This is a guest post by Kavin Matthews. If you want to guest post on this blog, check out the guidelines here.
As we come to the far end of 2011, the economists give a retrospective glance at the economy to check where we stand. Though individual bankruptcies are falling, yet that doesn’t speak much about the improving financial behavior of the US consumer, who is still being supported by the record federal stimulus. With the record high unemployment rate, people are suffering from lack of cash and spurring personal credit card debt level. The consumer bankruptcy level plummeted 9% in the first half of the year 2011 as compared to 2010. The American Institute said that roughly 707,000 Americans have declared bankruptcy in 2010 but 2011 saw a declining rate of credit card delinquencies and falling missed payments on loans. Does this suggest that the consumer finance is improving?
The life-saving option for the debtors – Is debt consolidation the ultimate choice?
As the Americans are misusing their credit cards and accumulating debt on their accounts, most of them are desperately looking for some option to give their financial life a fresh new start. When you approach financial consultants, most of them will recommend you to the debt consolidation option as this is perhaps the best way to repay your debts effortlessly and also boost your credit score at the same time. Though the ads and pitches for debt consolidation are everywhere, yet hardly all of them are true to their services. Misinformation prevails in this particular industry and if you have to complete a successful debt consolidation process, you have to stay informed about the exact information of such companies.
Some debt consolidation facts you can’t do without
If you’re up to your eyeballs in debt and you’re still not aware of the actual facts of debt consolidation, then you’re perhaps lagging behind. Don’t believe in all the myths that are usually circulated within the industry as this may lead to a soup. Here are some debt consolidation facts that you can’t do without.
- The teaser rates and the prime rates: Usually lenders advertise various teaser rates for the home equity loans, balance transfer cards and the personal debt consolidation loans but the prime rates are always reserved for those who have exceptionally good credit score and the rates that sound far from being true are offered for a short period of time.
- DMP and credit counseling are not synonyms: A credit counseling agency is more like a teaching institution that preaches debtors to get out of their red through budgeting and personal finance management techniques. A debt management plan is usually one of the many debt relief options that the credit counseling agency chooses to help the debtor get out of debt.
- Consolidating through a program may not be the best choice: Not always it is seen that repaying debt through a debt consolidation program is the best choice for a debtor. Sometimes, a debt consolidation loan with a drastically low rate can also work well with your present financial status.
Is debt consolidation the ultimate panacea for the debtors?
Are you relieved to enroll yourself within a program or by taking out a loan? If answered yes, then you have to probably change your attitude towards money. We all know that changing our bad financial habits are often tough but when it comes to consolidating our debts, taking the plunge without bringing about any noticeable change in personal finance management will become disastrous. Remember that debt consolidation is not just a way to delay the inevitable. You have to manage money and make the timely payments on time so that you can live a debt free life.
If the consumers continue to reduce their spurring debt level by getting help from debt consolidation firms, they can improve the growth of the economy too. While the federal debt level is also ballooning with time, you have to make sure that you don’t keep on raising your personal debt ceiling without any change in the spending floor.
Kavin Matthews is a financial writer with a vast knowledge on financial articles. He contributes his financial write ups to various blogs, communities and websites so that the visitors can go through the content and educate themselves on getting out of debt. Some topics covered by him are debt consolidation myths, effect of debt settlement on your credit score and many more. To know more on various other financial topics, you may visit https://www.ovlg.com/debt-consolidation/