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Personal Finance and Budgeting / TIAA Woman2Woman





Instead of paying the massive amounts of interest that the credit card companies charge you can often get a lower rate of interest together with a lower monthly payment. So are credit card consolidation loans all good news? Well unsurprisingly no they aren't. As with any other financial product, credit card consolidation loans require some very careful consideration before you decide whether or not they are for you. 

It is important to remember that you are taking the existing balances of your bills and spreading them over the term of the new loan. Obviously you need to sit down with pen and paper and work out just how much that will add up to in interest. Will it be a worth while saving that you make each month on your existing repayments over how much you pay in the long term. 

There is a maturity period, after which you get back the sum you deposited along with the interests accrued. Since you are going to get your savings here in the form of interests, the concept of high CD rates becomes important. It does not take a lot of genius to understand that if you make Certificates of Deposit with high CD rates, you stand to save an appreciable amount. 

However go with the wrong credit counselling service and you'll be paying out more and for longer. To select your company you need to look out for some important points. Do they have a good record of helping people for example? Have you been referred to them by someone you know and trust? Are they non-profit or a profit making company? 

Those credit card debt facts can make truly frightening reading. And it's not just those of us in paid employment that are running up our credit card debt. Facts show that even students and the unemployed are increasing the amount they owe. So what can we do about this situation? Well the first thing to recognize is that we are all responsible for our own borrowing. 

Do you know one of the biggest reasons why people get turned down for debt consolidation? Poor credit isn't the answer! It's because they lied on their application form. It's that simple. Think about it. If you were asked to help someone out would you trust them if they lied to you? Of course you wouldn't and neither will the loan companies.