What is the purpose of debt consolidation?

The main objective is to get a lower interest loan with lower monthly payments without risking your property.

The debt consolidation loans are useful for people with high interest on your debts and the costs they pay the bills each month.
Key benefits of debt consolidation

1. Merge all your debts into one: Suppose you have five different things, the home mortgage, car loan, personal loan and some money on two credit cards, you need to be aware of each of those debts and pay 5 bills each month. With debt consolidation your debts will be consolidated into five one, thus need to pay only one bill each month, making it easier to plan and budget your expenses.
2. Reducing the average interest rate on the total amount: With five different debts, the highest interest rate can be up to 18% and the lowest interest rate may be 3.5%. After consolidation, the consolidated debt may have an interest rate of only 3.5%, so your average interest rate is significantly reduced and therefore your overall debt and you have to pay each month.
3. The debt consolidation loans can reduce the total amount of money you pay monthly, that is, after consolidation you pay less money in the single monthly payment than you pay now by adding all your monthly payments.

Try to avoid loans that ask you to pay very high monthly amounts or promise you a very large reduction in your debt, they are very risky.

Using credit card to buy materials for your business is not the best way. First, the financial rate is high; second, it will reduce your credit card limit which you might need it for family emergency. Your credit card could be a vital source of cash when one of your families is sick or having accident, especially for items that is not covered by your insurance. It is complicated now because nobody wants to loss good opportunity in business! Now is the perfect time for you to learn corporate credit concepts and get the benefit from it.

Corporate credit concepts allows you to get new capital safely without risking your personal assets. You can finance your business without using your credit card or propose for a loan from bank with personal guarantee of your house or other valuable asset of yours.

This concept will enable you to obtain capital by business credit which given under the name of your business. You don’t have to give your credit card number; the process will not even check your personal credit ratings. When you understand the corporate credit concepts you can advertise as much as you need and deliver orders to your customers without worrying lack of working capital for production.

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What is you could meet potential customers and chat with them by doing nothing more than getting dressed every day. You do this anyway, so there is no real time lost. How? Have one or more custom t-shirts made online with a graphic or saying that is relevant to your niche.

If you are designing printed t-shirts with sayings, make them as clever as possible to get people to start a conversation with you. For example, if you have a store selling body jewelry, design a shirt that says “guess where I’m pierced” and walk around the mall, or wherever our potential customers are. Be sure to take business cards with you and don’t harass people, just hand them a business card if they seem interested. You don’t want to get in trouble for soliciting business at the local mall. Send your friends out with a free t-shirt and business cards too. This works!

This article written by Phillip Thow

Can we do something to avoid these economic burdens?

Without attempting now to be wizards of finance or give fantastic recipes, we will describe some aspects that can help us improve our situation.

Obviously, the main solution would be to increase revenues and lower costs.

As for increasing revenues, will be something in the medium term, and can pass for trying to improve our technical or academic training to try to improve our jobs and our wages, or find another job with better economic conditions.

The second part, to reduce expenditure, we can implement more effectively and immediately.
Making a monthly budget

Our plan goes through drawing up a monthly budget.

Although we believe that we control costs, having a plan and carry it out scrupulously help us a lot.

On the one hand, we will put the total family income. In the case of income variables, we will put a medium amount prudent not excessive.

As for the fixed costs must be borne in mind that are inexcusable and must be paid: electricity, water, telephone, gas, mortgage and other loans, a community of neighbors, food, transportation to work or school, etc. We will add these expenses and that amount will be untouchable.

If left over, we’ll leave for expenditure variables. The remaining contingency will use only inexcusable: drugs, school materials, etc. Try not to spend just to see if we are better off.

There are many ways to stretch this money for nonessential expenses. We can leave the coffee bar and take it at home (20 days of coffee = 24 €), breakfast not out (20 days x 3 € = 60 €), leave the car at home and cycling to work (saves time, money and stress), or use public transport with their subscriptions. We can buy food at cheaper establishments. And go out to dinner later this month, when we see that we have a little extra money. We can also try to reduce fixed costs, such as consumption of light: is it really necessary to have the air conditioning to 16 degrees? It is not even healthy. Or heat in winter to 26 degrees to go home in short sleeves? Maybe we can get to 21 degrees, and go with our very comfortable gown. If we put energy saving light bulbs will save on the bill at the end of the year. Is it necessary to speak both the phone? We will have to put on a monthly ceiling speak only what is necessary. Putting the washer fills and sprays in the taps using less water also.

But the main costs faced by households is mortgage payments. Many times, your payment is almost all of our income. And people keep mortgage because the rental market does not offer much cheaper prices than mortgages. Solving this is not in our hands, but is there any way to soften the economic bleeding.

In cities, many people have traditionally gone to live in the surrounding villages, cities known peaking bedroom. There are cheaper houses, although their prices are still soaring. In cities such as Madrid or Barcelona, prices of apartments in the suburban municipalities are not very affordable. But in other provinces, you can still save a lot on housing if you’re willing to live 40 minutes away by car. You can save up to half, which will be a great relief payments in the future. And another option is to seek work in areas with cheaper housing (there are provinces with more affordable housing than others.)

In short, make a budget with expenses inexcusable and leave the rest for contingencies. Also, try to minimize the consumption of electricity, water, telephones, gasoline, bars and restaurants.

Not because we always eat more for a better life.

There are times when you yourself can do the consolidation, for example, when you can negotiate a lower interest rate for transferring credit card and other debts to this card from other cards with higher interest (watch out for transfer fees .) But other situations are more complicated and for which you may not feel qualified.

* If you are not qualified to do it yourself, you can hire a debt consolidation company.
* A coach will analyze your financial situation: number of unsecured loans (like credit card debt), number of guaranteed loans (mortgages, car loans), total amount of debt, interest rates, etc.
* The counselor will negotiate with your creditors to try to slow the amount of your debt.
* The consultant will consolidate all your debts into one payment, so you avoid having to deal with several creditors.
* The counselor will talk to you to know what your budget and prepare a plan to pay your consolidated debt according to your means.

Many debt consolidation companies offering professional advice for free.
Fraud Debt Consolidation

Due to increasing debt in Spain has been experiencing rapid growth of businesses dedicated to debt consolidation, so be careful if you’re going to hire one of these companies to consolidate your debts.

Unless that is the business you are in you probably wold be better off going in another direction. There is a point in the business size versus cost dynamic that makes it prudent to manage your employee 401K retirement plan in house but for now lets say you are in the category where it makes sense to farm out the management of the plan.

The most compelling reason to use an independent plan sponsor are The Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (IRC) of which each has set forth specific requirements for employers to follow when administering and maintaining their employer-sponsored retirement plans. Keeping current with these items alone can be a full time job and one probably better suited to professionals in the retirement plan field.

You can hire an independent plan trustee to perform functions like the control and custody of the plans assets, trust accounting, as well as cash management. While the fiduciary responsibility is still yours, you now have a paid professional at your side to help in the fine details of plan administration.

Knowing exactly where we spend our money we can help the one hand, to identify the degree of need for each expense, and secondly, to know in what areas we can try to reduce spending. Our intention is to reduce spending on some things not essential to spend the money to pay off other debts or charges that we have, improving our financial situation this way twice.

Monthly Plan Cost

We will make a monthly spending plan. We will try to have it ready a few days before the beginning of each month, to have time to make the occasional variations that can occur in both the expenditure and income.

Categories of expenditure

First, we will establish a number of categories of expenditure, expenses and payments as we know that we will have: mortgage, rent, insurance, gas, electricity, water, community neighbors, telephones, Internet, gasoline, maintenance car, credits and more, food, clothing, school, leisure, health, personal care … and everything we know to be paid, and add a paragraph and call Contingencies.

Expenses not covered

In this section we will attach a small amount (eg € 50 per month) to leave remaining for any expenses not covered in our spending plan.

Some of these costs are known in advance, and others not. Among the latter, try to make a forecast as closely as possible, always trying to not be very optimistic (not too much to expect lower payments.) We will be prudent and better calculate payments higher than after lower than expected result on the contrary, and falling short of our expenditure projections.

Minimum charges

You could set for other expenses such as food or clothing, that do not involve losing minimal quality of life, sufficient to live well, but try not to exceed (for example, we put a limit to food that does not involve buying short of food, but to avoid unnecessary whims or expensive designer products).

Contingencies

When we have the total amount of the estimated costs, we’ll add 10% extra, because experience tells us that there are always unexpected bills which were not expecting.
Expenditure over income

Once the estimate of expenditure increased 10% in that, confronted with our income. If they are known in advance, as often happens, there will be no major problem.

If our revenues are variable, we here also a forecast. But to be prudent, if not certainly know our income will sin of pessimists and put a quantity restraint. One method might be to use the average of the last twelve months, unless we have more data that allow us to know beforehand how much you charge so (for example, someone who charges commissions know if that month is selling a lot or little) . With experience, it will become easier to plan and to better align spending forecasts.

More revenue than expenses

If revenues are greater than anticipated costs, we will have a surplus of money, if the forecast is well done and covers all expenses, we can allocate to reduce our debt and credit. This is money that if you do not take her control will almost certainly spend in other things not necessary.

More expenses than income

If, however, incomes are lower than expenditure, we have to reduce some costs expendable, such as telephone, Internet, clothing, etc. We will have to spend less to balance the spending plan. If this situation is repeated several months in a row, it would be a good time to rethink our position and move to deeper action, such as renting instead of paying a mortgage, change jobs for better income, try to reduce consumption, etc.

When looking for a debt consolidation loan when you already have a home, comparing and negotiating may save you thousands of dollars.

You can get a home loan Lenders

* Savings
* Banks
* Mortgage Companies
* Credit Unions

Prices vary from one lender to another, so to get the best price you negotiate with several lenders.

Mortgage Brokers

A mortgage broker can also get a loan. Do not lend money directly but you are looking for a lender to drop you money.

A broker gives you the opportunity to choose among several options, as it comes in contact with several lenders, giving you a choice of different conditions for you to choose the best option for you.

You should contact more than one broker, as well as go to several banks and savings banks.

Fees for housing loans

A home loan involves various fees, but these fees are negotiable. Each lender or broker should give you an estimate of fees in advance and you should also find out the details of each fee.

Some fees are paid when you apply for the loan (like the appraisal), and others are paid at the end. You can include these costs in the loan, but it will increase the loan amount and total cost.

Once you have several bids, negotiates with which interests you most.

With the popularity of credit cards and their use becoming more common, people with debts and the amount of debt is increasing at a rapid pace.

One solution to reduce credit card debt is debt consolidation. Consolidation can carry out a loan or by transferring the debts of all the cards to one with a lower interest rate.

Example of consolidation of credit card debt

Suppose you have € 100 on one of your credit cards and the APR of the card is 18% if your debt is kept at 100 € for a year would pay about 18 € of interest. If you consolidate the debt of this credit card with a loan with a lower interest rate, or if you transfer debt to another credit card with a low interest rate, would save money.

If the loan or new credit card with an interest of 9% APR then in a year would save € 9 in interest. This may not seem like much, but if you save with a debt of € 9 100 €, think what you’d save with a debt of € 10,000, would save € 900 and if your debt is € 100,000 can save € 9,000. This saves you the amount you can use to offset other debts or pay the same debt in less time.

In our daily life, relations with financial institutions are indispensable. On many occasions we have to deal with banks or savings banks, from wages to collect our personal and mortgage borrowing. It can be said that banks in general is an economic sector clients we have to be almost mandatory.

But from the standpoint of our interests as customers, what kind of entity is best for me, a bank or a box?
Fundamental differences between Banks and Savings

We will try to briefly explain the fundamental differences between the two types of financial institutions.

The main distinguishing feature is that the savings banks are in essence non-profit entities. They were born as entities dedicated to carrying out in support of the lower classes, and currently are required by law to contribute part of their profits to social work. Therefore, the boxes do not have owners, but managers and unlisted, so it can not be acquired by private equity.

By contrast, banks are profit-making entities, and can use their profits to satisfy their shareholders and what they see fit.

The boxes have to spend at least 50% of its profits to reserves, to ensure their present and future solvency. The rest of the benefits you have to spend compulsorily Social Work in fields as diverse as culture, sports, health, heritage conservation, etc.. Normally, the boxes for between 30 and 40% to Social Work, which means they spend between 70 and 60% to reserves.

Another difference resulting from this is that banks are run and managed by a board elected by the Board of Shareholders, and the boxes are under the control of the Autonomous Community where its registered office setting, and the management bodies are elected and agreed by political representatives.

It is also true that small banks tend to be less present national banks, which can be a problem in finding offices when we travel. But large and medium boxes are already in almost all sites, after years of expansion policies of its offices.
So what is best for us, a bank or a savings bank?

Regarding this question, we can say that today we will not get more benefits or better condition in general for being a customer of a bank or savings bank.

Although initially it was true that the savings banks were specialized in household savings and small clients and small businesses today have been a change in their strategies and have become more savings banks.

In fact, the volume of mortgages and deposits, the largest Spanish savings bank Caja Madrid and La Caixa and are level with the big banks. And with the current financial market where institutions are struggling to win customers, banks and savings banks have similar strategic and financial plans, resulting in a great competition between them as to price their products (mortgages, deposits , pension plans, etc.), and also in an effort to improve efficiency, focus, speed, etc.

We can say that today there is no difference between the prices of mortgages or other loans, which charge fees or income from investment products we offer and savings banks.
In brief

We can say that the best entity for us as a customer we find by comparing all the options available, regardless of whether it is a bank or savings bank, but rather other factors such as proximity of the offices, Internet services and telephone, attendance at the state level, and in particular prices of specific services we need or pay we offer for our savings, in addition to professional treatment that we dispense (advice, speed, problem-solving ability, etc.). .

We appeal to the council therefore always stress: compare, compare and compare and then decide.