Debt consolidation loans for the unemployed are similar to the regular personal loans; only that a few alterations are made to suit the unemployed people. Are the unemployed people complaining? No, since they would not have been able to get a regular loan from any of the high street banks. Certain loan providers may have used this as an opportunity to trick borrowers into paying a high rate of interest.

Is the borrower insulated from such trickery when using debt consolidation loans for unemployed? Yes! A borrower can easily get information on prevailing rate of interest from loan experts. The loan experts will also educate borrowers about what to expect and what not to expect on debt consolidation loan for unemployed. Therefore, borrowers planning to take the loan can differentiate between a competitive deal and a not so competitive deal.

Borrowers must expect a high rate of interest on debt consolidation loans for unemployed. Two sets of bad credit remark are present on the credit file of unemployed. Firstly, the borrower is unemployed. Secondly, the borrower has accrued a large number of debts, which may transform into defaults, bankruptcy etc. The risk involved in dealing with the unemployed people is thus larger. This is the main reason for an increase in rate of interest in debt consolidation loans for unemployed.

Before you agree to take debt consolidation at the stated rate, it will be essential that adequate comparisons have been made. You may be unnecessarily filling the coffers of the loan provider by paying a higher rate of interest.

Use of collateral can help bring down the rate of interest by few points. Collateral is any asset on which borrower gives loan provider a right. For instance, if debt consolidation loan for unemployed has been taken against ones home, home is the collateral. Loan provider enjoys right or lien on house. He has the powers to demand liquidation of house to recover loan proceeds. This is in the event of non-repayment of loan. Until then borrower is free to stay in the house and of course pay taxes and other dues on house as earlier.

Another expected feature of debt consolidation loans for unemployed is the relatively low amount that is offered. Had it been for a regular loan, borrower would have obtained a much better amount. However, since the risk involved in lending to the unemployed people is larger, loan providers are not very generous in lending. Proper search can however help one find loans up to ones desired amount.

The proceeds of the debt consolidation loan for unemployed goes towards settlement of debts. As in debt consolidation loans from high street banks, debt consolidation help may not come free. However, if borrower feels that he lacks the necessary expertise to settle debts successfully, then they can contact IFAs. Independent financial advisors offer professional and independent advice. Their advice will go a long way in clearing the debt load from the borrower’s shoulders.

Repayment of the debt consolidation loan for unemployed will depend on several factors. When debt consolidation loan for unemployed is secured on ones home, borrower has the chances of gaining term of repayment for as long as 25 years. The minimum term for which the debt consolidation loan is available is 5 years. Depending upon ones requirement, borrowers can either stretch the term or constrict it down.

• You have begun charging to a credit card essentials like food, and daily expenses
• You make only minimum payments on your charge accounts each month
• You take cash advances from your credit cards for incidental expenses
• You are at the limit of your credit cards, or have too many cards.
• You are unsure how much you owe creditors

If you answer YES to most of these questions, it’s time to regain control of your finances. Don’t let problems from your past affect your ability to secure credit in the future.

Our exclusive “Debt Management” program will not only give you back control, it will save you time and money. So Don’t wait, take the first steps, to regain control.

Consumer credit counselor charges what seems like a relatively small fee but over time it adds up to costing you more than a debt settlement program. What you are not told is that the Credit Counseling companies act as a surrogate of the Credit Card Company. They make most of their money from “donations” from your Creditors based on the amount they “collect” from you while in the program. This is an arrangement very similar to the way collection agencies are paid by creditors. Since credit counseling companies rely on payments from the credit card companies, they do not truly represent the consumer. However, there are good credit counseling companies out there and credit counseling may be the right option for you if you do not have a true financial hardship — research them carefully to make sure their services make sense for and that you can afford to make payments under the credit counseling program.

The downside to credit counseling is as follows:

• In a Credit Counseling program you pay the full amount of debt owed and sometimes the interest rate is lowered only nominally or not at all on average 11%.
• Credit counselors don’t always make timely payments resulting in late fees and a derogatory credit history.
• Not all Creditors will agree to reduce your interest.
• Payments are still high and it typically takes 5 or 6 years to pay off the debt.
• In order to pay off your debt in full, credit counseling monthly payments are usually equal to or greater than the minimum payments you were making on your credit cards.
• Most Credit Counseling programs have a high failure rate. Their own industry estimates approximate a 21 - 26% completion rate.
• Many of these companies are funded by your creditors - the very people to whom you owe money - and thus, they must demonstrate some loyalty to the creditors.
• Despite claims otherwise, credit counseling may appear on your credit record. This is viewed negatively by most lenders and may hinder your ability to refinance a home or get a loan.

The Credit Counseling Alternative

If you’re experiencing financial difficulties due to overwhelming debt, if creditors are calling and you think you have nowhere to turn, there is an alternative to credit counseling—debt settlement through A1 Financial Management Services.

Simply fill out our easy contact form today. One of our experienced debt consultants will be more than happy to tell you more about how we can help resolve your financial situation through one of our exclusive debt settlement programs.

The consultation is free and there’s absolutely no obligation.

Lower Debt

The goal of both debt settlement and debt consolidation is to lower your debt. Debt settlement companies negotiate with your creditors to reduce the amount of your unsecured debt owed. There will usually be a fee associated with the program that amounts to about 1% of the interest that you would pay if you continue to pay the creditors directly. Debt settlement can reduce your debt from 35% to 70%. A debt settlement program can also cut your payments up to 40% in most cases making it easier to deal with your monthly budget woes. In most situations, a consumer in a debt settlement program is typically debt free within 2-3 years from when they started the debt settlement program. That can be about half the time it would take in a Consumer Credit Counseling Program or a conventional debt consolidation loan to pay off the same amount of debt.

The purpose of debt consolidation is to pay off your high interest debts with a low interest loan. Home equity loans can provide the lowest rates, but after extending the loan over a period of 20 years, the 6% interest being paid on the refinance loan ends up costing the same amount that a 21% interest credit card would. A conventional bank consilidation loan doesn’t actually pay off the debts but rather transfers the debt from one institution to another. This action appears to banks and mortgage companies as a last ditch effort on a consumers part to try and rectify a sinking situation. Many mortgage companies see debt consolidation loans as a sign of stress in your financial situation making it difficult for them to extend you credit in the future.

Credit Score Implication

Reducing your debts through debt settlement is one method to get out of debt in a short period of time relative to your credit history. You credit score will drop, making it hard to qualify for prime lending situations and better interest rates. You can still apply for sub-prime credit after a year has passed, however, the goal of a debt settlement program is to get out of debt, not to create new ones. Taking out a consolidation loan for your debt will have a major impact on your credit score. Since your debt is actually increasing instead of decreasing, you will be negatively hit on your credit report for opening another account making your overall situation more overextended. The majority of consolidation loans are issued with the assumption that the problem debt will be paid off and then the accounts closed. However 98% of consumers that get a debt consolidation loan do not close the problem accounts but rather make things worse by incurring new debt on the paid off accounts. Now the consumer is faced with the debt consolidation loan in addition to the new debt on the other accounts that were previously paid off.

Financial Choices

No single financial choice will fit everyone’s needs. While debt settlement will have an affect on your credit report, additional loans may be too expensive. In extreme cases, debt settlement can help avoid bankruptcy and costly debt consolidation loans. A report from debt settlement companies states that around 50% of the debt that their clients put into the program is from a prior debt consolidation loan.

If you would like to speak with a debt specialist about your financial situation, start with this simple form to start your confidential debt consultation.

• Over 70% of all marriages that end in divorce are due to financial problems.
• 75% of all Americans are only three paychecks away from bankruptcy.
• 105 million Americans will file bankruptcy due to unsecured debt.
• 1.5 million will participate in consumer credit counseling.
• 37 million will TRY TO NEGOTIATE WITH CREDITORS THEMSELVES - which the creditors love, because people with debt troubles are not professioanls and don’t know how the system really works.
• On average, when you purchase something with a credit card, you pay 132% MORE than if you used cash.
• Typical minimum monthly payment for a credit card are divided into 90% interest and only 10% to principal reductions.  The principal amount on your credit card is what the product or service you bought cost you.
• Over 71% of all credit card accounts have only the minimum monthly payments being made by consumers. 

Don’t be a statistic!  Begin your path to a debt free future now.