needs to determine all the facts and bring in whatever assistance necessary to help in that endeavor. Every effected party has an opportunity to set the tone of how things proceed, assuming all other things being equal. It’s either that or the battle royal with pounds of flesh extracted from each donor. Divorce can be a “Death Like” experience. For many divorce participants it defines them the rest of their lives, for others it’s just the beginning of the rest of their lives. Maintaining one’s credit history can pave the way to the future. It takes proactive planning to make it happen. Ignore it at their peril.

Research finds credit card repayments up in 2007

Credit card spending and record levels of consumer debt have blighted UK consumers for many years, with the importance of credit groups steadily increasing in everyday life. In periods where lavish spending is expected - for instance, at Christmas and during the summer holiday season - credit spending can be a particularly large problem. However, in January 2007, new research revealed that while Britain's level of credit card spending is increasing, the rate at which consumers are paying off their debt is also rising. According to Morgan Stanley, credit card spending has risen to an average of £1228 per person in the UK - almost £500 more than in the first three months last year. However, repayments were also up to their highest level since 1998, at 95.3 per cent. According to Patrick Muir of Morgan Stanley: "It is encouraging to see that people are using their credit cards sensibly, with credit card spending and repayment figures increasing in tandem."Mr Muir added: "Cardholders are becoming increasingly clever when it comes to being rewarded for the purchases they make and with a wide variety of reward schemes available, ranging from collecting points to cash back, spending on credit cards is fast becoming the most appealing way to pay when compared to other methods."The study by Morgan Stanley infers that, while the popularity of credit cards is higher than ever, the increasing offers provided by banks and financial institutions on interest free credit cards and low-rate credit cards means that consumer debt itself is not increasing. What's more, the research suggests that credit card spending in the first three months of 2007 is set to be a staggering 68 per cent higher than it was in the first three months of 2006. Morgan Stanley also found that this increase in spending is most likely to be spent on the home and car, and then groceries, at figures of £377 and £341 respectively. The importance of consumer debt levels today is gaining pertinence, as Britain's levels of consumer lending and consumer debt still remain among the highest in Europe. Currently, more and more people are looking for ways to increase their spending power - whether that's from choosing new credit cards or taking out personal loans. As a result, the conclusions made from Morgan Stanley's research findings show that, while credit spending itself is rising, the fact that repayments are increasing means that consumers are doing all they can to reduce their levels of debt where possible - a fact that consumer credit groups are sure to welcome wholeheartedly.

How Your Bad Credit History Hurts Your Chance Of Getting A Loan

Obtaining a loan or any type of finance can be a real challenge. If you have a bad credit history and you are trying to get a secured loan or buy a house, you will usually have to do even more work to find a lender that will be prepared to lend you the money. You will also have to pay a higher interest rate than someone with a clean credit history. What Is Credit History? Before you go looking for loan, it is crucial that you know more about your credit record. This is a recording of all your past financial commitments and contains information about your repayment reliability and the total amount of debt you are carrying. Lenders look at this record to determine your credit worthiness, usually by assigning you a credit score. The lower your credit score the less likely a lender is to grant you a loan. How Did Your Credit History Go Bad? Your credit history is an ongoing record of information about you and your finances, so anytime you miss a payment it is captured in the file. This is the same if you have ever defaulted on a debt or failed to fulfil a financial contract. Everything is captured in this record, missed mortgage payments, repossession, bankruptcy, CCJs, IVAs, credit card defaults, etc.Credit reference agencies collect other information about you, such as changes in employment or address. If your record shows that you make such changes frequently this will also lower your credit score. Will You Ever Qualify For A Loan? Generally speaking you will still be able to get a secured loan or mortgage, but there might be certain restrictions on your borrowing. Because of todays culture of debt there are an ever number of increasing lenders who specialise in loans for people with bad credit. Just keep in mind that you will probably be charged a higher interest and maybe offered a lower loan amount. The positive part of this is that once you have secured the loan you can start repairing your adverse credit history by making regular, payments on time. It will take a little time to improve your credit history, but it will happen.What Type Of Loan Can You Get? You have the option of going for a secured loan or unsecured loan. Unsecured loans are more difficult to get because you dont put up collateral as security for the loan. This is risky for the lender so expect them to require more stringent loan terms in this situation. Secured loans, on the other hand, require you to provide some form of asset as collateral. Most of the time this means you will secure the loan with your house. The amount of money you can borrow and the interest rate you will pay are influenced by your credit history, your total amount of debt, and your homes value. Different lenders weight these items different ways, so be sure to check with several to find one with a product suited for you. Where Do You Look For A Bad Credit Loan? Before you submit any loan enquiries, you need to research a number of different lenders and brokers. Find out about their interest rates, any special loan terms they may require, and any other specifics about their loan process. You can do all the research you want, but be careful not to submit a large number of loan enquiries over a short time period. This kind of activity can actually damage your credit history further. Generally if you have an adverse credit history the best way to source a good loan is to use an independent broker. Make sure that they are not tied to one lender but have access to a large panel. Find out what fees they will charge and what are the reasons for charging these fees. There are a large number of both secured and unsecured loan brokers in the UK, some are ethical others not so much, so make certain that you speak to as many as possible.

Debt Snowball: A Simple Method Of Getting Out Of Debt

More and more people are unfortunately finding themselves sinking deeper into the debt mire. Many people look for outside help to tackle their debt problem, perhaps through the Citizens Advice Bureau, or a firm specialising in negotiating with creditors to lower the monthly payments. Others might take out an IVA (Individual Voluntary Arrangement) or in extreme cases might even consider declaring themselves bankrupt. However, all these solutions will have a major, negative effect on your credit rating.However, by using a recently introduced system of managing debt repayments, people can actually help themselves to tackle their debt problems without damaging their credit rating. The system, called the Debt Snowball, has been devised by Dave Ramsay and goes against the grain of most of the advice given by self-help books and even some financial advisors.Many debt counsellors advise paying more money towards the debts carrying the highest interest rates first, with the lower rate debts receiving the minimum payments. However, in many cases the debt that has the highest interest rate also has the highest amount outstanding and it can feel that no matter how much money you plough into clearing the debt, it never seems to get lower. And by paying the minimum amounts to your other debts, you’d be hard pushed to make a dent in them too!However, according to Dave Ramsay the best method is to create a debt snowball by actually paying off the smallest debt first! The method works by setting aside a fixed amount of money that will allow you to cover all your debts with a little extra left over. Ramsay advises that you pay the minimum payment to everything other than the smallest balance, where you devote whatever cash you have set aside towards the debt. Once that debt is clear, add the payment onto the minimum payment for the next debt and continue the minimum payments for the others. As each debt becomes cleared, the snowball of cash you can pay towards your debts get bigger; and as you get towards the bigger debts, the snowball will allow you to pay more off the debt and clear it off quicker. The system works, regardless of who you have debt with: banks, building societies, credit card issuers or even debt collection agencies, such as Capquest, and before long you’ll see debt being reduced far more than you would if you tackled your bigger balances.So, if you’re struggling with debt, but don’t want to go down the debt consolidation or IVA route, a debt snowball might be the answer; and there are many websites available which can provide calculators to help you work out the size of the snowball you’ll need to help you get out of debt.

About the Author
Capquest Debt Recovery is a UK-based company, specialising in the management and recovery of overdue and delinquent consumer and corporate debt.

Tips For Your Credit Repair

If you have a negative credit report it can reflect on many areas of your life. For instance, if you were looking around for a new bank loan or bank account the credit check would reveal your credit history and decisions will be made using these results. How about a new job, if your intended employment is relative to this area your credit history is also a taken into account in the decision to employ you or not.An adverse credit report needs to be addressed because it will take a lot of time to overcome this history. The first step is to acquire your own credit history report, which you are entitled to see. Having this report lets you know if there is incorrect data in your file. Some people who believe they have a bad credit report may seek out some professional help to repair a bad credit report. Many businesses can be found advertising this form of help. Caution should be used when using these services as some may push the legal limits while they try to regain the positive outcomes for you. In the end you are legally liable for any implied fraud charges presented by over enthusiastic credit repair company you have employed for advice.When looking for businesses to assist you in this it would be recommended that you follow some credit repair tips.Some Credit Repair Tips For Discovering An Organization To HelpA good place to start in looking for a credit repair organization is the internet, although it is not advisable to follow through with an email received from an unknown source as they are dubious. This way does not allow you the benefit of really knowing what their reputation is. Having a look through the local yellow pages is also a good place to look and has a higher likelyhood of finding out a companies reputation and success rate. Of course you cannot beat a word of mouth recommendation from someone who has been where you are now and used a particular company successfully then given you their credit repair tips.Some credit repair tips would be to not hand over money before any work has been carried out and finished. If a company promises too much. For instance, a company (incorrectly) says they can remove records, that are correctly present, from the system. Records such as bankruptcies and foreclosures cannot be removed except when they have expired. These records are there for many years e.g. foreclosures are seven years and ten years for a bankruptcy. Businesses that claim that they can obliterate these records are probably attempting to defraud you the client.Credit Repair TipsWhy not handle your own credit repair? If you decide not to do your own repair make sure you have chosen someone who has your best interest at heart and not your fee payment. Follow these credit repair tips and you can be sure that you will be able to find a company that will do all they can for you.

About the Author
For further information regarding this important subject click here to visit our web site.

How to Get Your Credit Score for Free.

Claim Your Free Credit Score and FICO NumberFor many Americans who are looking into paying for that dream house or that new set of wheels, one of the most important things to consider before filing a loan is their credit report. The truth of the matter is many people are aware that could now get a free credit report. However, only a small number of them know how to obtain one.As opposed to what a lot of people probably think, getting a free credit report is actually a cakewalk. Gone are the days when consumers would have to wait in line or spend hours on the phone before they can get a hold of their credit report. With the technological advantage of Internet, one can gain access to his credit report just by a few keystrokes and mouse clicks. Best of all, these credit reports come for free -- a privilege granted by the US government to every consumer.The accessibility of credit reports is made possible by the Fair and Accurate Credit Transactions Act (FACT), a bill which was passed on December 4, 2003 by the US Congress. This act, which is sanctioned by the Federal Trade Commission or FTC, allows every consumer to obtain a free credit report once in a period of twelve months. Similarly, the FACT also ensures the privacy and accuracy of the information that the various credit reporting companies hold. Under this act, the FTC, together with the three credit reporting companies namely Experian, TransUnion, and Equifax, have set up a website where people can log on to check out their annual credit scores.According to the FTC, there are three ways a consumer can obtain his credit report. The first one is by visiting the FTC's authorized website, AnnualCreditReport.com, and providing all the information needed to access the credit report. This is generally the fastest way to obtain one's credit report. Consumers have to be cautious, however, of the supposedly free credit reports they see offered on unauthorized websites. More often than not, the services offered on these sites are not entirely for free. Those who want to get credit reports should keep in mind that they can only get them for free from the website FTC provided.Another way to obtain free credit report is by calling the toll-free number provided by the FTC and the three leading credit reporting companies. However, FTC warns consumers not to contact the three credit reporting companies individually. This might be caused by the fact that the credit reports obtained by individually contacting the three major credit reporting companies come with a fee.Apart from a toll-free number, consumers who want to get a free credit report can do so by filling out an Annual Credit Report Request Form, which can be printed from FTC's website. Some of the information that a consumer may be required to provide in the form include his name, Social Security number, address, and birth date. After completing the form, the consumer may send it to the Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.The good thing about obtaining a free credit report from FTC is that they provide information on how a person can fix any inaccuracy he may have encountered in his report. Aside from being free, the credit report acquired from FTC is usually accurate and up to date. Those who want detailed information on how they can obtain free credit reports can check out the FTC's official website.

When it comes to credit cards, more choice doesn't have to mean more confusion

When it comes to choosing a credit card, your options are numerous. But all too often, an abundant set of choices can cause confusion. Should you choose a low introductory rate or a low standard APR? Is it worth considering a loyalty, reward or point-based credit card? And what are your choices if you've experienced bad credit ratings in the past? Amidst countless facts and figures, there is a way to make sense of all the credit card offers on the market: use a credit card comparison tool and you'll have all your choices conveniently set in front of you. Credit card comparison tools are commonly found on consumer comparison sites - sites specifically designed to help consumers sort through an abundant set of various market offers. But instead of merely listing all the offers on one comprehensive site, comparison tools help consumers locate offers that cater to their specific needs. For example, if you're new to the credit card market, different offers will apply to you than if your credit is fairly established. Similarly, if you've experienced credit problems - such as arrears, CCJs, defaults or bankruptcy - in the past, you'll be more suited to certain types of credit cards which will help you stay on track with payments. A consumer comparison site will ask you to enter initial credit card requirements, and will then produce matching offers for you to browse through. So no matter what your circumstances are, you're sure to find an offer which suits you.With the right comparative tool, you can choose a credit card based on the features which are most important to you. For example, you can pick whether you'd rather find credit cards with a low introductory rate or a low standard APR. Similarly, you can restrict your search to credit cards offering a loyalty bonus or cash back reward, or those which are affiliated with charity programmes. You can even apply for your credit card of choice online - making the search and application process even easier. If you're looking for a quick and simple way to make sense of all the credit card offers on the market, why not utilise a consumer comparison site? You'll be able to enter your initial requirements - regarding anything from rates to rewards - into a search facility, then view the available offers side by side. Whether you need to find a new credit card or transfer a credit card balance, a simple search with a comparative service can help you track the best deals and rates from providers all across the UK.

About the Author
Andrew Regan is an online, freelance journalist.

Got credit card debt? Try transferring your balance

If you currently hold debts on one or more credit cards and you’re having trouble paying them off, switching to a new card with a low balance transfer rate could save you a lot of money. By stopping or lowering the interest that you're paying on your debt, you’ll prevent your debt from growing and will therefore be able to make repayments faster.In order to attract new customers, many credit card companies offer a special low introductory rate for balance transfers. This gives you the chance to transfer your existing debt, for which you may be paying up to 18% interest, to a new credit card with a low interest rate, or even an interest free rate for a fixed period of time. When looking for a new credit card to transfer your balance to, you should try to find the lowest possible interest rate for the longest period of time. It’s worth shopping around for good deals, and new offers are constantly becoming available - so it’s possible to find a 0% interest rate on balance transfers for a period of up to 13 months. If you have a large amount of credit card debt that will take more than a year to clear, you may have to switch your balance each time your interest free period expires. Though this will mean shopping around and filling out new paper work on a regular basis, it will save you money. However, there are a growing number of consumers who object to the inconvenience of transferring their balance every few months - something which has led credit card companies to offer “lifetime balance transfers”. These generally offer an interest rate of around 5% on balance transfers, which some customers prefer to pay for the added convenience of not having to switch cards on a regular basis.Obviously, the more debt you have on a card, the more you will save if you switch the balance to an interest free card. However, if you choose to transfer your balance to save money on your current debts, it's a good idea not to use your new card for spending. Although you will be offered a low or interest free rate on the balance transfer, you are not normally given the same rate for new spending on the card. In fact, the spending rate may be as high as, or even higher than the card you transferred from. So, resist the temptation to spend - even if that means keeping the card out of your wallet where you could be tempted to use it!If you spend wisely and take advantage of interest free credit card balance transfers, you’ll soon be able to clear your debts and get back on track.

Find Out How To Choose The Right Credit Card For You

It is great to have a good credit card. Just one of those cards you can whip out at a moment’s notice and flash it around for everyone to be able to see the gold or platinum stripes on it, and marvel at your financial wisdom for being able to score of those big ones. It feels good, doesn’t it?But what price are you really paying for that piece of plastic? Is it really worth all that you have gone through to get it? I mean, think about it – you are paying 18% interest and it comes from some no-name bank. Are you really impressing people with it, or is that a look of actual pity instead of envy?You need to be careful and cautious when you get a credit card these days. There are all kinds of banks who are willing to compete fiercely for your business, but how serious about it are they? If they are willing to offer 18% interest, I would say they are not real serious. If they don’t offer a generous credit limit, a low interest rate, a balance transfer option, and other things that go with the real brand name premium cards, maybe their elite card is not as elite as you thought it was in the first place.There are a variety of cards available for you, but you need to know how the game is played, and you also need to know what benefit you get from it, in addition to the purchases you make with it. For example, there are the affinity cards, like from airlines or car rental companies. Every dollar you spend on their card goes towards a free upgrade or some subtle thing that they offer. If these are the kind of services that you use on a regular basis, then this might be the best card for you.Do you feel charitable? If so, you may want to consider one of the cards where a percentage of every dollar or a percentage of every purchase goes towards your favorite charity or mission. There is something very nice able being able to purchase something and know that you are also helping out the children’s orphanage or the local community blood bank.Then there are the department store credit cards. You have seen these when you visited that department store – you can save 15% on your purchases today if you get one of their credit cards. That sounds good so you sign up. But then you discover that savings that 15% was not such a good deal after all, because the credit card they issued you has an interest rate of somewhere between 20% and 30%. Ouch! That is higher than most credit cards from banks!The bottom line is to watch what kind of credit card accounts you open. Whether it is a department store card or a Visa or MasterCard or Discover, one of the places that will eventually find out about it is the credit bureaus via your credit report. Even if you have a zero balance on most of your credit cards, the fact that you have 148 credit cards that you COULD max out tomorrow is enough to make them squirm if you go to apply for credit on a big ticket item. If you do not need the credit, then don’t apply for it, because having that extra credit card in your wallet could do you more harm than good.

About the Author
Jon is a computer engineer who maintain a variety of web sites based on his knowledge and experience. For more information about Credit Cards, please visit his web site at Credit Cards.

Loans For Every Occasion:Student Loans And More...

At some point in life, it is almost guaranteed that you will be applying for a loan of some sort. Paying cash for products and services is not only becoming obsolete, it's terribly inconvenient. Today, credit is a way of life, and as more and more people begin to shop online, plastic is the currency accepted everywhere. The most basic of loans is of course, the credit card. Companies that issue credit cards make money every month that you carry a balance, and they are betting on the fact that you won't pay off the balance every month. Some loans actually make good business sense. Why would anyone want to shell out $300,000 for a new home when they could get a Home Loan and pay $1,000.00 a month, and then deduct the interest paid from their income taxes? That three hundred grand could be put to work in other investments, and could conceivably earn more for you than you are actually paying for the house! And all that time, if you time it right, your house becomes more and more valuable. There are also times when for many people things just aren’t going well financially. An unexpected expense occurs and you find yourself just coming up short on your living expenses. Many types of loans exist for this type of situation, both secured and unsecured. Maybe you just need some quick cash to get through the holidays, and intend to pay the loan off within the next few pay periods. Companies offering short term Payday Loans abound both on the Internet and off. Some with no credit check will transfer up to $1,500 into your bank account within 24 hours. Student loans, auto loans, small business loans, personal loans, home loans, second mortgages, payday loans, government loans, bad credit loans, loans to consolidate other loans – there is a loan for just about any occasion out there. The question is how much are you going to pay for your loan? And the answer to that depends in most cases on your credit history. Your Credit History: Weather or not you get the loan, and how much it will cost you. It is never too early to start establishing credit, and the best way to do this is with a credit card. If you are finding it difficult to obtain a credit card because you have no history, you can always buy your history by applying for a secured credit card or line of credit. Put down $500 or $1,000 and borrow against it. Make sure the institution you are applying to reports to the major credit bureaus, use the line of credit and pay your bills on time, and voila – you have a credit history! There is nothing wrong with carrying a balance over, just pay the minimum or a bit more, and pay it on time! Creditors like to think they will be making some money off of you. What Lenders are Looking For While different institutions have different criteria, there are some generalizations one can make about how they determine the creditworthiness of an applicant. Make no mistake about it; creditors are in the business of making money. If your credit is less than perfect, it doesn’t necessarily mean you won’t get the loan, but you will be paying more for it! After receiving your application, a lender will then acquire a credit report from one of the three major credit bureaus, Equifax, Trans Union, or Experian. This is your credit history. Taking into account such factors as your income, the balances in your checking and savings accounts, the assets you own, the length of time you have been at your current job and place of residence, the amount you owe other creditors, and how promptly you pay your bills, the potential lender will then make a determination on if you will get the loan, and how much they will charge you for it. Frequent late payments, bankruptcy, repossessions, legal judgment liens, or accounts being turned over to collection agencies do not bode well for obtaining a loan. That being said, most creditors realize that life happens, and such legitimate circumstances like an unexpected illness, injury, or the loss of your job do not necessarily reflect negatively on your creditworthiness. When Things Take a Turn for the Worse If you are in the process of paying on a loan or loans and one of these unforeseen circumstances befall you, talk to your loan officer. Most loan institutions find it in their best interest to work with the lendee, and will often make the necessary arrangements to make it easier for you to make your payments. Just remember, they want their money, and the last thing they want is for you to default on your loan, or heaven forbid, declare bankruptcy!
About The Author
Michael Talbert is an author that writes on a variety of topics. Visit The Loan Station at http://www.Loan-Station.net for more information.

A Guide To Paying Back A Student Loan

A borrower has certain responsibilities to take care of, once a loan is negotiated. In order to keep your loan in good standing, it is important to fulfill all your obligations. A lapse in making a single payment indicates delinquency. You could get into the default record if you continue to ignore your loan repayments. If you face any trouble in arranging funds for paying back your student loan, you need to contact the organization that provided the loan. There are chances that you may qualify for forbearance, deferment or any other form of payment relief. In most of the cases, student loans do not require repayment until after graduation. Many fresh graduates do not find a suitable placement very quickly. However, after graduation, there is a six months grace period before the repayment schedule begins. Even though a student may identify a good job, he could initially be underpaid, leading to issues with the repayment of the loan. There are several strategies that could be adopted to help you repay the loan. Student loan lenders and service providers offer several repayment options. You should check with your creditor to gather details on any such available plans. Repayment plans offer the following options: - Graduated repayment: The payment is lower in the beginning and increases steadily over a period of time. - Standard repayment: Interest payments and principals are due each month, throughout the repayment term. - Income sensitive repayment: A percentage of the borrower’s monthly income forms the basis of calculating the monthly repayment, although this plan applies for certain account borrowers. - Extended repayment: This incorporates lower monthly payments for an extended period of 25 years. - Loan consolidation: You can consolidate several loans into one new loan, with a low interest rate and easy finance management opportunities. - Prepayment: This can reduce your total cost of borrowing because most private student loans allow you to make payment of a part or your entire loan before the scheduled payment. This can be done anytime during the life of the loan. In addition you should check: - Your state might be offering programs that reduce or even cancel your loan if you perform certain services like, nursing or teaching. You can get in touch with the state agency for postsecondary education, to check if there are such programs available in your state. - There are religious and civic organizations that provide certain benefits and aid in repayment. - Your personal expenses may need to be analyzed and kept minimum. Try to keep your living expenses low initially. - It is possible to apply for forbearance, deferment or any other payment relief programs. Deferment: It is the temporary suspension of the loan payment if you re-enroll yourself in a school, are unemployed or facing any economic hardship. Forbearance: This is also a reduction or postponement of the loan payment, temporarily, while you are in any financial difficulty. Other forms: These may include graduate or income sensitive loans. If you are facing financial difficulty and it is impossible for you to repay the loan immediately, you can always take refuge in these options. They not only help you to repay your loan easily, but also help you maintain a good credit report.
About The Author
Joe Kenny writes for the UK Loans Store for loans UK and offer more information on student loans and other loan topics available on site. Visit Today: http://www.ukpersonalloanstore.co.uk

NextStudent Offers PLUS Loans for Graduate and Professional Students

According to Phoenix-based NextStudent, a premier education funding company, the proliferation of graduate and professional programs has led to new sources of education funding designed to benefit these goal-orientated students who are, in essence, beginning their career by continuing on in their education. As the job market in the United States continues to generate a need for applicants who are highly competitive in specified fields from technology to the ever-growing medical field, undergraduate students across the country are beginning to feel the squeeze as graduate and professional degrees become “must-haves” for even intermediate and entry-level positions. The decision to continue education onto the graduate and professional level is one that oftentimes comes with considerable financial stress because of the continued financial obligation. However, NextStudent’s Graduate PLUS Loan (http://www.nextstudent.com/) Program may allow borrowers to fund up to the full cost of their education (less any financial aid received), including living expenses, books, supplies and even computers. NextStudent now offers a PLUS Loan Program for graduate and professional students with rates starting as low as 8.5 percent. The Graduate PLUS Loan Program features the same benefits directly to graduate and professional students that parents of undergraduate students receive from traditional PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp). Because NextStudent Graduate PLUS loans are federally sponsored, they offer many of the perks of traditional PLUS loans, including eligibility for federal student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp), tax-deductible interest and a variety of repayment options. Eligibility and Credit Resolution NextStudent offers a simple online application process through E-Signature, and many prospects who apply online qualify within minutes. Also offered is a “second look” for borrowers who receive an initial denial because of unresolved credit issues. NextStudent has a PLUS Credit Resolution Team that has an 87 percent success rate at resolving borrowers’ credit issues, resulting in funded PLUS loans. Graduate PLUS loans (http://www.nextstudent.com/plus_loans/plus_loans.asp) easily are accessible to many students. To qualify a student must be a U.S. citizen or an eligible noncitizen. Although a credit check is required, many students with limited or no credit history still qualify for Graduate PLUS loans. Flexible Repayment Options and Aggressive Incentives With all the great incentives offered by NextStudent and its Graduate PLUS Loan Program, now is the right time for students to take the next step and go for their graduate degree. NextStudent Graduate PLUS loans offer several repayment options including deferred repayment while a student is enrolled in school at least half time, and there are no prepayment penalties, ever. There also is a 3 percent cash rebate at repayment on the remaining principal balance after the first 12 months of consecutive on-time payments when student borrowers pay through Auto-Debit. In addition, a 2 percent interest rate reduction is available after the first 48 months of consecutive on-time payments when student borrowers pay through Auto-Debit. Student borrowers receive a .25 percent reduction when they choose repayment through Auto-Debit. NextStudent, federal lender code 834051, is dedicated to helping students and their families find affordable ways to pay for college. NextStudent offers one-on-one education finance counseling and has a portfolio of highly competitive education finance products and services including a free online scholarship search engine, federally guaranteed parent and student loans, private student loans, both federal and private student loan consolidation (http://www.nextstudent.com/consolidation_loans/consolidation_loans.asp) programs, and college savings plans. The NextStudent Scholarship Search Engine, one of the nation’s oldest and largest scholarship search engines, is updated daily, available free of charge, completely private – and represents 2.4 million scholarships worth $3.4 billion. For more information about NextStudent and its student loan programs, please visit the company’s Web site at http://www.nextstudent.com/.
About The Author
Jeff Mictabor is an enthusiast on the topic of student loan issues in the news. He has been writing for the past 10 years for a variety of education publications. He now offers his writing services on a freelance basis.

Finding the Best Private Student Loan

Students who do not meet federal requirements for financial need can use the route of a private student loan. Apply for a private loan is free. The loan is based on the student's creditworthiness and not the need for aid as does the federal loans. Many lenders offer private student loans to students or their parents and the application process is simple and free. The loan requirements are usually less stringent and the repayment options are affordable for young professionals. A private student loan is a great way to finance the education of any student that needs financial help. Below you will find things that you should know and things you should consider. Things You Should Know: 1. Student loans can be used not only to pay the fees but also for lab fees, dues for associations and housing. 2. A student can have an educational loan even though the tuition is covered by a grant. 3. A student who is eighteen years or above in age, can apply for a student loan. 4. Most of the student loan is deferred for repayment until the student completes the education or leaves the school. Things You Need To Consider: 1. Private loans for students are not given without a co-signer or a credit report. 2. Credit unions give student loans if a vehicle or a boat is provided as collateral. 3. During the cumulative credit period, a student has the option of paying or not paying the interest part of the loan. It should be noted that paying the interest on the loan while attending school will significantly reduced the amount due when the student starts paying the loan after leaving the institution. 4. Student loans are to be repaid in ten years. Nevertheless, longer repayment facilities are provided to large student educational loans. It is not difficult to finding lenders, because most financial institutions offer some form of student loan. Always take the time to investigate lenders in your immediate area and find out exactly what kind of loans they offer. Compare the different interest rate and terms to get the best offer available.
About The Author
Dave Fitzgerald is a freelance publisher living in Glendale, Arizona. He publishes articles and reports in various ezines and provides information on student loans. For more information about loans and lenders come visit http://www.DelveIntoStudentLoans.com.

Most assets: all student loan jumps into originations

BEING big doesn't always mean having the highest profile. All Student Loan is a prime example.
The non-profit, officially named Access to Loans for Learning Student Loan Corp., is the largest charitable organization in Los Angeles County, as measured by its 2003 assets of $850 million. Yet few outside of higher education know it even exists.
The Los Angeles-based institution was the fifth-largest originator of higher education loans in California in 2003, grabbing 5 percent of the market, behind a handful of large players such as Sallie Mae and Bank of America.
In this school year, All Student Loan is expected to originate $170 million in loans to students in school, plus another $90 million in consolidation loans for students who have already graduated.
"Despite our size in the non-profit world, in the banking world we are a fairly small player," said Chief Executive Christopher Chapman.

All Student Loan's assets have grown as it holds more student loans on its books, rather than selling them off to a third party. Its loan portfolio grew to more than $1 billion this year, representing 70,000 borrowers, from less than $100 million in 1995.
The low-interest student loans are guaranteed by the federal government. Students seeking a Stafford loan will pay no more than 3.37 percent, a rate that can be lowered to 1.13 percent for borrowers who keep up with their payments. (Formerly known as "Guaranteed Student Loans" and renamed in honor of former Sen. Robert Stafford, these are low-interest loans sponsored by the federal government for students enrolled at least halftime.)
If students default, All Student Loan can receive up to 98 cents back on the dollar. It keeps its default rate below the industry average of 6 percent by focusing on four-year colleges, considered the high end of the market.
All Student Loan raises funds by issuing tax-exempt bonds that are backed by repayments from borrowers. It got its start in 1980, along with 40 similar agencies, when interest rates were sky high and banks had little interest in loaning money to students. In response, the federal government created the non-profits to operate in the secondary market, buying student loans from banks in order to encourage them to issue more.
Six years ago, All Student Loan made the jump into the retail sector, issuing a little over $10.5 million in student, parent and consolidation loans. Today the retail market accounts for 90 percent of its business, and it competes largely against for-profit lenders. The company's non-profit status allows it to undercut its competitors by offering lower interest rates, Chapman said.
Despite its asset base, All Student Loan has only about 45 employees at its West Los Angeles offices, and farms out its loan servicing operations to a third party.

Student loan survival guide

Philip Jones wanted nothing more than to marry his fiancee, fly away to Costa Rica, and embark on the rest of his life. But something was holding him back--the $40,000 in student loans he owes to Direct Loans and Sallie Mae.
Jones, 30, was stressed out because he knew that if he fell behind on his loan payments, the U.S. Department of Education could provide offsets against Social Security payments and garnish his wages and tax refunds, without a court order. Until recently, only the Internal Revenue Service wielded such power.
Luckily, the 2004 graduate of Rutgers University College of Engineering knew a little something about forbearance, a temporary suspension of loan payments that most lenders will allow when times are tough. For Jones, his wallet was being pulled in too many directions; he was trying to pay for a house, a wedding, and a honeymoon within a six-month period.
"I didn't have to make a payment for six months, so that money went toward the wedding and honeymoon. It's easing the financial stress," says the mechanical engineer, who works for Hayes Pump Inc., an industrial equipment distributor in Fairfield, New Jersey.

For the class of 2002, the most current information available, the median student debt was $16,500, according to Sallie Mae, the nation's leading provider of education funding. And with the average college debt burden increasing, many recent grads are finding it hard to manage when the bills are due.
While Jones opted for forbearance, there are plenty of other ways to stay on track with student loan payments without breaking the bank. Erin Korsvall, spokeswoman for Sallie Mae, offers a few tips for taking the pain out of repayment.
* CHOOSE YOUR REPAYMENT PLAN CAREFULLY. "There are a number of different repayment options to help you manage your monthly payments," Korsvall says, offering income-based and interest-only payments as examples. Borrowers can also extend their payment terms to lower the monthly payments.
"Each situation would apply for borrowers who are in a position where they need to minimize their monthly payments. Perhaps they are a recent graduate who has just entered the work force," she says.
* STAY IN TOUCH WITH YOUR LENDER "Make sure they have your current address. You don't want to miss the bills," Korsvall says.
* PAY ON TIME. "It's the best thing to do," Korsvall says. "Sallie Mae offers an interest rate discount when you pay on time. There are no pre-payment penalties."
One way to ensure you pay on time is to pay electronically. There are a number of benefits associated with electronic payments, in which the lender takes the money directly from your bank account. Payments are never late, so the borrower never has to worry about late fees. This also builds good credit, showing lenders that payments are consistently paid on time.
Forgoing stamps has another advantage. Some lenders, including Sallie Mae, will lower your interest rate if you choose to pay back loans via direct debit. For example, one borrower saw his interest rate drop from 4.8% to 4.25% after he switched to electronic payments. Between consolidating his debt and paying by debit, this student was able to lower the monthly payment for his Perkins and Stafford loans from about $300 to $138.
* ALERT LENDER BEFORE MISSING A PAYMENT. "The consequences of default are significant and could include a tarnished credit rating, garnishment of pay, and the inability to obtain additional aid and future credit," says Chris Greene, spokesman for the U.S. Department of Education. "In addition, legal action can be taken to recover unpaid loan balances and fees. If borrowers are experiencing trouble meeting their obligation, they should contact the Department of Education at 1-800-4FEDAID or their lender directly."
Borrowers have 270 days of nonpayment before their loan goes into default, according to the Department of Education. If the loan holder can't recoup its money, it may then decide to use an outside agency to try to collect the money. If that happens, as much as 25% of the amount of the loan could be added to the loan to cover the cost of collection.
"The last thing the department wants is for a borrower to go into default and force us to collect on the loan. Borrowers experiencing difficulties in making payments should contact their lender or the department, and we will work with them," Greene says. "Remaining in an active, current repayment status is in the best interest of the borrower and the department."
The government is currently trying to collect about $31 billion in defaulted loans, according to the Department of Education.
* TAKE A BREAK FROM PAYMENTS. Borrowers can postpone repayment through deferment or forbearance. Both allow for a period of time when the borrower doesn't have to make payments, and they are better alternatives to defaulting.
Deferment allows borrowers to stop loan repayment for specified periods of time under certain conditions, such as re-enrollment in school, unemployment, or economic hardship. You must formally request a deferment from your loan holder. You may need to complete a deferment form and show documentation that you are eligible for the deferment, according to the Department of Education. There is a three-year limit for deferring loans for those with an economic hardship or full-time unemployment. There is no limit for deferment based on reenrollment in school.

Student loan

Twenty-five years ago, I completed three years [of undergraduate study] and I need to return to school to complete my degree. Ply student loans are in default, and the university will not release my transcripts unless I pay off the debt in full. Unfortunately, I'm not in a position to pay off the debt. And my credit is terrible, so applying for a loan is out of the question. Do you know of any grants, scholarships, or programs designed to help someone in my position?




When you default on a student loan, the maturity date is accelerated--making the payment due in full. However, there are some options for repayment. According to Federal Student Aid (www.ed.gov/offices/OSFAP/DCS/ index.html), in order to restore your eligibility, you can repay the loan in full, make six agreed-upon payments over a six-month period, or consolidate your loan through a federal consolidation loan program. Or, you can rehabilitate your loan, which requires 12 consecutive, affordable monthly payments. The remaining loan will be in repayment for nine years, making you eligible for additional student financial aid,
For information on grants, contact the financial aid office of the school you plan to attend. For scholarship information, read "How to Find Up to $100,000 in Scholarship Aid" in our February 2004 issue.