gift shop – Cheeky Squirrel http://www.cheekysquirrel.net/ Tue, 24 Aug 2021 17:32:56 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 http://www.cheekysquirrel.net/wp-content/uploads/2021/08/icon-27-150x150.png gift shop – Cheeky Squirrel http://www.cheekysquirrel.net/ 32 32 Best Debt Consolidation Loans in August 2021 http://www.cheekysquirrel.net/2021/08/24/best-debt-consolidation-loans-in-august-2021/ Tue, 24 Aug 2021 16:54:34 +0000 http://www.cheekysquirrel.net/?p=153 Editorial Independence We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money. American consumers had a total of $820 billion in credit card […]]]>


We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

American consumers had a total of $820 billion in credit card debt at the end of 2020, according to the Federal Reserve Bank of New York. Although total debt obliglations were lower in 2020 than in the years before, consumer debt (credit cards, auto, and personal loans) still accounted for 5.4% of American households’ disposable income

If you have a lot of high-interest debt, such as credit card debt, personal loans, medical loans, or payday loans, a debt consolidation loan could be a good option. If you consolidate this debt into a single loan with a lower interest rate than your existing debt, you can save on interest, pay off your debts faster, and streamline your finances with one monthly payment. 

Keep in mind that a debt consolidation loan only makes sense if you can get an interest rate that’s lower than the current interest rate of your existing debts. You should also take into account any fees. Always comparison shop between multiple lenders to get the best rate possible, then run the numbers yourself to see if a debt consolidation loan makes sense for your personal situation. 

If you’re looking for a place to start, here are our picks for the best debt consolidation loans. 

Best Debt Consolidation Loan Rates in August 2021

INSTITUTION CURRENT APR LOAN TERM RANGE MIN. LOAN AMT. MAX LOAN AMT. MINIMUM CREDIT SCORE REQUIRED
LightStream 2.49% to 20.49% (0.5% autopay discount included) 2 to 7 years $5,000 $100,000 Not specified
SoFi 4.99% to 19.63% (0.25% AutoPay discount included) 3 to 7 years $5,000 $100,000 680
Payoff 5.99% to 24.99% 2 to 5 years $5,000 $40,000 640
Best Egg 5.99% to 29.99% 3 to 5 years $2,000 $50,000 640
Marcus by Goldman Sachs 6.99% to 19.99% (0.25% AutoPay discount included) 3 to 6 years $3,500 $40,000 Not specified
Discover 6.99% to 24.99% 3 to 7 years $2,500 $35,000 Not specified
Rocket Loans 5.970% to 29.99% (0.3% AutoPay discount included) 3 to 5 years $2,000 $45,000 540

How We Chose These Lenders

This list does not represent the entire market. We began by analyzing the most commonly reviewed and searched-for debt consolidation loan rates. We only included lenders that offered loans marketed specifically as debt consolidation loans. However, it’s worth noting that other lenders offer personal loans that can be used for debt consolidation purposes too. Then, we cut out any lenders based on the following criteria:

  1. We eliminated lenders that don’t make it easy to find essential loan information like APRs, fees, minimum and maximum loan amounts, and available loan terms on their websites without entering an email or other personal information. Many lenders prominently display this information on their sites, making it easy to compare to other lenders. If you are in the market for a debt consolidation loan, we’d recommend a transparent lender that doesn’t require personal information for a rate comparison.
  2. We ruled out any lenders whose max APR exceeds 30%. Since the goal of a debt consolidation loan is to consolidate your existing high-interest debt into a single loan with a lower interest rate, we believe that it makes sense to feature lenders whose average interest rates are lower than the average credit card interest rate. Keep in mind that the rates listed on lender websites are only general ranges with the minimum and maximum rates. The rate you qualify for will likely fall somewhere between and will depend on factors like your credit score and loan term. The only way to know the exact rate you’ll get is to prequalify or apply for a loan. 
  3. Our list only features direct lenders rather than intermediaries or loan marketplaces. We also ruled out credit unions, which have unique membership requirements and limit the number of people who could easily consider them for a loan. Credit unions can offer competitive rates to those who qualify; check your local area or use a credit union locator to compare rates.
  4. Also, none of these lenders charge any fees or penalties for early payments or otherwise paying off your loan early. We don’t think you should ever have to pay a fee to get out of debt faster. We will never recommend a personal loan that includes such a fee or penalty.
  5. Finally, we eliminated any lenders that did not have an A rating or higher with the Better Business Bureau

The above rates and loan information is accurate as of August 23, 2021. The NextAdvisor editorial team updates this information regularly, though it is possible APRs and other information changed since it was last updated. Some lenders may offer a rate discount if you pay with AutoPay. If the advertised rates include an AutoPay discount, it will be clearly marked. Also, some loan offerings may be specific to where you live. Keep in mind that the longest loan terms and largest loan amounts may only be available to borrowers with the best credit.

Lender Overview

LightStream

Overview: A division of Truist Bank, LightStream offers fee-free debt consolidation loans with no fees for borrowers with good to excellent credit.

Pros: LightStream charges no fees on its loans and offers the Rate Beat program, which will offer a rate 0.1% lower than rates from competing lenders for the same loan term, with certain conditions. LightStream also offers a $100 Loan Experience Guarantee, where if you’re not satisfied with the service you received and explain why in a questionnaire, the company will send you $100.

Cons: LightStream requires you to go through the entire application process (including a hard credit inquiry, which can affect your credit score) to know the exact rate you’ll get, making it hard to shop around and compare with other lenders.

LIGHTSTREAM
Current APR 2.49% to 20.49% (0.5% autopay discount included)
Loan Term Range 2 to 7 years
Loan Amount $5,000 to $100,000
Prepayment Penalty None
Origination Fee None
Minimum Credit Score None specified
Minimum Annual Income None specified
Co-Borrower Allowed? Yes
Cosigner Allowed? No
Unsecured Debt Consolidation Loans Yes
Secured Debt Consolidation Loans No

SoFi

Overview: SoFi offers no fees, a way to prequalify online, and other perks. But loan eligibility is limited to those with good credit scores and who are currently or soon-to-be employed or have another source of income. 

Pros: SoFi charges no origination fees or late fees (although you’ll still be on the hook for interest on late payments). SoFi offers an unemployment protection program that will pause your payments and provide job placement assistance if you lose your job.

Cons: SoFi has stricter eligibility requirements than other lenders on this list. In addition to credit score requirements, you also have to be currently employed, have sufficient income from other sources, or have an offer of employment that starts within 90 days to qualify for a loan. Finally, SoFi loans are not available to residents of Mississippi. 

SOFI
Current APR 4.99% to 19.63% (0.25% AutoPay discount included)
Loan Term Range 3 to 7 years
Loan Amount $5,000 to $100,000
Prepayment Penalty None
Origination Fee None
Minimum Credit Score 680
Minimum Annual Income None specified, but employment or alternative income is required
Co-Borrower Allowed? Yes
Cosigner Allowed? No
Unsecured Debt Consolidation Loans Yes
Secured Debt Consolidation Loans No

Payoff

Overview: Payoff by Happy Money specializes in debt consolidation loans and has lower credit score requirements than some other lenders on this list. You can also prequalify online without a hard credit check. 

Pros: Payoff has a minimum FICO credit score requirement of 640, which is considered in the “fair” range by Experian. This makes Payoff more accessible to those who may not have good or excellent credit. Keep in mind, though, that credit score isn’t the only determining factor lenders use when deciding whether to grant you a loan. Payoff members also get free monthly FICO score updates.

Cons: You need to have at least three years of established credit to qualify for a Payoff loan. In addition, Payoff loans aren’t available in Massachusetts, Mississippi, Nebraska, and Nevada.

PAYOFF
Current APR 5.99% to 24.99%
Loan Term Range 2 to 5 years
Loan Amount $5,000 to $40,000
Prepayment Penalty None
Origination Fee 0% to 5%
Minimum Credit Score 640, and three years of established credit
Minimum Annual Income None specified
Co-Borrower Allowed? No
Cosigner Allowed? No
Unsecured Debt Consolidation Loans Yes
Secured Debt Consolidation Loans No

Best Egg

Overview: Best Egg offers debt consolidation loans with a quick application process and the option to prequalify online. Like Payoff, Best Egg offers loans to borrowers with “fair” credit (640 and above). 

Pros: Best Egg has a quick online application process, allowing you to receive funds in as little as one business day. 

Cons: Although Best Egg offers loans to those with fair credit, getting the lowest APR advertised requires you to have an annual income of at least $100,000 and a minimum FICO credit score of 700.

BEST EGG
Current APR 5.99% to 29.99%
Loan Term Range 3 to 5 years
Loan Amount $2,000 to $50,000
Prepayment Penalty None
Origination Fee 0.99% to 5.99%; at least 4.99% for loan terms longer than four years
Minimum Credit Score 640; 700+ for the lowest APR
Minimum Annual Income $100,000 minimum individual annual income for the lowest APR
Co-Borrower Allowed? No
Cosigner Allowed? No
Unsecured Debt Consolidation Loans Yes
Secured Debt Consolidation Loans No

Marcus by Goldman Sachs

Overview: Marcus, a subsidiary of Goldman Sachs, offers fee-free debt consolidation loans for borrowers with good-to-excellent credit. 

Pros: Marcus offers an on-time payment reward where if you pay your loan on time and in full every month for 12 months, you can get an interest-free payment deferral for one month. Marcus also charges no origination fees, sign-up fees, or late fees. 

Cons: Although Marcus doesn’t specify a minimum credit score needed to qualify for a loan, it does say you’ll need good or excellent credit (700-850) to get the lowest rates.

MARCUS BY GOLDMAN SACHS
Current APR 6.99% to 19.99% (0.25% AutoPay discount included)
Loan Term Range 3 to 6 years
Loan Amount $3,500 to $40,000
Prepayment Penalty None
Origination Fee None
Minimum Credit Score None specified; borrowers with scores of 700-850 can get lower rates and larger loan amounts)
Minimum Annual Income None specified
Co-Borrower Allowed? No
Cosigner Allowed? No
Unsecured Debt Consolidation Loans Yes
Secured Debt Consolidation Loans No

Discover

Overview: This popular banking and credit card company also offers debt consolidation loans with no origination fees, flexible repayment terms, and same-day decisions in most cases. 

Pros: Discover charges no origination fees, and no other fees, as long as you pay on time. Discover offers a same-day decision in most cases, as well as an option to pay off creditors directly. If you change your mind about needing the loan, you’ll pay no interest if you return the loan funds within 30 days. 

Cons: You need a minimum household income of $25,000 to qualify for a Discover loan. In addition, you can’t use the loan to pay off a secured loan or directly pay off a Discover credit card. 

DISCOVER
Current APR 6.99% to 24.99%
Loan Term Range 3 to 7 years
Loan Amount $2,500 to $35,000
Prepayment Penalty None
Origination Fee None
Minimum Credit Score None specified
Minimum Annual Income $25,000 household income
Co-Borrower Allowed? No
Cosigner Allowed? No
Unsecured Debt Consolidation Loans Yes
Secured Debt Consolidation Loans No

Rocket Loans

Overview: Rocket Loans, a subsidiary of mortgage company Quicken Loans, offers debt consolidation loans for people with “poor” credit, although you may pay higher interest rates. 

Pros: Rocket Loans requires a minimum credit score of 540, making it a viable option for people with “poor” credit. Rocket Loans offers online preapproval as well as same-day funding.

Cons: The maximum interest rate for Rocket Loans is on the high side of the spectrum for this list, although the minimum interest rate is on the low side. Keep in mind that the exact interest rate you’ll get depends on your credit score, and those with poor credit will typically get higher rates. Rocket Loans only offers two loan terms: 3 years and 5 years. 

ROCKET LOANS
Current APR 5.970% to 29.99% (0.3% AutoPay discount included)
Loan Term Range 3 to 5 years
Loan Amount $2,000 to $45,000
Prepayment Penalty None
Origination Fee 1% to 6%
Minimum Credit Score 540
Minimum Annual Income $24,000
Co-Borrower Allowed? No
Cosigner Allowed? No
Unsecured Debt Consolidation Loans Yes
Secured Debt Consolidation Loans No

What is Debt Consolidation?

Debt consolidation is when you consolidate multiple sources of debt — for example, credit cards, personal loans, payday loans, or medical bills — into a single loan. Some common reasons for consolidating debt include:

  • Simplifying your finances by combining your debt into a single monthly payment
  • Consolidating high-interest debt, like credit card debt, into a lower-interest loan
  • Consolidating debt with a variable interest rate into a fixed-rate loan
  • Reducing your monthly payment by getting a longer loan term
  • Being able to budget better with fixed, monthly payments

The two most common ways of consolidating debt are balance transfer credit cards and debt consolidation loans. With a debt consolidation loan, you take out a loan to pay off your existing debt and pay off the new loan over a fixed time period. A balance transfer credit card comes with an introductory 0% APR, making it a good move if you qualify for one of these cards. Whether you use a balance transfer credit card or a debt consolidation loan, it is essential to make a plan to pay off the consolidated debt before the loan term ends or an introductory APR expires.

What is a Debt Consolidation Loan? 

A debt consolidation loan is a type of personal loan taken out for the purpose of consolidating debt. Although many lenders offer products specifically called debt consolidation loans, they’re typically the same as personal loans and have the same loan terms and APRs, just under a different name. Some debt consolidation loans might offer benefits geared toward those looking to consolidate debt, such as the option to pay your lenders directly through the loan provider, saving you a step. 

Debt consolidation loans typically fall into two categories: secured and unsecured. Secured loans require you to put up an asset — such as a home or car — as collateral, which the lender can seize if you default on your loan. Unsecured loans don’t require collateral. Because secured loans are less risky for the lender, they typically have lower APRs and credit score requirements. However, be careful when taking out a secured loan; if you fall behind on your payments, you could lose your collateral. In general, you want to avoid trading any unsecured debt for secured debt since that increases your risk. 

Benefits of a Debt Consolidation Loan 

A debt consolidation loan can help you pay off debt and improve your financial health when used correctly. Some benefits of a debt consolidation loan include:

  • Lower APR. If you have high-interest debt like credit card debt, you may be able to consolidate your debt into a loan with a lower APR. A lower APR means you’ll pay less interest over the life of the loan, and you may even be able to pay off your debt faster as a result. Keep in mind the exact rate depends on factors like your credit score and debt-to-income ratio, so you’ll need to prequalify for a loan or get a quote to see your rate. A debt consolidation loan is likely not a good idea if you can’t get a lower APR than your current one. Also, be aware that fees may cut into your savings; before taking out a debt consolidation loan, always crunch the numbers to see how much you can save.
  • Regular, fixed-rate payments. If you have lots of credit card debt with no plan to pay it off, a debt consolidation loan can help. With a debt consolidation loan, you’ll make regular monthly payments with a fixed payoff date to help you budget better. You’ll also get a fixed interest rate, as opposed to a variable APR with credit cards, eliminating any surprise changes in interest charges. 
  • Streamline your finances. If you have multiple sources of debt, such as several credit cards or personal loans, combining them all into a single monthly payment can simplify your finances and help you better keep track of your payment deadlines. A single missed payment on a credit card or loan can result in hefty fees or a significant drop in your credit score. A debt consolidation loan can help you avoid missing payments by reducing the number of separate bills you need to pay.

Keep in mind, a debt consolidation loan will only help you if you go in with a plan to pay off the debt. Before taking out a debt consolidation loan:

  • Calculate the interest and fees to make sure you’re saving money
  • Build the loan payments into your budget
  • Keep track of payment deadlines to make sure you don’t miss a payment. 

Debt Consolidation Loan vs. Balance Transfer Credit Card 

One popular alternative to a debt consolidation loan is a balance transfer credit card. A balance transfer credit card is a credit card that offers a 0% APR introductory period, which typically ranges from 6 to 20 months. You can use a balance transfer credit card to consolidate debt by putting your existing debts onto the credit card and paying it off before the introductory period expires, thus paying no interest on the balance. (Though you may have to pay a balance transfer fee, usually around 3%.)

The biggest draw of a balance transfer credit card is paying off the balance before the introductory period expires and, consequently, paying no interest at all. Having a plan to pay off debt is even more important when using a balance transfer card, or you’ll be stuck with high APRs once the introductory period ends. The best balance transfer cards are typically available only to those with good or excellent credit, making them less accessible than personal loans for those with poor or fair credit.

Personal Loan Balance Transfer Credit Card
• Installment loan
• Fixed interest rate for the loan term
• More options for those with poor or fair credit
• May charge an application fee, origination fee, prepayment penalty, and other fees
• Credit card
• 0% APR introductory period, then high variable APR
• Fewer options for those with poor or fair credit
• May charge a balance transfer fee, a monthly credit card fee, and other fees

Alternatives to a Debt Consolidation Loan

In addition to balance transfer credit cards, there are several other alternatives to debt consolidation loans or personal loans for consolidating debt. These include:

Home Equity Loan or HELOC

You can tap into your home equity for immediate cash with either a home equity loan or home equity line of credit (HELOC). A home equity loan is a secured installment loan where you borrow a lump sum and pay it back, with interest, over a fixed period. A HELOC is a revolving line of credit that works like a credit card, where you can withdraw as much cash as you need (up to the credit limit) during the draw period and pay it back during the repayment period.  Home equity loans and HELOCs use your home equity as collateral and may have lower rates than unsecured personal loans or credit cards. Be aware, though, that if you default on the loan, the lender could foreclose on your house. 

Cash-Out Refinance

Similar to a home equity loan or HELOC, a cash-out refinance also lets you use your house as a means of accessing cash. The process just works differently. With a cash-out refinance, you take out a new mortgage with a larger value than your current mortgage, pay off your old mortgage with the money, and keep the difference as cash. Since mortgage rates are relatively low right now, a cash-out refinance may be a better deal than a home equity loan, HELOC, or personal loan. 

Credit Counseling

If you’re struggling with debt, many credit counseling agencies offer services to help you make a debt repayment plan and get your finances back on track. Credit counseling is different from debt settlement, where for-profit companies negotiate with your creditors in an attempt to get them to settle your debt for less than the total amount owed. Debt settlement companies typically charge hefty fees for their services, and settling your debt for less than the original amount can severely hurt your credit score. Credit counseling is typically offered for free or for a small fee by nonprofit organizations. 



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Are you eligible for debt consolidation? Control List http://www.cheekysquirrel.net/2021/08/24/are-you-eligible-for-debt-consolidation-control-list/ Tue, 24 Aug 2021 13:39:15 +0000 http://www.cheekysquirrel.net/are-you-eligible-for-debt-consolidation-control-list/ If you are wondering whether or not you will qualify for debt consolidation loans, you are already trying to deal with the debt problem, which is a good sign. If you are considering the benefits of debt consolidation and whether you will qualify for them, you are also on the right track. Naturally, there is […]]]>


If you are wondering whether or not you will qualify for debt consolidation loans, you are already trying to deal with the debt problem, which is a good sign. If you are considering the benefits of debt consolidation and whether you will qualify for them, you are also on the right track.

Naturally, there is a bit of uncertainty in taking out debt consolidation loans. Although people with the worst credit score are eligible for debt settlement programs, they are not eligible for debt consolidation.

So what are the factors that make you eligible for debt consolidation? Alpine credits has a few points to share with you in this regard.

Factors to Consider in Determining Eligibility for Debt Consolidation

There are three main factors you should keep in mind when determining your eligibility for debt consolidation. They are:

  • Your Secured Loans Cannot Be Consolidated With Debt Consolidation Loans
  • You can either have a good credit rating or find lenders who offer high interest loans even with low ratings.
  • The debt service ratio should be around thirty-five percent or less

Let’s take a look at each of these three criteria in detail.

Debt consolidation is only about unsecured debt

So, are you eligible for debt consolidation? You must understand that you are only allowed to consolidate debts on your unsecured loans. As a general rule, you cannot embed debts secured by collateral. These debts include:

  • Auto loans
  • Home equity lines of credit
  • Mortgages

You are allowed to consolidate all of your unsecured debts, which are debts that do not need collateral. These debts include:

  • An unsecured personal loan
  • Student loans
  • Tax arrears
  • Credit card debt
  • Personal line of credit

While consolidating to pay off your debts, incorporate all of your current accounts. This will greatly simplify your bill payments and pay off your debts faster. Think of it this way, rather than making multiple payments, you will only need to pay one bill per month. It will be especially useful for people with multiple lines of credit with a different monthly payment date.

Good credit scores deserve good interest rates

You must have a good credit rating to get the right interest rates for your debt consolidation loan. If the credit rating does not look good due to collection accounts and missed payments, it will be difficult for you to qualify for the loans.

In many cases, individuals have such a low score on their credit reports that they simply cannot find lenders who will approve their loan. Now, even if they eventually qualify for the loan, the interest rate is higher than usual.

Also, consolidation will not help you when the interest rate you are entitled to is higher than the interest rate you are paying on your current accounts. After all, lowering interest rates won’t help you save much, and you’ll continue to pay almost the same amount every month. A debt consolidation loan will only benefit you if the interest rates are not higher than your current payments.

It is also true that lenders have different criteria for borrowers to be eligible for debt consolidation loans. While some lenders accept high credit card balances and low credit scores, others have more stringent criteria.

The fact remains that eligibility for all loans, even secured mortgages using houses as collateral, is difficult to achieve with a credit score below 600. Credit score requirements are higher for unsecured loans because the lender has no collateral to fall back on. in case you don’t repay your loan.

Debt consolidation loans are not for you when your score is low. It is better to look for other means in this case.

Lenders Consider Your Debt Service Ratio

When assessing your debt consolidation application, lenders usually take your debt service ratio into account. The debt service ratio refers to the percentage of gross monthly income required to make the minimum debt payment, which includes payments on secured debt and unsecured debt.

For example, if you earn around $ 4,000 per month and pay a minimum of $ 1,500 per month to stay up to date on your debts, the debt service ratio rises to 37.5%.

Lenders generally have different debt service ratio limits for debt consolidation loans. They will factor your new loans into the debt service ratio calculation. You might have a hard time getting approval from a lender when the ratio remains too high.

According to most experts, the ratio should stay at thirty-five percent. Depending on the requirements of the lender, you might get approval even with higher ratios. But you will need a high income percentage to cover the monthly debt payment. Ultimately, you will start to live paycheck to paycheck and never be able to make ends meet.

What Happens When You Do Not Qualify For Debt Consolidation Loans?

These loans are not for every individual. Many people who are looking for such loans have reached a point where even loans cannot help them. Their debt may be too high to qualify, and their credit rating may be too low to be approved.

It’s time to consider other options when the majority of lenders tell you no. In this case, you can contact a credit counseling business. They will assess your budget and your debts to indicate the solutions adapted to your needs.

In most cases, they ask people to go for debt management plans, which are basically repayment plans organized by credit counseling agencies. It lowers the interest rate charged on the balance and allows you to pay off the debts in a single monthly payment, much like a consolidation.

The bottom line

You may be eligible for unsecured debt consolidation if your credit ratio is good and the debt service ratio is not high. However, if you cannot qualify for a debt consolidation loan, it is best to go for a debt management plan from a credit counseling agency. But remember: you have to be prepared to make the spending changes necessary for any way of working.



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The guide that simplifies creating a debt consolidation plan http://www.cheekysquirrel.net/2021/08/24/the-guide-that-simplifies-creating-a-debt-consolidation-plan-2/ Tue, 24 Aug 2021 08:55:05 +0000 http://www.cheekysquirrel.net/the-guide-that-simplifies-creating-a-debt-consolidation-plan-2/ Did you know that the main reason people take out loans in the United States is for debt management and consolidation? One of the best ways to help you manage your personal debt and your financial health is to have a debt consolidation plan. Sadly, for many people in the United States, the debt industry […]]]>


Did you know that the main reason people take out loans in the United States is for debt management and consolidation? One of the best ways to help you manage your personal debt and your financial health is to have a debt consolidation plan. Sadly, for many people in the United States, the debt industry has become a normal way of life.

But what is a debt consolidation plan? And how can it help you on your journey to financial security? These are great questions and having the answers is vital to your future and your financial health.

The good news is, you’ve come to the right place to get the answers you’re looking for. Read on to learn more about debt consolidation and how it will help you manage your personal debt.

What is debt consolidation?

There are a lot of people in the United States who are in poor financial health due to personal debt. While it may seem impossible to find a way out, debt consolidation is supposed to help. It is a plan that helps you combine all of your debts in order to lower your monthly payments.

It works by spreading out the payments you will need to make over a longer period of time. It makes your personal debt much easier to manage. Think of it as a way to make paying off your debts a lot easier on your finances.

A good place to start in debt consolidation is to go over and add up all the debts you owe. From there, create a budget based on your income to figure out how much money you can set aside each month to pay off your debts.

You should do your best to target debts that you owe that have a high interest rate, because the longer those debts take to be paid, the more money you will have coming out of your pocket. Once you’ve done that, make a list of your monthly expenses. This can be food, gas, utilities or entertainment, as well as rent. Try to find things that are not essential that you can reduce or remove.

By taking all these numbers, you will have a good idea of ​​your budget and it is important that you stick to it in order to pay off all your debts. Do your best to avoid impulse buying and avoid adding credit card debt at all costs. Click here for more information on a debt consolidation loan.

Reasons to start your debt consolidation plan

There are many reasons why people go ahead with creating their own debt consolidation plan. Here are some of the reasons people consolidate debt that will help you know if you are ready too.

They are ready to get out of debt

Consolidating loans into one large loan is an important first step towards financial security and a final goodbye to your personal debt. It’s important to remember that debt consolidation is just a tool to reduce the amount of debt you owe. It doesn’t completely eliminate all the debt you owe.

In order to take full advantage of your plans and opportunities, you should give top priority to paying off the remaining debt that you have on your behalf. On top of that, avoid taking on more credit card debt. You will also need to pay more than your minimum monthly payment amount each month to stay ahead of your debt.

They pay high interest

Loan consolidation is a great option for anyone who is paying high interest on the loans they have taken out. If you are paying more than 15% interest rate on your debt, it is a great idea to go ahead with your debt consolidation plan. Transferring your credit card debt to a card with a lower interest rate will save you tons of money.

They want a fixed interest rate

It’s easy to get carried away by the hype of a variable interest rate, but they’re often bait to get you to sign on the dotted line and then get tough once the teaser period is over. This is when the interest rate tends to jump up and get expensive.

This makes the interest rate unpredictable which is detrimental when you are trying to budget and want to have a good idea of ​​what your payment will be during each pay period. It is a wise decision to consolidate your loans and debts for a fixed interest rate so that you know exactly what you owe each month.

They want a longer pay period with lower payouts

The biggest downside to a debt consolidation plan is that it will lengthen your payment period. This is necessary to reduce your monthly payments and make paying off your debts much easier to manage. This means that you might end up paying more money over time, but you’ll have manageable payments on your debt.

It also gives you time to earn more money so that you can increase the amount you pay each month and pay off your debts faster.

They are tired of multiple monthly payments

Having multiple monthly payments that you make is drowned out and often overwhelming. Combining your debts into one payment per month makes things more organized and helps you make sure that you are paying off all of your debts each month.

They are constantly in arrears

When you have multiple monthly payments, it’s hard to remember when all of your payments are due. Consolidating your debt will only give you one due date to remember when making your monthly personal debt payments.

Build Your Debt Consolidation Plan Today

A debt consolidation plan is a great option for anyone who has a lot of personal debt from credit cards and student loans. It helps streamline the process of paying off your debt and gives you a single due date to remember for your payments. It’s also great because it helps lower your interest rates, which saves you money in the long run.

For more useful and informative articles, be sure to check out our website further.



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The guide that simplifies creating a debt consolidation plan http://www.cheekysquirrel.net/2021/08/24/the-guide-that-simplifies-creating-a-debt-consolidation-plan/ Tue, 24 Aug 2021 08:55:05 +0000 http://www.cheekysquirrel.net/the-guide-that-simplifies-creating-a-debt-consolidation-plan/ Did you know that the main reason people take out loans in the United States is for debt management and consolidation? One of the best ways to help you manage your personal debt and your financial health is to have a debt consolidation plan. Sadly, for many people in the United States, the debt industry […]]]>


Did you know that the main reason people take out loans in the United States is for debt management and consolidation? One of the best ways to help you manage your personal debt and your financial health is to have a debt consolidation plan. Sadly, for many people in the United States, the debt industry has become a normal way of life.

But what is a debt consolidation plan? And how can it help you on your journey to financial security? These are great questions and having the answers is vital to your future and your financial health.

The good news is, you’ve come to the right place to get the answers you’re looking for. Read on to learn more about debt consolidation and how it will help you manage your personal debt.

What is debt consolidation?

There are a lot of people in the United States who are in poor financial health due to personal debt. While it may seem impossible to find a way out, debt consolidation is supposed to help. It is a plan that helps you combine all of your debts in order to lower your monthly payments.

It works by spreading out the payments you will need to make over a longer period of time. It makes your personal debt much easier to manage. Think of it as a way to make paying off your debts a lot easier on your finances.

A good place to start in debt consolidation is to go over and add up all the debts you owe. From there, create a budget based on your income to figure out how much money you can set aside each month to pay off your debts.

You should do your best to target debts that you owe that have a high interest rate, because the longer those debts take to be paid, the more money you will have coming out of your pocket. Once you’ve done that, make a list of your monthly expenses. This can be food, gas, utilities or entertainment, as well as rent. Try to find things that are not essential that you can reduce or remove.

By taking all these numbers, you will have a good idea of ​​your budget and it is important that you stick to it in order to pay off all your debts. Do your best to avoid impulse buying and avoid adding credit card debt at all costs. Click here for more information on a debt consolidation loan.

Reasons to start your debt consolidation plan

There are many reasons why people go ahead with creating their own debt consolidation plan. Here are some of the reasons people consolidate debt that will help you know if you are ready too.

They are ready to get out of debt

Consolidating loans into one large loan is an important first step towards financial security and a final goodbye to your personal debt. It’s important to remember that debt consolidation is just a tool to reduce the amount of debt you owe. It doesn’t completely eliminate all the debt you owe.

In order to take full advantage of your plans and opportunities, you should give top priority to paying off the remaining debt that you have on your behalf. On top of that, avoid taking on more credit card debt. You will also need to pay more than your minimum monthly payment amount each month to stay ahead of your debt.

They pay high interest

Loan consolidation is a great option for anyone who is paying high interest on the loans they have taken out. If you are paying more than 15% interest rate on your debt, it is a great idea to go ahead with your debt consolidation plan. Transferring your credit card debt to a card with a lower interest rate will save you tons of money.

They want a fixed interest rate

It’s easy to get carried away by the hype of a variable interest rate, but they’re often bait to get you to sign on the dotted line and then get tough once the teaser period is over. This is when the interest rate tends to jump up and get expensive.

This makes the interest rate unpredictable which is detrimental when you are trying to budget and want to have a good idea of ​​what your payment will be during each pay period. It is a wise decision to consolidate your loans and debts for a fixed interest rate so that you know exactly what you owe each month.

They want a longer pay period with lower payouts

The biggest downside to a debt consolidation plan is that it will lengthen your payment period. This is necessary to reduce your monthly payments and make paying off your debts much easier to manage. This means that you might end up paying more money over time, but you’ll have manageable payments on your debt.

It also gives you time to earn more money so that you can increase the amount you pay each month and pay off your debts faster.

They are tired of multiple monthly payments

Having multiple monthly payments that you make is drowned out and often overwhelming. Combining your debts into one payment per month makes things more organized and helps you make sure that you are paying off all of your debts each month.

They are constantly in arrears

When you have multiple monthly payments, it’s hard to remember when all of your payments are due. Consolidating your debt will only give you one due date to remember when making your monthly personal debt payments.

Build Your Debt Consolidation Plan Today

A debt consolidation plan is a great option for anyone who has a lot of personal debt from credit cards and student loans. It helps streamline the process of paying off your debt and gives you a single due date to remember for your payments. It’s also great because it helps lower your interest rates, which saves you money in the long run.

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Is A Debt Consolidation Loan The Best Choice For You? http://www.cheekysquirrel.net/2021/08/19/is-a-debt-consolidation-loan-the-best-choice-for-you/ Thu, 19 Aug 2021 21:59:50 +0000 http://www.cheekysquirrel.net/is-a-debt-consolidation-loan-the-best-choice-for-you/ No one likes being in debt or accumulating debt over a period of time. However, people often find themselves in a situation where their finances have got out of hand and they have a mountain of debt that they have to pay off. These situations are more and more common and it is always best […]]]>


No one likes being in debt or accumulating debt over a period of time. However, people often find themselves in a situation where their finances have got out of hand and they have a mountain of debt that they have to pay off. These situations are more and more common and it is always best to consider your options when you are going through a financial crisis. One of the best options available to people in debt is to choose debt consolidation to get out of debt.

It is basically a personal loan that individuals can use to pay off high interest debt, such as credit card debt. When you consolidate your debt, you can pay off your credit card balances in full and benefit from a simplified repayment plan. This could help save you time and money, depending on the terms of the loan and the amount of your debt. However, you need to consider your financial goals and your circumstances before deciding if a debt consolidation loan is the best choice for you. Here’s what you need to know about it.

When Should You Consider a Debt Consolidation Loan?

Personal loans can be acquired for any reason and anything, but if you are using them for debt consolidation, here are the cases where it can work for you:

You have an excellent credit rating

People can get personal loans with any credit score, but if you want lower interest rates and great terms, Harris and his partners advise that you should have an excellent credit score, which should be above 670.

Your debt is at high interest

The average interest rate for personal loans is 9.41%, but the average interest rate for credit card debt is 16%. This is a significant difference, and people who can qualify for lower rates than what they are already paying should consider debt consolidation loans to save money in the long run.

You have a repayment plan

One of the worst things about credit card debt is that it is constantly revolving, which means you borrow and pay the funds off on an ongoing basis, but there is no repayment plan. . If you use your credit card and only pay the minimum each month, you could end up paying off your debt forever. However, personal loans have a repayment plan which makes them a great option if you can stick with it as it helps you get out of debt quickly.

While you will have obvious benefits if you get a debt consolidation loan, there are times when it might not be the best option for paying off your credit card debt. These include:

You haven’t changed your spending problems

A debt consolidation loan is advantageous because it means that you can use the credit available on your credit card. However, once you transfer the debt and continue to accumulate debt on the card you recently paid off, your financial situation could get worse. Hence, you need to sort out your spending problems before acquiring a debt consolidation loan.

You have poor or fair credit

Even people with bad credit can get approved for personal loans, but they will pay higher interest rates. This will increase their costs and sometimes make monthly payments difficult to repay, defeating the original goal of getting a loan.

You only have a small amount of debt

If you think you can pay off your existing credit card debt quickly over the next six months to a year, the savings you would make from a debt consolidation loan are not going to benefit you. You don’t need to take out a personal loan when you can easily pay your monthly credit card payments.

Other articles from mtltimes.ca – totimes.caotttimes.ca

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Is Debt Consolidation Hurting Your Credit? – Councilor Forbes http://www.cheekysquirrel.net/2021/08/17/is-debt-consolidation-hurting-your-credit-councilor-forbes/ Tue, 17 Aug 2021 13:18:33 +0000 http://www.cheekysquirrel.net/is-debt-consolidation-hurting-your-credit-councilor-forbes/ Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors. Find out if you qualify for debt relief Free estimate without obligation If you’re struggling to pay your bills or want to get out of debt […]]]>


Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors.

Find out if you qualify for debt relief

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If you’re struggling to pay your bills or want to get out of debt faster, debt consolidation might be a solution. But before going ahead with this method of debt relief, it’s important to understand what it does to your credit, how the process works, and your other options.

Here’s a more in-depth look at how debt consolidation works.

How Does Debt Consolidation Work?

Debt consolidation is a form of debt relief that typically involves taking out a new loan to pay off previous loans, by combining the debts – consolidating them – into one monthly payment. Debt consolidation can offer several benefits, such as lowering your interest rate, simplifying your monthly payments, and deleveraging faster.

If you’re trying to decide if debt consolidation is a good idea, start by looking at your overall financial life. Debt consolidation can be a solution if you are struggling to pay your bills, if you are uncomfortable with your current debt amount, or if you are unhappy with interest rates (APR ) your existing credit cards or loans.

However, it is also important to know how debt consolidation can change your credit rating. Take care to manage your credit score while paying off your debt.

How Debt Consolidation Affects Your Credit

Debt consolidation could have an impact on your credit score, both good and bad. Below are five ways that debt consolidation could positively or negatively affect your credit score.

1. It could cause difficult questions on your credit

Whenever you formally apply for credit, the creditor does a thorough investigation, also known as a credit withdrawal, to check your creditworthiness. Each serious request usually reduces your credit score by a few points. If you shop around and apply for debt consolidation loans from multiple banks at once, your credit could be temporarily affected. Fortunately, many inquiries over a period of time, ranging from 14 to 45 days, are usually combined into one when your credit score is calculated.

Remember that a thorough investigation is not necessary every time you speak to a lender or visit a website. It is possible to do your research and be prequalified for a loan without having to go through the rigorous investigation process. Many lenders will allow you to research rates and prequalify online with a smooth credit check, or smooth draw, that doesn’t affect your credit score. This allows you to take the first steps to see if you qualify for a loan, but without undermining your credit.

Before you decide to go ahead with a lender, read the fine print and make sure you understand whether or not you are ready to have your credit checked with a thorough investigation as part of the loan application process. .

2. Your credit usage may change.

Creditors and rating agencies pay attention to your credit utilization rate, which is roughly 30% of your FICO credit score. Your credit utilization rate is the percentage of available credit that you are using at all times. For example, if you have a credit card with a credit limit of $ 15,000 and a balance of $ 4,500, your credit utilization rate would be 30%.

If your credit utilization rate increases after debt consolidation, it could negatively impact your credit score. Using the example above, if you transfer your existing credit card balance of $ 4,500 with a limit of $ 15,000 to a new credit card with a credit limit of $ 7,500, your rate will drop. The credit usage on this new card will be 60%, which could result in a knock on your credit score.

On the other hand, if you consolidate multiple credit card debts into one new personal loan, your credit utilization rate and your credit rating might improve. Credit cards and personal loans are considered two separate types of debt when assessing your credit mix, which represents 10% of your FICO credit score.

For example, let’s say you have three credit cards. Again, using the example above:

  • The first card has a balance of $ 4,500 with a credit limit of $ 15,000.
  • The second card has a balance of $ 2,000 with a credit limit of $ 10,000.
  • The third card has a balance of $ 5,000 with a credit limit of $ 10,000.

You would have credit usage rates of 30%, 20%, and 50%, respectively, for these three cards. (By combining the cards, your overall credit usage is almost 33%.) If you combine these three debts into a new personal loan of $ 11,500, the credit usage ratios for each of these three cards will drop to zero (as long as you keep the credit card accounts open and you don’t spend extra on the cards), which could improve your credit score.

3. The average age of your accounts may drop

Another factor in determining your credit score is the average age of your accounts, or how long you have opened these accounts. This shows the overall length of your credit history and represents approximately 15% of your FICO credit score.

If you’re opening a new credit account as part of your debt consolidation plan, whether it’s a new credit card with balance transfer or a new personal loan, the average age of accounts will decrease and you may experience a drop in your credit score. But depending on how many other credit accounts you have and your overall credit history, the drop may not be significant.

4. It can improve your payment history in the long run.

Payment history represents approximately 35% of your credit score. If you already have a solid track record of making payments on time, debt consolidation may not affect this aspect of your credit score. But if consolidating your debt into a new loan at a lower interest rate makes it easier to make payments on time, debt consolidation could help you improve your credit score in the long run.

5. It might cause you to close accounts

If you are going through the debt consolidation process, it can be nice to close your old accounts after a balance transfer or getting a new loan. But be careful. Closing a credit account could reduce the average age of your accounts or increase your credit utilization rate. Both of these actions can hurt your credit score.

After you have completed your debt consolidation process, consider leaving your old credit accounts open but with zero balances. Keeping these accounts open and on your credit report can be good for your credit score, as long as you’re not tempted to use them to rack up more debt.

Ways to consolidate your debt

There are several ways to consolidate debt:

  • Debt Consolidation Loans. Debt consolidation loans are a type of personal loan available from banks, credit unions, and online lenders. With this type of loan, lenders can pay off your debt directly or provide the borrower with cash to pay off their outstanding balances.
  • Personal loans. With a personal loan used for debt consolidation, you take out a new loan from a bank, credit union, or other lender to pay off higher interest debt, such as credit card debt. credit or other bills.
  • Balance transfer credit card. If you have sufficient credit, you can transfer balances from multiple credit cards to a new credit card with balance transfer at a lower interest rate, sometimes 0% APR for an introductory period.
  • Home equity loan. If you own your home and have built up enough equity to qualify, you may be able to use a Home Equity Loan or Home Equity Line of Credit (HELOC) to consolidate your debt at a low rate. ‘lower interest.
  • Mortgage refinancing with withdrawal. Withdrawal mortgage refinancing gives you the option of refinancing your home for more than the outstanding balance. You can use the difference in cash to pay off unpaid debts.

Alternatives to debt consolidation

If you don’t want to take out a new loan, open a credit card, or use the equity in your home to consolidate your debt, there are several other alternatives:

  • Pay off your debts yourself. If your debt payments are manageable, you can make a plan to pay off your debt faster. If you have enough income and space in your monthly budget, you may be able to pay off your debts quickly without debt consolidation, using the snowball or debt flood method.
  • Enter a Debt Management Program (DMP). If you’re having trouble paying your bills, you can work with a nonprofit consumer credit counseling agency to set up a debt management program where you agree to pay off your debts with a monthly payment. to the credit counseling agency, which then pays your creditors for you.
  • File for bankruptcy. If you’re struggling to pay your bills, don’t want (or can’t get approved) to borrow money anymore, and you don’t think you can pay off your debts, you may want to consider filing for bankruptcy. This legal process can erase some or all of your debt and help you get a fresh start. But be aware that bankruptcy stays on your credit report for seven to 10 years.
  • Consider debt settlement, but as a last resort. If you’ve fallen behind on your debts, you may want to consider negotiating with your creditors to accept less money than you owe. This is called debt settlement, and you can do it yourself or by working with a debt settlement company. But be careful. Debt settlement can be risky. Creditors are not required to accept your debt settlement offer and may be unwilling to negotiate. And the debt settlement process usually causes significant damage to your credit. It should only be considered as a last resort.

Final result

Is Debt Consolidation Hurting Your Credit? It depends. If you are using debt consolidation as a strategy to get out of debt, you may need to prepare for a short-term drop in your credit rating. But when you can manage your payments responsibly and start making progress on paying off your debt, debt consolidation can help you achieve better credit and a stronger financial future.

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The Polish Deal: Consolidation Relief and Changes in the Tax Treatment of Debt Financing Costs http://www.cheekysquirrel.net/2021/08/12/the-polish-deal-consolidation-relief-and-changes-in-the-tax-treatment-of-debt-financing-costs/ Thu, 12 Aug 2021 07:00:00 +0000 http://www.cheekysquirrel.net/the-polish-deal-consolidation-relief-and-changes-in-the-tax-treatment-of-debt-financing-costs/ The tax changes proposed under the Polish Deal program enshrine in law a method of calculating the limit on debt financing costs that is disadvantageous to taxpayers. They offer a carrot to buyers of shares in the form of a deduction from the tax base of qualifying expenditure on the acquisition of shares as part […]]]>


The tax changes proposed under the Polish Deal program enshrine in law a method of calculating the limit on debt financing costs that is disadvantageous to taxpayers. They offer a carrot to buyers of shares in the form of a deduction from the tax base of qualifying expenditure on the acquisition of shares as part of the consolidation relief, but also a stick in the form of a total ban on treating interest on debt financing obtained from related parties for the acquisition of shares as a tax deductible cost.

An unfavorable method of calculating the limit on debt financing costs

The Corporate Income Tax Act currently provides that CIT taxpayers cannot recognize debt financing costs as tax deductible costs as long as the debt financing costs to be recognized in interest income earned in that fiscal year by more than 30%. tax EBITDA.

In accordance with the CIT Law, excess debt financing costs not exceeding PLN 3,000,000 in a fiscal year are not excluded from tax deductible costs.

“Tax” EBITDA is the excess of total income from all sources of income, less interest income, over total deductible expenses, less the value of depreciation write-offs and non-debt financing costs. included in the initial value of tangible or intangible assets recognized as deductible during a fiscal year.

Thus, it is the amount of the excess of the debt financing costs incurred during the tax year (considered as deductible expenses) over the interest income received during the year, and not the amount of debt financing costs as such, which is the benchmark for excluding debt financing costs.

In tax practice, there are currently two interpretations of how the ceiling on debt financing costs is calculated.

Depending on the tax administration, which takes a position unfavorable to taxpayers, in a given fiscal year, excess debt financing costs can be classified as tax deductible costs up to:

  • 3,000,000 PLN, or
  • 30% of fiscal EBITDA,

the one who is the highest.

On the other hand, the case law of administrative courts reflects a taxpayer-friendly approach, based on a literal interpretation of the provisions in force, according to which:

  • The excess debt financing costs not exceeding PLN 3,000,000 in a fiscal year do not apply at all to the limit of recognition as tax deductible costs.
  • When in a given fiscal year the excess debt financing costs exceeds PLN 3,000,000, the taxpayer may include up to PLN 3,000,000 and 30% of fiscal EBITDA as tax deductible expenses.

The position adopted by administrative courts is of great importance for taxpayers, as in practice it allows them to include in tax deductible costs during a fiscal year up to PLN 3,000,000 more in debt financing costs only under the unfavorable approach of the tax authorities.

The proposed tax changes aim to enshrine in the CIT law the interpretation of tax administration that is disadvantageous for taxpayers.

According to the bill, taxpayers will have to exclude debt financing costs from tax-deductible costs to the extent that the debt financing costs in a fiscal year exceed PLN 3,000,000. Where 30% of fiscal EBITDA.

There is no doubt that these changes would generate additional tax burdens for businesses.

Prohibition to deduct as tax costs the costs of financing the debt of related parties for the acquisition of shares vs the possibility of deducting from the tax base the expenses qualified for the acquisition of shares

The proposed rules provide for:

  1. A total ban on deducting financing costs from related party debt, allocated directly or indirectly to operations on the capital, in particular acquisition or subscription of shares, acquisition of all rights and obligations in a partnership (not a legal person), increases on shares, capital increases or share repurchase of the company in order to redeem them.

The proposed regulation aims to thwart the tax practice of capital groups, where a taxpayer reduces income by recognizing interest on loans from related parties as tax deductible costs and allocates the proceeds of the loan to finance another. related party (for example by making a cash contribution), which results in the reclassification of the loan as equity financing and, therefore, does not generate income for the taxpayer.

  1. Consolidation relief, which would allow taxpayers receiving income other than capital gains to deduct from their tax base the expenses eligible for the acquisition of shares in companies, up to the amount of the taxpayer’s income during a financial year. taxation other than capital gains.

Not only could qualifying expenses be tax deductible under the CIT Act, but they could also (in addition) be deducted from the tax base in the tax year in which the shares are purchased. This deduction could not exceed PLN 250,000 in a fiscal year.

Expenses qualifying for the acquisition of shares would include expenses directly related to the share purchase transaction, incurred for:

  • Legal services for the purchase or valuation of shares
  • Notary fees, court fees and stamp duty
  • Taxes and other public and legal taxes paid in Poland or abroad.

Eligible expenses would not include the price paid for the shares or the debt financing costs associated with such an acquisition.

If, within 36 months of acquiring the shares:

  • The taxpayer or his legal successor disposes of or redeems the shares
  • The taxpayer or his legal successor is put into liquidation or is declared bankrupt, or
  • There are other circumstances provided for by law in which the taxpayer or his successor in title ceases to exist

the taxpayer or his legal successor will be obliged to increase the tax base by the amount of the deduction made during the tax year in which the above event occurred.

The deductibility of eligible expenses would be subject to the following preconditions:

  • The company whose shares are acquired is a legal person and has its registered office or board of directors in Poland or in another state with which Poland has concluded a tax treaty containing a legal basis for the exchange of tax information .
  • The principal object of the business of the company is the same as that of the taxpayer, or the activities of the company can reasonably be regarded as activities supporting the activities of the taxpayer (but the activities of such a company cannot constitute fundraising activities).
  • The taxpayer and the company have exercised this activity for at least 24 months before the date of acquisition of the shares.
  • In the two years preceding the date of acquisition of the shares, the company and the taxpayer were not related entities.
  • In a single transaction, the taxpayer acquires shares in the company for an amount representing the absolute majority of voting rights.

The simultaneous introduction of consolidation relief and the ban on deducting interest on financing debts from related parties is a sign of inconsistency on the part of the promoter of the amendment. On the one hand, it encourages taxpayers to acquire shares in other companies and, on the other hand, it makes it difficult to obtain financing for the acquisition of such shares from related parties.



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How To Get Debt Consolidation With Bad Credit http://www.cheekysquirrel.net/2021/08/12/how-to-get-debt-consolidation-with-bad-credit/ Thu, 12 Aug 2021 07:00:00 +0000 http://www.cheekysquirrel.net/how-to-get-debt-consolidation-with-bad-credit/ Editorial independence We want to help you make better informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and earn us a referral commission. For more information, see How we make money. It’s easy to get burdened with high interest rate debt, in particular. If you […]]]>


We want to help you make better informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and earn us a referral commission. For more information, see How we make money.

It’s easy to get burdened with high interest rate debt, in particular. If you have debts from multiple lenders. In order to stay afloat, you can make monthly payments that only cover interest, making virtually no progress towards paying off the principal balance.

But there is a way forward. Debt consolidation is a strategy that combines multiple debts into one payment at a lower interest rate, which can help you get out of debt faster. “If you have high interest debts under different accounts, consolidation is your best option,” explains Michel Foguth, founder of Foguth Financial Group, a Detroit-based financial planning firm.

Pro tip

If you are looking to take full advantage of debt consolidation loans, shop around.

One option is a debt consolidation loan, which is a type of personal loan issued to pay off debts. You then make payments on that loan instead of multiple creditors. But to get the best loan rates, you must have good credit.

Debt Consolidation Loan Alternatives

A debt consolidation loan can be the best solution for managing multiple high interest debts. However, this option is not available to everyone, especially when you have poor credit. If you have bad credit, you can work on improving your credit before you consolidate your debt. There are also other alternatives to a debt consolidation loan.

1. Negotiate with lenders

One option is to contact your lenders and negotiate to reduce the interest you pay on each debt. It may seem like a far-fetched scenario, but if you have a good repayment history, lenders will be more than willing to work with you to keep you.

2. Credit counseling

You can usually find free or low-cost credit counseling service from a non-profit organization. Emphasis is placed on education and capacity building in debt management. Credit counseling can also help break bad debt habits and establish a foundation of financially healthy behaviors to help prevent future debt scenarios. The National Foundation for Credit Counseling is a great place to start your research.

3. Bankruptcy

If your debt is completely unmanageable, you’re struggling to keep up with your bills, and finding other options to consolidate, negotiate, or settle your debts with lenders doesn’t work, you may want to consider bankruptcy as a last resort. Bankruptcy is considered an extreme measure and an option of last resort, as it will remain on your file until 7 or 10 years, depending on the type of bankruptcy you are filing.

How To Get A Debt Consolidation Loan With Bad Credit

A credit score of 720 or better is best in order to get great rates and terms on a debt consolidation loan, according to Foguth. If your FICO score is below 600, it can be difficult to qualify for debt consolidation loans. A score below 580 is considered bad credit, according to the credit reporting company Experian, which will make it more difficult to qualify for this type of loan. Because the goal is to get a lower interest rate, you want to increase your chances of getting good loan terms.

Applying for a loan when you are sure you are approved is the ideal situation, as refusing a loan can have a negative effect on your credit score.

Here are some steps you can take to position yourself to get approved for debt consolidation loans.

1. Check your credit score and examine your credit report

You can get a good understanding of your creditworthiness if you check your credit score and examine your credit report. You can get a free copy of your credit report at annualcreditreport.com. Doing this in advance will help you avoid surprises when applying for a loan. When you review your credit report, identify any items that negatively affect your credit, such as errors. You can dispute any discrepancy by contacting the assessment agency with supporting documents.

2. Pay your debt on time

Financial institutions want to grant loans to customers with a good payment history. Paying your bills on time and catching up on your debt payments makes you a more attractive borrower. If you’ve missed a payment, you can call your lender and negotiate to avoid a penalty on your credit score and save money on late fees.

3. Optimize your current credit

Ideally, you should keep your debt ratio below 40%. For example, if you have a $ 1,000 credit limit, don’t carry more than $ 400 on that card, Foguth said. This suggestion applies to all of your lines of credit. One tactic is to work to get your debt ratio below 40% before applying for a debt consolidation loan. Additionally, you may want to avoid the temptation to open a new credit card. It is not wise to apply for new credit if you are considering consolidating your loans, as it will likely have a negative impact on your credit score.

4. Get a co-signer

If you have a family member or friend with good credit ready to co-sign a debt consolidation loan, this is an option to consider. By adding their name to the application, you will benefit from their good credit history. However, there is a significant downside. If you don’t pay off your loan on time every month, their credit score will suffer. Make sure your family member understands what’s at stake before you co-sign, and you need to be prepared to commit to paying your bills on time until the loan is over.

Where To Get A Debt Consolidation Loan With Bad Credit

When you are ready to apply for a debt consolidation loan, it pays to be prepared. You will need to provide information regarding your various debts, interest rates and loan terms.

Banks, credit unions and other financial institutions offer several options for debt consolidation loans. It is important to shop around for the lowest interest rate and the best deal for your situation. “Don’t settle for the first offer you get,” Foguth said. “If you have average to good credit, you’re in charge; take it to your advantage. If you have bad credit, consider improving your credit before applying for a debt consolidation loan.

1. Brick and mortar locations

Going to multiple physical locations to find a loan can be time consuming. But investigating your options in person will prevent your information from being widely shared with other institutions. If you have a good relationship with your current bank, this is a great place to start. You can then visit other places to get more deals before you make a decision.

2. Online destinations

Buying online for a loan is convenient. It gives you a greater number of institutions to consider for your debt consolidation loan and can sometimes offer lower rates. However, this method carries the risk that your information will be shared with other companies beyond your control. “The Internet is great for shopping, but businesses will sell your information. As a result, you will receive multiple calls. If that’s right for you, this might be the best option for you, ”Foguth said.

How to handle debt consolidation

Once your debt consolidation loan is approved, your debt will be under one institution. This should make it easier to keep track of your bills, but you’ll still need to take proactive steps to manage your loan.

1. Create a budget

To take advantage of debt consolidation to pay off your debts, you have one major obligation: make payments on time and in full every month. If you’re worried about falling behind, it can be helpful to include the minimum payment amount as a cornerstone of your overall monthly budget. You will avoid guessing where this money will come from and you will be able to pay off your debt on a consistent basis.

2. Track your spending

Reviewing your spending on a weekly or monthly basis can help you stay on budget. It also helps identify patterns and behaviors such as overspending in a specific area, allowing you to adjust your spending in the future.

3. Configure automatic payment

Paying your bills on time will help improve your credit score. Missing a payment will likely cause the interest rate to rise, negating the benefits of debt consolidation – and you want to prevent that from happening. You can set up automatic payment to transfer the loan repayment amount each month (the ideal time for this transfer would be right after you receive your income) and this consistent habit can help you get your debt under control.

4. Pay more than the minimum payment

If that’s an option for you, paying more than the minimum payment owed on your loan will help you pay off debt faster and save money on interest charges in the long run. Even if it’s not within your financial means to do it every month, all the money put on your loan beyond the minimum payment will benefit you.



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Home equity loan for debt consolidation options http://www.cheekysquirrel.net/2021/08/06/home-equity-loan-for-debt-consolidation-options/ Fri, 06 Aug 2021 07:00:00 +0000 http://www.cheekysquirrel.net/home-equity-loan-for-debt-consolidation-options/ Editorial independence We want to help you make better informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and earn us a referral commission. For more information, see How we make money. If you’re a homeowner with too much debt, a financial product called a home […]]]>


We want to help you make better informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and earn us a referral commission. For more information, see How we make money.

If you’re a homeowner with too much debt, a financial product called a home equity loan can help you escape it.

While taking out a home equity loan can be risky – after all, your home is being used as collateral for the loan – the rates on the product are generally lower than on credit cards or personal loans.

“As long as you have a stable source of income and know you’ll be able to repay the loan on a timely basis, the lower fixed rates of a home equity loan make it a smart choice,” says Richard ortoli, co-founder of the New York City Law Firm Ortoli Rosenstadt srl. “However, making all of your payments on time is crucial to keep your home from being in jeopardy.”

Here is how you can determine if a home equity loan is the right choice for debt consolidation.

What is a home equity loan

Often thought of as a second mortgage, “a home equity loan is a flexible loan on your home that is usually in addition to your existing mortgage,” says Alex Klingelhoeffer, wealth advisor in a national consulting firm, Exencial Heritage Advisors. Here is a hypothetical example provided by Klingelhoeffer:

  • House purchased $ 250,000 in 2015
  • $ 50,000 down payment.
  • Five years later, in 2020, the house is now valued at $ 350,000.
  • $ 180,000 mortgage balance
  • In 2020, in this example, fairness in property is now $ 170,000.
  • “The banks will allow you to borrow money against this value [the equity] via a home equity loan or home equity line of credit (HELOC), ”says Klingelhoeffer.

Home equity loans and HELOCs use the equity in your home to allow you to borrow money. However, HELOCs work more like credit cards. While home equity loans allow borrowers to withdraw a lump sum and then repay the loan through fixed payments at a fixed interest rate. HELOCs have variable interest rates with payments that are not fixed.

Since you are using your home as collateral for the loan, the interest rates on home equity loans are generally lower than on other types of financing, especially credit cards. However, failure to pay the fixed monthly payments on time can cause the lender to put a lien on your home and possibly go into foreclosure.

Can I use a home equity loan to consolidate debt?

Home equity loan borrowers can withdraw a lump sum and use it as they see fit. Home equity loans can be a great way to get cash up front to pay off high interest bills in one fixed payment.

The interest rates for home equity loans are generally lower than those for many high interest loans, such as credit cards. If you want to save on the difference in rates, a home equity loan can be a good option for consolidating and paying off your debt.

Pro tip

A home equity loan can be a good option to consolidate your debt. But since your house is at stake, you should only take out this type of loan if you are confident that you can make the payments.

The caveat is that you need to make sure that you are able to make the loan repayments. Failure to pay could mean the loss of your precious collateral – your home. Making these payments on time is essential to avoid exacerbating or creating spiraling debt, Ortoli explains. “A home equity loan should only be used for debt consolidation if you have a stable source of income and are confident that you can make all of your payments for the new loan,” Ortoli explains.

Weighing the pros and cons of a home equity loan to consolidate debt

Advantages

  • Interest rates are generally lower than those of other loans.
  • It may be easier to qualify “since it is secured debt,” Ortoli says.
  • Able to shop for the best terms and lowest interest rates among various financial institutions.
  • The funds are received in a lump sum, so that borrowers can immediately pay off large debts and other expenses.
  • No stipulation on the use of borrowed funds.
  • The prices are generally fixed.

The inconvenients

  • Placing your home as collateral when the default could lead the lender to put a lien on your home.
  • The easy-to-access loan could mean it’s too accessible for people who are not financially prepared, Ortoli says.
  • If the home’s value goes down, home equity loan borrowers may end up owing more than their home’s value, leaving them in a deeper hole.
  • This is a loan that is in addition to an existing mortgage.

Alternative ways of debt consolidation

“At the end of the day, consolidation is a powerful strategy, but think of it as a cure, not a cure,” says Klingelhoeffer. “The real cure is to have positive cash flow and to pay off your debt at a manageable level.” Freeing up monthly cash could also help channel funds into an emergency fund and retirement. Many experts will say that it is important to start early because it is a positive step in building wealth.

If you don’t want to risk having a lien on your home, but are looking to free up cash and consolidate debt, there are several ways you can consolidate debt.

Balance Transfer Credit Card: Some balance transfer cards offer an introductory 0% interest rate. Most range from 12 to 18 months until the APR goes into effect. Several debts can be transferred to the card. If you pay off the card balance before the introductory period ends, all of your payments will go 100% on the balance instead of the balance plus interest. This strategy can help pay off debt sooner and save on total interest. Depending on the issuer, there may be restrictions on the type of debt that can be transferred, however, when a home equity loan has no stipulation on how to use it.

Personal loan: A personal loan could be a better or a worse option depending on the APR you qualify for. If the personal loan is unsecured, it means that you will not have to use your home as collateral. And if you can get a personal loan rate that is lower than the home equity rate, it could work in your favor. Generally, you can use the personal loan funds however you want. Be careful, however, of origination fees and prepayment fees.

Debt management plan: If you have unmanageable debt and need help sorting through your options, a credible credit counseling agency can help. We recommend that you use an agency qualified by the National Foundation for Credit Counseling.

Debt Settlement Plan: Using a debt settlement service can help you in the process of negotiating your debts. However, the service is not free. Ultimately, you don’t need to pay for this service since you can contact creditors directly and ask to negotiate or settle the outstanding balances yourself.

Refinancing: Interest rates are low right now, so if you are a homeowner, you may be eligible for new great loan terms. Refinancing a 30-year mortgage can allow you to spread the loan balance over 30 years versus 10 years like with a home equity loan, says Chuck czajka, founder of a financial consulting firm Macro-currency concepts in Florida. If refinancing reduces your monthly mortgage payment, you can use the freed up cash to pay off your debt.

A cash refinance can also work by taking out a new mortgage for more than what is owed, but getting a check for the difference, to be used as desired, at closing. Refinancing the entire mortgage and taking out the equity needed to pay off debts is an option to consider, explains Czajka. Pay close attention to closing costs. Closing costs could exceed the cost of your debt.

How To Get A Home Equity Loan For Debt Consolidation

If you decide that a home equity loan is the best option for you, here’s how to get started.

  1. First of all, it is important to know the value of your home in order to know your equity.
  2. Check your credit score and take steps to increase it for a better rate.
  3. “You can get a home equity loan for debt consolidation by first applying to the bank that holds your mortgage,” Czajka. “This bank will likely know you and be able to help you get through the home equity loan process faster.”
  4. Buy and compare the best rates, terms, and fees with at least three lenders before you apply.



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Snowball, Avalanche, or Debt Consolidation – Which Is Better For Debt Elimination http://www.cheekysquirrel.net/2021/08/04/snowball-avalanche-or-debt-consolidation-which-is-better-for-debt-elimination/ Wed, 04 Aug 2021 07:00:00 +0000 http://www.cheekysquirrel.net/snowball-avalanche-or-debt-consolidation-which-is-better-for-debt-elimination/ If you are currently in debt, you are probably looking for a way out. Fortunately, you have several options: snowball debt, debt avalanche, and debt consolidation loans. In this article, we’ll cover what each is and their respective pros and cons, so you can choose the one that best suits your financial needs. What is […]]]>


If you are currently in debt, you are probably looking for a way out. Fortunately, you have several options: snowball debt, debt avalanche, and debt consolidation loans. In this article, we’ll cover what each is and their respective pros and cons, so you can choose the one that best suits your financial needs.

What is the debt snowball method?

Debt snowball is a method of debt repayment that prioritizes paying off smaller amounts of debt first. You will continue to pay the minimum amounts on all of your debts to avoid late fees or damage your credit card, but any extra money will go directly to the smaller debt. Once that is paid off, you will focus on the second smallest debt, etc.

Pros and Cons of the Debt Snowball

The debt snowball is very motivating and well suited for people who need the extra encouragement to pay off their debt. However, since you are focusing on the smallest debts rather than the highest interest rates, you might not save that much money overall.

Best for: People who need an extra dose of encouragement to finally cross the finish line debt free.

What is the debt avalanche method?

The Debt Avalanche Method is a repayment method that first focuses on eliminating debt with the highest interest rates. You will still make all of your minimum payments, but instead of the smaller amount, you will be spending your extra money on debt with the higher interest rate. Once this is fully paid off, you will move to the second highest interest rate, and so on.

Advantages and disadvantages of the debt avalanche

The debt avalanche method is the best way to save the most money overall because you will be saying goodbye to those high interest amounts. However, paying off these debts can take some time, which can be daunting for some.

Best for: People who want to save that money and scrap those high interest payments.

What is debt consolidation?

Debt consolidation involves combining multiple debts into one payment which ideally has a lower interest rate. With a debt consolidation loan, you will transfer multiple debts to a single monthly payment with a fixed repayment period.

Pros and Cons of Debt Consolidation Loans

Debt consolidation loans usually have lower interest rates than credit cards, so you can save money. They also make it easier to pay bills, since you only have to worry about one payment per month.

Best for: People who want to make paying their bills easier and saving money at the same time.

Conclusion: which one is right for me?

The best debt elimination strategy is the one that best meets your financial needs and, ultimately, one that you can stick to. Whether you need to pay off your own Oprah debt (debt snowball), a way to ruthlessly save money (debt avalanche), or a method to make paying your bills less of a nightmare. , We have what you need.



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