In today's economically challenged times, thousands of Americans are finding themselves struggling with financial difficulties. During a time when buying and selling homes was easier, many loans were being taken out to purchase that dream home. Today, dreams are being challenged as the financial climate in America changes. As the American dollar's value struggles to stay above water, families across the country are feeling the edge.
Should you consolidate loans or not? Examining the Pros and Cons. There are some pros and cons to loan consolidation. To determine whether or not you should consolidate loans, it's important to think long-term, not just short-term relief. Let's take a look at the pros of loan consolidation.
Pros: 1. One payment to one lender 2. Time to repay loan can vary according to what you need. 3. A lender can work with you to extend a repayment schedule 4. You can lock in low fixed interest rate and avoid the types of rates that go up each year. 5. Lower monthly payment 6. Saving extra money each month 7. No penalties for early payment of loan
Cons: 1. Although you may receive a low fixed rate on a consolidation loan now, if the interest rates go down, you're locked into your current rate. 2. Your consolidation loan may have fewer deferment options than your original loans, so you best check with your lender to see if cancellation and forgiveness options may be affected. 3. Longer repayment of loans means paying more interest over the years. 4. You might be tempted to start using your credit cards again cause you feel you're in the clear.
Student loans, credit card bills and etc. may be driving you nuts each month. Consider those credit card offers you receive in the mail. Before throwing them out in disgust, check out their interest rate and consider consolidating some of your credit into one credit card with a low rate.
However, be careful not to open a bunch of new credit lines and get caught back up in the credit trap!
Consolidate loans and pay them off with a home equity loan. This is, of course allows you to use the money in any way you like, but remember, getting out of debt is your number one goal! The interest you pay on a home equity loan is tax-deductible.
Your savings account may be growing, but so might your debt. Make a plan each month to pay off a credit card bill, or at least work toward paying it off. An extra $25 to $50 toward a debt can make a difference, but it's still a slow way to get out of debt if your credit card expenses are really high. This is where refinancing your home or a home equity loan might work best. Again, weigh the pros and cons before taking that leap.
Controlling debt
Now that you've made a decision to consolidate your loans, pay off credit cards and smaller school loans, it's time to control future debt.
Here are some things to consider:
1. Know your expenses. 2. Make a budget 3. Take credit cards out of your purse and wallet 4. Don't grocery shop when hungry 5. Don't impulse shop 6. Know what you plan to spend and when
Rewarding yourself
Paying off debts and succeeding doesn't mean you never have fun. You can reward yourself once in a while by spending a little money on something you really want and need, or going some place special for dinner or entertainment.
The key is to do such things occasionally and not get into dept doing it. At the end of the day, you'll sleep so much better knowing you're sticking to your program and no creditors are knocking on your door.
Should you consolidate loans or not? Examining the Pros and Cons. There are some pros and cons to loan consolidation. To determine whether or not you should consolidate loans, it's important to think long-term, not just short-term relief. Let's take a look at the pros of loan consolidation.
Pros: 1. One payment to one lender 2. Time to repay loan can vary according to what you need. 3. A lender can work with you to extend a repayment schedule 4. You can lock in low fixed interest rate and avoid the types of rates that go up each year. 5. Lower monthly payment 6. Saving extra money each month 7. No penalties for early payment of loan
Cons: 1. Although you may receive a low fixed rate on a consolidation loan now, if the interest rates go down, you're locked into your current rate. 2. Your consolidation loan may have fewer deferment options than your original loans, so you best check with your lender to see if cancellation and forgiveness options may be affected. 3. Longer repayment of loans means paying more interest over the years. 4. You might be tempted to start using your credit cards again cause you feel you're in the clear.
Student loans, credit card bills and etc. may be driving you nuts each month. Consider those credit card offers you receive in the mail. Before throwing them out in disgust, check out their interest rate and consider consolidating some of your credit into one credit card with a low rate.
However, be careful not to open a bunch of new credit lines and get caught back up in the credit trap!
Consolidate loans and pay them off with a home equity loan. This is, of course allows you to use the money in any way you like, but remember, getting out of debt is your number one goal! The interest you pay on a home equity loan is tax-deductible.
Your savings account may be growing, but so might your debt. Make a plan each month to pay off a credit card bill, or at least work toward paying it off. An extra $25 to $50 toward a debt can make a difference, but it's still a slow way to get out of debt if your credit card expenses are really high. This is where refinancing your home or a home equity loan might work best. Again, weigh the pros and cons before taking that leap.
Controlling debt
Now that you've made a decision to consolidate your loans, pay off credit cards and smaller school loans, it's time to control future debt.
Here are some things to consider:
1. Know your expenses. 2. Make a budget 3. Take credit cards out of your purse and wallet 4. Don't grocery shop when hungry 5. Don't impulse shop 6. Know what you plan to spend and when
Rewarding yourself
Paying off debts and succeeding doesn't mean you never have fun. You can reward yourself once in a while by spending a little money on something you really want and need, or going some place special for dinner or entertainment.
The key is to do such things occasionally and not get into dept doing it. At the end of the day, you'll sleep so much better knowing you're sticking to your program and no creditors are knocking on your door.
About the Author:
Patricia Williams will give you the proper tools to help conquer the mountain called student loans; to further educate yourself on paying off student loans checkout the overlooked tips and tricks of paying of student loans.
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