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Controlling your debt is the first step to preparing for investing in the stock market. If your debt is high then your debt payments are high. This means that you have very little to save and invest each month as compared to if you had little or even no debt.

Here are two practical suggestions to get you out of debt. The first (1) is to always pay more than the minimum payment on any debt you have. The second (2) is to reduce the interest you are paying without lengthening the time that you have to repay the debt (known as the maturity or amortization) if you can. Don?t ever forget that when ever you have a lender reissue a loan at a lower interest rate frequently you jump back the original length of the mortgage in months and years. Don?t trust bankers because they are there to make a buck for their company at your expense!

Let me give you an example. If you buy $1,100 of Christmas gifts and pay  on your credit card balance after the one month grace period it will take you 12.5 years to pay it off if you make the minimum payment the credit card company wants you to pay. If you just paid $10 extra you would pay it all of in just 6 years which is half of the time.

But what if you had a $5,000 balance? At the minimum payment it would take you 46 years to pay it off! You would end up paying $13,000 in interest. If you reduce the interest rate to 9% you would pay it off in 20 years and save $10,000. What ever you do make sure you pay it all off.

The same Read more…

A home equity loan makes it possible for homeowners to gain access to their home?s equity without selling the property. Traditionally, homeowners would have to sell their primary residence in order to access the equity. The money could be used as down payment on a new residence, or used to payoff debts. Fortunately, moving is no longer the only option for tapping into one?s equity.

How is Home Equity Gained?

A home?s equity is the difference between the mortgage amount owed and the market value of a property. Homes and properties gain equity in one of two ways. For starters, as homeowners submit mortgage payments, the overall balance on their mortgage loan is reduced. Secondly, homes acquire equity as a result of rising home values. Within the past two to three years, many housing markets across the nation have witnessed phenomenal housing increases. For this matter, many homeowners have acquired unbelievable equity amounts in a short period.

Purpose of Home Equity Loans

Each homeowner?s reason for acquiring a home equity loan will vary. Common reasons include using the money to eliminate high interest debts. Many people set a goal of becoming debt free. However, due to high finance fees on credit cards, reducing the balance is extremely difficult. In most cases, a lump sum of money is required. Home equity loans provide the required cash.

Additionally, home equity loans are perfect for upgrading or making improvements to a real estate property. Other reasons may include building a cash reserve, starting Read more…

Want to consolidate your student loans? It’s a good idea, since it can mean locking in a low interest rate for life. And changing to a new lender may have other advantages, too, since another lender may offer better perks and benefits. So as you search around for a Student Loan Consolidation Lender, remember to look for these three things:

ONLINE ACCESS

Online access simplifies the entire process, from application to payments. You’ll be able to apply online instantly without the hassle of dealing with a lot of paperwork (although you may have to sign some official papers before the consolidation is complete). Once your loans are consolidated, you’ll be able to check balances, make payments and change all your information by simply accessing the lender’s website.

RATE DROP FOR ELECTRONIC PAYMENTS

Some Student Loan Consolidation lenders offer a bonus if you decide to make electronic payments. You’ll need to give the lender your banking information–such as your bank account name, number and the routing number of the bank. Then you designate the amount you want to pay each month. Once it’s set up, your student loan payment is automatically debited from your bank account on a designated day. In many cases, if you make this type of arrangement with your Student Loan lender, they’ll automatically drop your interest about 0.5%.

RATE DROP FOR ON-TIME PAYMENTS

Just as some lenders will drop your rate when you sign up for electronic payments, others will give you a lower rate once you have a history of on-time payments. This Read more…

Most people know that they can refinance their house, but fewer know that it’s possible to refinance a car loan, too! It’s become extremely popular in recent years. And it might seem like a silly idea, since most car loan terms are short–typically three to five years. However, it can be a good idea, since:

IT MAY LOWER YOUR INTEREST RATE

If you got your car loan when rates were high, you may be able to get a lower rate now. Or perhaps, when you first obtained your car loan, your credit was less-than-perfect. If you’ve managed to improve your credit score over the past year or so, you may now qualify for the lower rate. And a lower interest rate means less cost to you over time. Even dropping your rate by 1-2% can mean significant savings over the life of your loan.

IT’S USUALLY CHEAP

Many car loan lenders that will refinance your loan don’t charge any fees. That means no application fees, no fees for paying off your first loan early, and no other extra charges. So in many cases, refinancing your car loan won’t cost you anything at all! And if you refinance for a lower rate, that’s like saving money for free.

IT’S EASY TO OBTAIN

Although you will have to go through a credit check, there are lots of lenders out there who will help bad credit borrowers refinance a car loan. And many of these lenders are available online, which Read more…

The only way to eliminate debt is to create a realistic plan of action for repaying creditors. Fortunately, there are numerous ways to reduce debts, which lower your monthly obligations. Fewer bills mean more money, which can be used for other things. Before considering bankruptcy or a type of debt settlement, consider the following tips for eliminating unnecessary debts.

Pay More than the Minimum Payment

If you want to payoff credit cards, intend on paying more than the monthly minimum. If possible, double or triple the amount due. The best way to quickly payoff credit card balances is to apply a lump sum of money toward the debt. This money can come from second employment, income tax return, the sale of a personal item, etc. Another tactic for reducing a credit card balance involves obtaining loans or cash gifts from friends or family members.

Acquire a Bill Consolidation Loan

Bill and debt consolidation loans are ideal for persons hoping to become debt free. If you own a home, consider a home equity loan or cash-out mortgage refinancing. The funds acquired from the transaction can be used to payoff high interest credit cards and other debts.

Home equity loans create an additional loan. Because these loans have low rates and fixed terms, they are normally easy to repay. If choosing the refinancing route, the monies received are wrapped into a new Read more…

If you’re like the average American, you have six or so credit cards. In some cases, all those bills and balances can seem overwhelming. By consolidating your debt into one monthly payment, you can make it more manageable and affordable. And searching for a Debt Consolidation Lender online can make the process of finding a Debt Consolidation Loan easy and quick. But be wary of disreputable lenders, since the Internet makes it simple for scammers to offer Debt Consolidation services. Here are three things to watch out for:

EXTRA FEES:

Depending on the type of Debt Consolidation Loan you’re applying for, you can expect to pay some extra charges. But watch out for any lender that wants you to pay exorbitant fees! You shouldn’t have to pay a fee just to apply for the loan, known as an “application fee.” And your total amount of extra charges should seem reasonable. To ensure your lender is charging competitive fees, make sure you compare the costs between at least three different loan companies.

POOR SERVICE:

If you just get an automated voice messaging service when you call the loan company, or if the only contact information is a web form, chances are the lender’s customer service is less than spectacular. You should have at least one–if not more–phone conversations with a live loan officer or customer representative. Any Read more…

With a good credit rating, you can eliminate high interest debts with a
low rate home equity loan. Borrowing up to 25% of the value of your
home, you don?t have to have equity to qualify for a second mortgage. With
low rates, you can cut your payments as much as two thirds.

Advantages Of A 125% Home Equity Loan

The prime advantage of a 125% home equity loan is that you can secure
lower rates than what you are paying now on your short term loans. In
reality, you aren?t increasing your debt. Rather you are trading one rate
for another.

With lower rates, you payments immediately shrink. You also have the
option with a home equity loan to keep the same payment, but take fewer
years to pay off your debt, saving you even more in interest charges.

Financial companies are willing to lend to you based on your credit
history along with the expectation of increasing property values. Both you
and your lender are banking on your home appreciating.

125% home equity loans are for those who plan to stay in their home for
several years, or at least until their property value increases
significantly. Consolidating your debts with a home equity loan maximizes your
term choices. So loans can be for five to thirty years, affecting
payment and interest size.

Look For The Best Loan Rates

Take the time to look for Read more…

Consumer debt is a problem that affects millions of people. While the average household debt ranges from $6000 – $8000, there are individuals living with a $20,000 and $30,000 credit card debt ? sometimes higher. Overcoming debt is challenging, but possible. Here are a few tips to help you eliminate your debt.

Eliminate Credit Card Debt without Bankruptcy

Although there is no way to make debt miraculously disappear, there are ways to help you eliminate the debt. Many televisions commercials and grant programs advertise free money to get out of debt. However, bankruptcy is the only option for never having to repay debt. Of course, bankruptcy is very damaging to your credit. Thus, this should only be utilized as a last resort.

Obtaining a home equity loan or refinancing your home is a great way to pay off credit card balances. Because home equity loans have a low interest rate, you will have the opportunity to get a low fixed rate, which allows you to pay off your debt within a specified term. Home equity loans have varying terms. Nonetheless, you will become debt free within a few years.

Refinancing your home is another great method. Because refinancing creates a new mortgage, be prepared to pay closing cost and other fees. However, the cash you receive at closing is perfect for eliminating or reducing debt.

Get a Vehicle Collateral Loan

If Read more…

Between February 2005 and January 2006, the Fed raised short-term rates by 2 percentage points. During that same timeframe, the average credit card interest rate went from 12.84% to 15.75% a nearly 3% increase. You can expect to see these rates continue to rise.

With the forcing of many credit card companies to raise their minimum required payment formula (borrowers are now required to make about 4% as a minimum payment, it used to be 2%), coupled with base interest rate hikes, you can expect to see higher default rates towards the end of the year.

During most of the 1990?s about 10 credit card companies controlled about 80% of the market. Now there are about 5 credit card companies controlling the lion share of the market place. At the same time, most consumers already have enough credit cards in their wallets so new credit card applications are getting harder to come by.

This has resulted in credit card companies resorting to stealing a client from another company for growth. They do this by offering the consumer low introductory rates for balance tranfers or rebates on purchases. This may sound good for the consumer by there are a lot of strings attached.

For an example, some issuers are offering a ?low interest rate for the life of the balance?. However, you must also agree to make a minimum number of purchases with their card. Since your payments are going towards the low-rate balance transfer first, the purchases that you made on their card keep the higher interest rate and could end up costing you.

Some companies have removed the cap on balance transfer fees. It used to be about $75 for the transfer charge, Read more…

Read the entire article to understand why.

For over 8 years, congressional backers, banks and credit card companies pushed to get bankruptcy reform on the books. Who has this really helped?

Last year the new law went into effect. The pushers of this law said it was needed to help curb the massive abuse of people who filed for Chapter 7 bankruptcy as a way to simply walk away from their debt. Opponents said the changes would be especially hard on low-income working people, single mothers, minorities and the elderly and would remove a safety net for those who have lost their jobs or face mounting medical bills.

The law bars those with above-average income from Chapter 7 — where debts can be wiped out entirely — except under special circumstances. Those deemed by a new “means test” to have at least $100 a month left over after paying certain debts and expenses must file instead a 5-year repayment plan under the more restrictive Chapter 13.

In addition to this ?means test?, an individual wishing to file for relief under Chapter 7 must first seek credit counseling services and receive a certificate of insolvency.

Basically, anyone seeking to file a Chapter 7 bankruptcy has to go to a credit counseling service that interviews the individual and conducts an analysis of their overall financial situation to determine if they truly can?t afford to pay back their debts.

As you well know, the credit counseling industry is funded by the credit card companies. How convenient. Fortunately, in order for a credit counseling company to provide this service, they must become certified by the United States Trustees office and there are certain guidelines that they must follow.

So, let?s take a look at all the abusers they have been able to quash from filing their Chapter 7 Bankruptcy and prove us all wrong.

The National Association of Consumer Bankruptcy Attorneys released a study that concluded that forcing consumers into credit counseling ? a key provision of the reform Act, was a waste of money and did little to weed out the deadbeats trying to use bankruptcy to avoid paying their debts.

There were six major credit counseling firms surveyed that dealt with 61,335 bankruptcy filers since Oct. 17. Out of those 63,335 people, only 3.3 percent of people in the study were eligible for a debt management plan and Read more…