Mortgage & Loan Articles

Debt Relief - How to Beat the Debt Trap and Get Your Life Back!

Posted: 15 Jan 2009 11:57 PM CST

Being in Debt can be a very difficult and lonely place to be, and in some cases it can be a very desperate place to be. Believe me, I know, I've been there!! However, there is light at the end of the tunnel no matter how bleak and desperate your situation may seem. Debt problems are, more often than not, solved with time and effort.

First of all however, I must say congratulations. Why would I be congratulating you, you ask? Well because, you have just taken probably the most important step without realizing it. By reading this article, you have recognized that you have, or might have a money problem. I am here to guide you along a tried and tested path, a Step by Step process that will assist you with your current difficulty. It's the same process that I used and it got me out of a lot of trouble in a very short space of time.

This process will help you arrive at agreements with those who you owe money to that are manageable and affordable. But most importantly it will help you get the problem under control!

Your Situation.

There are more people than you may think experiencing problems with money. Money difficulties can effect everyone from, people on a low income to high income earners and also, believe it or not, the most wealthiest of individuals. Having money problems can effect peoples health, their relationships and their general well being. The most common reasons for getting into money difficulties can arise for various reasons. The most common reasons are:

- Illness
- Unemployment
- Relationship breakdown
- A drop in income
- An increase in expenditure
- Changes in life's circumstances
- Just not enough to go around

Please bear in mind that if you are worried about money, you are not alone. I'm here to tell you that there is a solution. The process breaks down as follows:

- Assessing the Situation
- Budgeting
- Dealing with debt
- Making Payments
- Staying in Control - Your to do List

This process is a tried and tested path that will help you take control of your money and get your life back! I go into greater detail in each and every step of the process in other articles on my blog (see below for the link)but I will synopsise each step here for the time being.

Assessing the Situation

1. List and Evaluate Your Debts

I would encourage you first of all to take some time to put together a full list of all your debts. This is a VERY CRUCIAL part of the process. When you have produced this list of everyone you owe money to, believe me when I say, it can be a very liberating experience all on it's own. Once you have a very clear picture of your financial situation you can then start to lay the foundations towards rebuilding your financial stability and security.

2. Prioritize Your debts

From your list that you have just compiled, ask yourself, what are your priority debts? Some debts are more important than others. For example, mortgage arrears, rent arrears, electricity, gas or telephone, fines and maintenance payments are all priority debts.

Then list out your secondary debts. These are debts where money has been loaned to you without you having to provide any security. For example, bank overdraft, credit cards, store cards, personal loans with finance companies, friends and family.

3. Positive Action

NOW, take positive ACTION. From the list of your Debts, make sure that you are responsible for the Debt. Is it in your name?. Then make contact with each creditor, preferably in writing, immediately. I mean right now!! Inform them that you will be in contact shortly with a formal offer of what you can afford to pay, based on analysis that you are currently conducting of your current income and expenditure.

Budgeting

There is no rocket science to preparing a budget. It's simply a plan of how much money you have coming in and how you expect to spend it. Budgeting is very important so that any promises of repayments you may make going forward to the people you owe money to should be achievable and something that you can stick to.

Dealing with the Debt

Check back to your list of priority Debts and deal with them first. Then check back to your list of secondary Debts and deal with them next. Guided by your budget, decide what to offer each creditor. Then write a letter to each one detailing your offer of payment. You should attach a copy of your financial statement to illustrate that what you are offering is realistic and affordable based on your current circumstances.

Making Payments

The KEY now you have everything under control, is to STAY in control. Find the cheapest and most convenient way to pay as many Debts as possible when you receive your weekly/monthly income. Chose a method that is less time consuming. Do if possible, set up an account where you can deposit an amount weekly/monthly to pay all your utility bills and other credit agreements.
If you miss a payment do contact your creditor immediately. Give the reason why you had to miss the payment and undertake to make it up in full on the next payment date. At worst you can try to spread it over the next few payments.

Staying in Control - Your To Do List

- List all your debts on a piece of paper
- Divide your debts into primary and secondary debts if you have not already done so
- Check that you are responsible for the debt. Is it in your name?
- Identify the debts needing your immediate attention
- Preferably write, but do contact immediately those to whom you owe money
- Fill in a budget as accurately as possible
- Take your expenditure from your income to see what you can afford to give to your creditors
- Decide how much you can afford to give to each creditor
- Write to each creditor making the offer of the amount, and only the amount, you can afford
- Choose a method of payment that best suits your situation and is acceptable to your creditor
- Put that payment method in place
- Activate it by forwarding the amount you offered and can afford to your creditor

Getting back on top of money issues does have its difficulties. This path is designed to help you manage these difficulties, overcome them and gain control of the situation. All of the recommendations in this plan are free for you to adopt. They will however, necessitate an investment of your time and will require you to take ACTION. These problems will not go away and will become harder for you to get under control the longer you let things drags on. Take action NOW and get your life back.

Basis For the Cheapest Personal Loan Rate

Posted: 15 Jan 2009 11:54 PM CST

In the financial world, there are many factors that contribute to what we perceive is the cheapest personal loan rate. This perception differs from individual to individual, and even from lender to lender. Each situation may differ, and as such, the lender may have to apply a different set of criteria to each individual application. Unfortunately, in the financial world there is never one set of rules that will apply to every situation, so you have to look at each one on its own merit.

Secured or unsecured loan

One of the first factors the lender may need to determine is whether, based on the information he sees on the application, you qualify for a secured or unsecured loan. Of course, at this stage of the loan process, he is only making a guess because until he does the credit investigation and sees your credit score, he will not know if you qualify for the cheapest personal loan rate, or if you qualify for an unsecured loan.

This does not diminish the need for good credit by any means because without that, you would likely be subject to much more scrutiny. However, if you have recently begun establishing or re-establishing credit, that is going to have an effect on the credit score, and thus, may influence the lender?s decision in regard to how much credit he is willing to extend without security.

Other influential factors

The financial criteria that each lender uses vary from lender to lender, and even from lending officer to lending officer. This makes it difficult for the potential borrower to get a feel for what he can expect, but when a lender is ready to make the final decision, he has to use his instinct to make a final decision since most borrowers will not have excellent credit and five or more years with the same employer.

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