Consolidate debt

While it’s true that there are many avenues of varying shapes and sizes to building wealth, there can be little argument that a lifestyle chalked full of overspending and high-interest credit card debt is the kiss of death when it comes to wealth building.

Flush from the last decade of capital appreciation as a result of one of Canada’s longest running real estate booms, homeowners are taking advantage of their accumulated equity to complete debt consolidations at a record pace … or at least they should be.

With mortgage rates down over 0.50% off of their recent peak, and expectations set for a further reduction in fixed rates and a future lowering of prime, it makes more sense than ever for those “over-indulgers” to engage in a debt consolidation and improve their overall cash flow positions.

While most credit cards carry interest rates in the 10 – 24% range, comparable mortgage rates are in the 4 – 5% range at the moment. Unfortunately, far too many Canadian’s continue to spend beyond their means and accumulate ever-increasing monthly payments.

Making only the minimum payment on one’s obligations is great to maintain a healthy credit score, but elongates the time in which it will take to pay off those debts. The more principle that can be applied to the payments, the lower the overall cost of borrowing and the higher the savings of interest in the long-term.

When considered over the long term, a secured debt consolidation and the resulting cash flow improvements can be the key to building long-term wealth. With proper debt roll-down strategies and mortgage amortization tips, an educated consumer can take control of their financial future and begin to increase their overall wealth.

Don’t forget that there is a difference between “good debt” and “bad debt”, with the former helping you to build wealth (eg: RRSP loans, investment property mortgages, etc …) and others holding you back (Credit cards, high-rate personal loans, etc …)

By: Barry Byers

Fed up with payment credit card and loan repayments left, right and center? If you have a number of credit card debts and loan balances you can save yourself hours of stress and a large amount in interest repayments by taking advantage of debt consolidation loans.

Consider a debt consolidation loan. This type of loan is used to pay off all your existing smaller debts and wrap it into one easy to manage loan. In most cases, the payment on that one loan is lower than the payments on all the other items that you consolidated. Here are a few tips for ensuring you get the best deal make the best use of this tool.

First, remember, this does not eliminate your debt. Only you can do that. But a debt consolidation loan can help you reach that goal faster. Shop around for interest rates and terms. Approximately 70% of consumers just take the first deal that comes their way, and the vast majority of those people do not read the fine print. Guess what? That’s the fastest way to land in more trouble. Shop and compare, read the disclosures, and never take a deal with a pre-payment penalty.

Consider a credit card balance transfer offer. Used wisely, these can give you a huge step forward in your debt consolidation plan. Again, compare offers and read the fine print. Try to find a 0% offer, but remember that there are almost always balance-transfer fees and sometimes annual fees associated with most deals. Rarely are even 0% offers truly free. The card charging the highest interest should be transfered firstthe original card and the balance transfer card. Take them out of your wallet, lock them in the safe deposit box, freeze them in a bowl of water, or cut them up. Under no circumstances use either card, period. If you start purchasing again, you’re digging yourself a deeper hole.

Set up automatic payments to the debt consolidation loan or balance transfer card. Make sure the automatic payment covers at least the minimum monthly payment, and will arrive well before the cut-off date. This will ensure you never have a late payment and pay at least the required amount. Send additional payments as often as possible.

Put up a Post-It note on your fridge or in your wallet to remind you of your debt. Yes, you can take it down when company comes, but be sure to post it back up when they leave. This is a way to keep your debt “real”. It’s all too easy to hide away from debt and pretend it doesn’t exist but it will always catch up with you. As you make payments, check the new balance online. Cross out the old (higher) balance, and write in the new (lower) balance. This is a great way to keep giving yourself positive feedback. And it’s fun to watch that balance dive like a submarine!

If you make a balance transfer, set a reminder for one month before the end date. When you get to that point, start shopping around for a new balance transfer offer or a low-rate card, and transfer the remaining balance which is hopefully much smaller!

Balance transfers and debt consolidation loans are tools that can help you manage your debt at a very low cost to you. But those tools have a sharp edge, so use them wisely!

By: Rich Greenwood

Debt consolidation is quickly growing in popularity in California, as an increasing number of Americans are realizing the potential savings a debt consolidation loan can provide. Hight interest credit card debt, and other bills, can lead to an endless cycle of debt, interest, and stress. A debt consolidation loan can lower your interest rates and monthly payment, leaving you with more time and money to work towards eliminating, permanently. So, how much can a debt consolidation loan save you?

Getting Started with Consolidation

Getting started with debt consolidation can be a little overwhelming. There are literally hundreds of lenders out there, and they are all claiming to have the best rates and terms. However, as you can probably guess, a lot of them don’t have the best of intentions. What you need to look for is a company with a proven track record for helping clients get out of debt.

So how do I decide on a lender? Good question. The first thing you should do is request some free quotes from a few lenders, just to see exactly how much you will be able to save with a debt consolidation loan. If you decide that debt consolidation is right for you, which it probably is, you should go ahead and request a few more quotes from other lenders. The more quotes you get, the more confident you can be that you are getting the best possible loan.

Compare Several Lenders to Find the Best Loan

With so many banks and lenders claiming to have the best rates and terms for their loans, it is important that you shop around and obtain quotes from several lenders before settling on any one particular lender. Online quotes are usually free, so there is really no reason not to compare as many lenders as you can. The more research you carry out, the more confident you will be when you sign away your debts with a debt consolidation loan.

By: Zach Ford