Can debt consolidation be bad for you?

Can debt consolidation be bad for you?

Have you taken out any unsecured loan like payday loan, credit card loan, etc.?
Then most likely you are getting exhausted of managing your debts and paying off your bills on time!
Usually, these unsecured loans often come with incessantly high APRs (Annual Percentage Rates)! And these APRs make paying off unsecured loans more cumbersome!
Well, it’s quite impossible to have a single payment date for all your debts! As a result, you might be slogging to remember all your payment dates and make timely payments as well!

What if you get relief from all these headaches?

Yes, you can certainly opt for debt consolidation to get rid of all your debts. You might have heard about debt consolidation from your friends, relatives, or any financial advisor!

But, are you aware of the ways of debt consolidation?

Let’s have a look!

  1. Debt consolidation program:

    In a debt consolidation program, a consolidation company negotiates with your creditors on your behalf to reduce the high APRs of your loans.

    You can consolidate all debt into one monthly payment till the time you completely pay off your debt(s). But remember, the consolidation company will charge you for their professional services!

  2. Balance transfer method:

    It’s one of the most effective credit card consolidation options!
    This method allows you to transfer all your high-interest credit card outstanding amount to a new credit card with a lower interest rate!
    In fact, you will find some balance transfer cards which offer 0% APR for a certain time period!

  3. Consolidation loan:

    It helps you to consolidate all your existing debts into a single one. Moreover, it helps you to pay off your multiple debts with a lower interest rate and fewer monthly payments!

But, is debt consolidation a good idea for you?

Because debt consolidation can be bad for you in some scenarios!
Yes, you heard it right! So, before you proceed, first check out 10 important facts about debt consolidation!
Let’s start with the scenarios when debt consolidation can be a bad idea for you!

1 You are not been able to control your spending habits

Debt consolidation can imply false financial security that you have already paid off all your debts. But that’s not the truth! You have to go through the full payment process to get rid of your debt trap.
After you complete paying off your debts at reduced APRs, your creditors mark those debts as “paid in full”.
But if you think that you have already paid your debts, it might intrigue you to look for new credits! And eventually, you remain trapped with your debts!
So, if you are unable to control your spending habits, learn how to stop wasting money to keep your finances on track!

2 You are considering debt consolidation as the silver bullet for your debt related problems

In debt consolidation, you have to negotiate with your creditors to reduce the high APRs of your debts. And if they agree, you can save some dollars on your interest payments!
But let me tell you, you have to remember the payment dates for your different debts still now! So, what can you do for that? Should you hire a professional to clear debts or do it yourself?
You can approach a debt consolidation company, which will negotiate with your creditors on your behalf! The biggest advantage would be making single monthly payments to the debt consolidation company, which in turn will distribute the money among your creditors.
But, you have to remember that in debt consolidation, only the APRs will get reduced keeping the principal amount the same!
So, what if you are going through a financial crunch and unable to make monthly payments even with a reduced APR?
In that case, debt consolidation won’t be apt for you! So, depending on your financial status you can opt for either debt settlement or bankruptcy for getting rid of your debts!

3. You don’t have a steady income

Yes, if you don’t have a stable source of income, you should stay away from debt consolidation! It doesn’t matter how you are consolidating your debts, i.e., doing it yourself or through a debt consolidation company.
At the end of the day, you have to make monthly payments either to your creditors or to the debt consolidation company.
So, opting for debt consolidation if you are currently unemployed or not having a steady income can be a bad idea for you!

As of now, you have come across some of the scenarios where debt consolidation can’t be a good option! But you will find ample situations where debt consolidation can be your sole savior

1. You are committed to getting out of debt(s)

Finally, you have decided to get rid of your debt trap! But you need to be a strategist to pay off your debts with ease and getting debt free!
For example, you can opt for debt consolidation, which is one of the fruitful debt relief options.
In debt consolidation, you pay off your loan amount in full but with a reduced APR! As a result, your creditors mark those debts as “paid in full” on your credit report! And eventually, your credit score gets improved with time!
However, if you are approaching a debt consolidation company, always look for the genuine best debt consolidation companies near you!

2. You are unable to manage different payment dates of your debts

When you have taken out multiple loans, it’s quite obvious that the payment dates are different!
To err is a common thing for humans! Sometimes it might happen that you miss the payment deadline. And as a result, you have to shell out more from your pocket for paying late fees or penalties!
But if you opt for a debt consolidation program, you have to make a single monthly payment to the consolidation company. The concerned company, in turn, will distribute the money among your creditors.
As a result, you don’t have to remember payment deadlines and thus bracing yourself from the huge late fees and penalties!

You get relief from incessantly high APRs

Usually, the unsecured loans have very high APRs and eventually, it becomes very tough for you to pay off!
But through debt consolidation, you can negotiate with your creditors to reduce the APR and pay off your debts with ease!
And if you have approached a consolidation company, they will negotiate with your creditors on your behalf to reduce the high APRs.
Moreover, you get the benefit of making single monthly payments to the consolidation company for all your debts rather than making different payments.
However, always remember that these services of a consolidation company comes with a professional charge which you need to pay!

Well, I hope that you aren’t confused anymore! Because it depends on you, your situation, whether or not debt consolidation will be apt for you

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Why and how can you invest in your health?

We all desire for a long and healthy life which is free from all the obligations. Therefore, investment in health is a major concern. It is because each one of us is aware of the medical implications that we may have to deal with in case our health suffers. So, health investment is crucial, both for you and your family. Once you follow the right strategies of investing in your health, you’ll stay healthy; in turn, it’ll help you save money.

Why is it important to invest in your health?

There are many benefits of investing in your health. Have a look at the benefits:

  1. Rising medical costs can harm your savings

Are you aware that the medical costs are soaring to new heights these days? In the past 10 years, the basic hospitalization cost has increased significantly. So, think how costly will the medical procedures be after a few years? Won’t you find it difficult to handle all the expenses?

Chronic illnesses are on the rise and have increased over the years. These diseases alone are responsible for about 85% of healthcare costs. Almost half of all Americans have such diseases.

So, it is important to invest in your health right away so that you can stay healthy.

  1.  Medical insurance can be expensive in the future

Health care bills can occur anytime and individuals who have insurance can pay for it without facing problems.

So, it is very much required to have an adequate health insurance policy. However, you will have to pay less if you are healthy.

  1. You can keep your emergency fund intact

If you are in dire need of an expensive health check up or a costly operation, then emergency fund can come to your help. You can use your accumulated emergency fund to tackle such a crisis. Even if you have medical insurance, you have to make copayment.

So, if you’re healthy, you can keep your emergency fund intact, which have taken years to build.

7 Quick and smart ways to maintain a healthy lifestyle

Here are some of the quick and smart ways by following which you can maintain a healthy lifestyle.

  1. Purchase meat locally

Buying local meat from the farmer is a practice which has become popular over the last few years. It is also available at weekend farm markets in many metropolitan areas.

When you buy items from a farmer, you get to choose the cuts of meats you want and how it should be packaged. If you are looking for something organic and grass-fed meat, you can usually find that as well. Since you are paying a single amount per pound, it is obviously cheaper than buying meat from the store, especially if you have a thing for steaks and roasts.

  1. Do regular exercise

Think about “How can investing in my health improve the quality of my life?”. Experts say that the only way to healthy living is to exercise daily. Exercising can remove all the lethargic elements from the body and can make you rejuvenated.

You can do things on your own instead of visiting a gym. For instance, if you don’t have time for workouts each day, find ways to incorporate a little bit of exercise into your regular life. Gyming can also increase vitality and stamina in your body. A long walk can be a refreshing step to de-stress.

Investing in exercise and gym related activities are the best ways to make healthy choices.

  1. Sleep well

Getting proper sleep of about 8-9 hours is important. It means ensuring that you are getting the right REM (Rapid Eye Movement) sleep so that your body is in a position to heal itself. There are various ways in which you can start hacking your sleep. You should not aim to focus on tackling all of the ways to improve the quality of sleep. Try out one or two options and give those a try for a few weeks.

  1. Shop for fresh veggies

Shopping for fresh veggies is a healthy step you can take to improve your lifestyle. Make sure you don’t have to compromise on skimping the taste or quality. For your comfort, you can even get a single-serving or single-meal pack that microwave quickly; so there’s no excuse about going without veggies.

  1. Buy the insurance cover of your choice

Be wise as you can save money while buying an appropriate health insurance policy.

As there are lots of health insurance agents selling health insurance policies, there are things to consider when buying for one. Take the time to review your options; , make sure that you buy a healthy plan that covers the cost of your preferred doctors and get to know how government subsidies work.

Another thing, having the lowest deductible may not fit well for the game. Honestly, if you are healthy, a higher deductible might be helpful to you. It means that your monthly payment will be lower.

In this way, you will be completely satisfied about your insurance plan.

  1. Remove harmful addictions

We are relying more and more on medicines to achieve instant health satisfaction. Everyone wants to take that magic capsule to lose weight or want to dehydrate themselves. Such an obsession can be harmful for your health. It can lead to a sudden medical expense and may put you in a state of anxiety.

Remember that small changes matter. If you wish to lose weight and remain healthier in the long term, you must build a healthy diet and practice good habits to save money.

  1. Try balancing

Irrespective of what amount  you are earning, what’s required is to balance the work and health.

How can you achieve that? Well, you can take small steps such as prioritizing your time, doing exercise, taking shower twice in a day, and of course by maintaining a healthy diet plan. Doing so can make you a balanced person.

The bottom line

Being overweight can give rise to a number of health-related problems.

Losing weight and lowering the risk of a health condition can definitely add a number of years to your life.

A good health is, after all, the most precious gift we have in today’s world.

Posted in why

Why is credit score so important for you?

Human society is adopting modernistic ways to deal with day to day financial matters. This is the reason why many people constantly have to check their personal credit report and credit score to determine what actions could be taken in the future.

Nowadays, more and more businesses are emphasizing on having good credit before extending their products or services to the consumers

Before getting into the details of why credit score matters, let’s get a clear idea of what credit scores and reports are.

What is a credit score?

A credit score is a three-digit mathematical number which evaluates an individual or a corporation’s credit history and the capability to repay financial requirements.

Essentially it is the numerical representation of your financial behavior, which evaluates your creditworthiness.
Generally, the score runs from 350 to 850 and it varies based on the scoring formula.

Credit problems may arise if your score is below 650. Your credit score matters because when it is lower, the chances of getting into the debt is increased. Moreover, creditors can get suspicious about whether or not to accept your loan request. When your credit score is higher, you can take out credit and loans at better terms and conditions.

What is a credit report?

A credit report contains information about the way you manage your credit and debt accounts. It has information related to how much debt you owe, how the bill is paid, where you reside, where you work, and whether or not you’ve filed bankruptcy, whether or not you have your home foreclosed or the vehicle gets repossessed, if you have a lawsuit judgment against you.

It would come as a surprise to you that your credit report contains lots of information and especially that your annual credit report can be over 100 pages long.

Business organizations might be interested to use your credit reports to determine if you should be offered an insurance; rent a house or apartment; provide you with internet, cable TV, utility or cell phone service. A credit report is also used to study the employees’ condition as the company may make employment decisions about you.

6 Reasons why your credit score is important

Here are the reasons why your credit score is important and you should work towards improving it.

a. Get low insurance rates

If you have a higher credit score, the lower can be your insurance premiums for house and car. It’s that simple. In some states, insurance companies are not allowed to tie the insurance rates to the credit scores. It is advisable to keep your credit score usually high so you can manage to keep the insurance premiums low and enjoy better terms and conditions on your future loans.

b. Earn credit card accolades

An excellent credit score can help you get some of the best credit card rewards. And using these cards won’t cost you much. Some of the rewards include bonus points on credit cards, free hotel stay on the account, and rewards may help you make the credit card payments.

c. Refinance your mortgage at a better rate

Everyone plans to be debt free when they want to retire. Refinancing can help you manage your mortgage and pay it off early. However, if you have a good score, it’ll help you take out a refinance loan at a better rate of interest.

d. Enjoy better borrowing opportunities

At some point in life, we all need to borrow money to buy things. If you want to buy a house, you will definitely need to borrow money. Most people borrow money to buy a car.
So, a good credit rating can not only save you a thousand dollars but also make the borrowing process simple and easy for the debtor and at the debtor’s best interest.

e. Better employment scope

Potential employers may do credit checks as part of the hiring process. If you have been reckless in your financial responsibilities, a prospective employer might not hire you. For example, the employer might believe your debt level can be very high for the salary offered. Some employers also check credit scores before giving a promotion or raise, especially for various financial positions.

f. You can save on monthly bills

It might come as a surprise to you that your credit is required to establish utility service. Your electricity company deals with you when you borrow one month of electric service. So, before offering the electric service, the company foresees whether or not you have a good credit This implies mostly to utility services including water, telephone, cell phone, and even cable services.

How are credit scores useful?

Usually, banks and credit card companies use the credit score to evaluate whether or not it’s risky for the organization to grant a consumer’s credit or loan request.
Lenders use credit scores to control things such as who qualifies for a loan and at what interest rate, while telecom companies, insurance companies, landlords, and government agencies utilize credit scores to predict risk.

What could happen if you have a low credit score?

A 2012 study conducted by the society for human resources management revealed that about 47% of employers use credit checks while hiring employees.
Mobile phone providers also run credit checks. In a worst-case scenario, there are almost half of all Americans who don’t qualify for mobile deals advertised.
Landlords do see your credit score before giving out the place to rent. So, a bad credit score can mean that you will have to struggle in finding a good apartment. In addition to that, landlords might request higher deposits or upfront rent payments if your score is low.

How can you raise your credit score?

If you are experiencing a low credit score, then it’s time to introspect and emerge out of the situation as fast as you can. Some actions which can help will include using a credit card responsibly, paying every bill on the due date, maintaining a low credit utilization ratio, and being conscious about when and how many new accounts you can open over time.

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