Life Saver: Debt Consolidation

The rich rule over the poor, and the borrower is servant to the lender.

Don't go in the sea of debt that far, that either you have to choose slavery or bankruptcy. Under the huge burden of debt, either one will go on paying the debt for years, due to increment in interest rates, or have to file for bankruptcy. Both the cases cause immense damage to the individual's credit score and makes mentally depressed. Don't drown yourself in debt ask for lifesaver, ask for Debt Consolidation. Debt Consolidation helps to save your money, so that you can swim out of debt. Debt Consolidation as a life saver not only helps you to swim out of debt with ease but also improves your credit score with time. Debt Consolidation helps the debtor by lowering the interest rates of consolidated debts and bills and lowered monthly payments. It provides lot of flexibility to the debtors so that they can easily swim to the shore.

Five Steps To Become Debt Free



1) "A hundred wagon loads of thoughts will not pay a single ounce of debt" - One has to accept the fact, at right time that he/she is in debt and act accordingly. If not attended properly the situation will worsen with time.

2) "A man in debt is so far a slave" - Stop being slave to your debtor and take professional help. Too many public opinions may confuse you. By seeing your situation (incoming and outgoing finance) they can better tell, whether to take financial help or not.

3) "There is something called Free Debt Counseling" - There are different kinds of Debt Consolidation program. One single kind of program can't be applied for all the debtors. The programs vary on the amount of debt, tenure of payment, debtor's income and various other factors. Various Debt Consolidation Companies provides free Debt Counseling to the debtors and suggests a program which suits best to their situation.

4) "Pay every debt as if God wrote the bill" - After you have enrolled in any Debt Consolidation program make the payments on time, to avoid any kind of late fees or fines. Default in payments should be avoided, in order to get rid of the debt soon.
In case you choose Debt Settlement, you'll have to stop payments to your creditors and make monthly payment to the settlement company. The payments accumulate into lump sum cash after months. The lump sum amount is then paid off to the creditors/collection agency.

5) "Never spend your money before you have it." - Put a check on your expenses, say no to any kind of fresh loan or debt unless and until its emergency. Any new loan would worsen the situation and delay the debt payment. Expense in control would lead to debt in control.

Hooray, there you are on the shore alive and safe, free from the clutches of debt!

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Govt. Vs. Conventional Loan

Govt. Loan -- Government or Federal loans can be availed through different government programs where you can pay off multiple debts by consolidating them into a single loan instead of paying off each one individually. As government bodies are non-profit making they understand the needs of the customers. They aim to fulfill the needs of the citizens. There are some people who believe that you should get a government debt consolidation loan to pay off multiple debts. Most individuals who qualify for these types of loans are consolidating student loan debt, not personal credit card debt. Other government debt consolidation loans are usually reserved for corporations and small business.
Government agencies such as the FHA, the FmHA, and the VA can insure or guarantee loans. The FHA is a part of the Department of Housing and Urban Development and insures residential mortgage loans made by private lenders. The FmHA provides financing to farmers and other qualified borrowers who may have trouble getting loans. VA loans are for veterans or members of the military and can have a lower down payment.
Under government consolidation loans there are four types of plans namely standard plan, extended plan, graduated payment plan and contingent repayment plan.

Advantages of Govt. Loan are:-

1) Very low or no down payments, like for student loans.
2) Low monthly mortgage insurance.
3) No credit score requirements.
4) Low closing costs.
5) Can qualify for a loan, two years after bankruptcy.
6) Can qualify for a loan, three years after a foreclosure.
7) Typically one isn't required to pay a fee to initiate the loan.
8) One need not pay the extra charges such as fees or other hidden charges.
9) There are no penalties for prepayment.
10) The terms of repayment are also flexible.
11) One can avail the facility of deferred payment.
12) One can also avail discount under certain circumstances such as paying through auto-debit plan.

Disadvantages of Govt. Loan are:-

1) Govt. loans aren't available for personal credit card debt.
2) Huge amount of loan can't be availed.
3) Depending on one's specific situation, govt. loans might not be available to everyone.

Conventional Loan -- Conventional loans were the first traditional mortgage loans made by local lenders. A conventional loan is any mortgage which is not guaranteed or insured by the federal government. Loans not guaranteed or insured by these agencies are known as conventional loans. These loans adhere to Fannie Mae guidelines. Fannie Mae, or Federal National Mortgage Association, is a corporation created by the federal government that buys and sells conventional mortgages. It sets the maximum loan amount and requirements for borrowers.

Advantages of Conventional Loan are:-

1) Lenders may be more willing to negotiate or eliminate certain loan fees.
2) The lender may allow to choose the kind of collateral.
3) A lender may be willing to finance for personal property (such as appliances and furniture) with the real estate loan.
4) Lenders may be willing to keep the loan in their own lending portfolio, thus allowing more underwriting flexibility because the loan will not have to meet secondary market guidelines.

5) If the loan is held in portfolio, appraisals will only need to meet the lender's guidelines (or the secondary market's if the loan is sold), instead of the strict appraisal standards of the Federal Housing Administration (FHA) and the Veterans Administration (VA).
6) If a borrower has difficulty obtaining Private Mortgage Insurance (PMI), the lender may self-insure the loan, increasing the interest rate of the loan to compensate for its greater risk.
7) For the cash-short borrower, the lender may be willing to fund a portion of the closing costs in exchange for a higher loan interest rate.
8) If the loan is to be held in portfolio, the lender may allow some creative financing options for the buyer.

Disadvantages of Conventional Loan are:-

1) These typically require larger down payments.
2) Interest rates are set by each lender and can exceed those of FHA and VA loans.
3) There is initiation fee for such loans.
4) Initiation fees and other costs are also determined by individual lenders and may therefore be higher than those of other programs.
5) Because mortgage documents for conventional loans can vary by state and even by lender, the lender could specify that certain clauses be included in a mortgage contract; for example, alienation (due-on-sale), prepayment penalty, or acceleration clauses.
6) Loans with greater than an 80 percent loan-to-value (LTV) ratio will require the borrower to purchase Private Mortgage Insurance.
7) Some lenders may require that the borrower pay nonrefundable application or processing fees at the time of loan application.
8) The lender may not allow some creative financing options for the buyer.

The applicant must choose any plan based on his own need. Before enrolling to any program be careful not to choose the wrong program plan.

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Earn Easy Money Through Affiliate Marketing

Affiliate marketing is one of the easiest ways to make money online. There is a merchant who wants to sell his products and services through internet, and at the same time there are affiliate marketers who help the merchant to sell, by advertising their stuff on their website or through other measures.
Affiliate or publisher is the person, who advertises the product on behalf of the merchant. Therefore this involves the merchants and the affiliates who work out a mutual platform and the revenue is shared. They are connected by an affiliate program. When a marketer successfully helps the merchant to sell an item, the merchant will pay the marketers some commissions or share of revenue.

Affiliate marketing is an excellent way to earn money while at home.

Currently the booming sectors in affiliate marketing are adult, gambling and retail sectors. Close on its heels are the mobile phone, finance and travel sectors. With the trend already used popularly in the B2C marketing and the trend is picking up in the B2B Marketing sector also.

Since an affiliate marketing relationship is a win-win situation for both the Merchant and the

Courtesy: Flickr.com

Affiliate, the affiliate also enjoys many benefits.

Couple of them are below:

1) One need not design or manufacture any product, so no need of infrastructure investment also.

2) No start-up cost, since most of the Affiliate Programs are free to join.

3) There are thousands of products and services to choose from. Though its advisable to choose product or service, relevant to one's site.

4) Affiliates needn't care about customers and their agonies.

5) Since no product manufacturing, so no need of inventory and lock up your money.

6) No merchant or account worries.

7) No prior sales experience is required to start Affiliate Marketing.

8) No need to sign any contract with the merchant.

9) Affiliates can do their business sitting in any part of world.

10) Flexible working hrs., with no tension of family and kids.

11) No office rules. You can be your own boss.

12) No shipping of products.

13) Affiliates can join end number of merchants and can dump them if the products chosen by them are not making money.

14) No sales target to be maintained.

15) Loads of money can be earned, with minimum effort.

To Be A Successful Affiliate Marketer:

To become a successful affiliate he should have enough internet marketing knowledge. He should choose the products carefully and plan accordingly how to market those. A strong and efficient back office administration is required to keep the online databases organized. He has to aggressively drive traffic towards the selected products or services for higher sales!

Hi viewers do let me know if I've missed on something. :)

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Difference Between Debt Consolidation and Debt Settlement

Debt Settlement (DS) --> It is a process, which involves negotiating with your creditors to settle your debt for amounts significantly less than you currently owe. People not able to bear the burden of huge debts anymore or on the verge of bankruptcy are advised for debt settlement.

Debt Consolidation (DC) --> It is a process in which all the bills and debt whether secured or unsecured are combined together into a single payment, usually resulting in lower monthly payments. Often debt consolidation involves many unsecured loans (such as credit card bills, medical bills, etc.) into a single payment but with collateral backing it up. This is then referred to a secured loan. There are two types of programs under debt consolidation, i.e. Debt Consolidation Service and Debt Consolidation Loan.
a) Under Debt Consolidation service, debt solution companies negotiate with the creditors to lower down the interest rates and monthly payments.
b) Under Debt Consolidation loan, a lower interest loan is provided to the debtor in lieu of multiple high interest loans and bills, in order to pay off his debt quickly.

Lets come to the differences between Debt Consolidation (DC) and Debt Settlement (DS), which are given below:

1) In DC debt isn't reduced, it remains the same, only interest rate is reduced, but in DS debt is reduced to substantial level and also the interest rate is reduced.

2) In DC interest rate can be reduced to 50-75% depending on the debt, whereas in DS the interest rate can be reduced down to 40-60%.




3) In DC though the rate of interest is reduced, one has to pay the whole amount, but in DS once you repay 40-60% of your outstanding dues, you're legally out of debt.

4) In DC the credit score of the debtor isn't affected and in some cases there is a positive impact on it, if the bills are paid on time, on the other hand DS can severely damage one's credit score.

5) In DC all the secured and unsecured loans are combined together into a single secured loan, which are associated with collateral. So in case debtor fails to pay the loan he has to loose his property. But in DS creditors are at constant risk in loosing their money.

6) Usually, you can be out of short term credit card debt consolidation in five years or less but in DS the payment period is more.

7) If good credit manners are maintained a debtor with DC can apply for fresh loan and can get it, but a person with DS will affect their ability to get credit at favorable interest rates for couple of years. In fact, the Fair Credit Reporting Act states that negative information must remain on a credit report for a minimum of seven years.

Now its upto debtors and also depends on their financial position which plan to go for.

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