Regaining Financial Health
Living with debts is a seemingly natural but a harsh reality in our lives. We borrow a little for college, some for our car and a bit more for weddings and honeymoons. Big or small, debts have a way of mounting.
Financial troubles should not make you lose hope. There are many solutions to regain financial health. All you have to do is act to cure the defect. First off is to consider available options.
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1. Create a plan of possible expenses according to priority.
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2. Reduce unnecessary spending such as vacations, expensive entertainment and impulse buying. Instead of dinners in expensive restaurant try a barbecue. Aside from reducing the expenses
this is an opportunity for the family to bond. Clipping coupons, purchasing off the rack clothes, and taking advantage of sales are several techniques to scrimp and save.
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3. Try not to use the credit card as a ticket to an unlimited spending spree. Remember that these purchases will have to be paid later.
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4. Selling assets such as cars and vacation houses will not only realize cash but will reduce maintaining expenses.
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5. Living like broke college students (at least until the crises is over)would greatly help reduce expenses.
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Another option is a debt consolidation loan. If you have several monthly payments or a number of different loans, A debt consolidation loan can be your best friend when you are juggling too many debts. Consolidation loans merge all your debts and bills into a single payment. You can make things easier by consolidating them and taking one single loan to pay off the total debt.
Consolidation Loan
When you take a loan in order to pay all your existing loans or some of it, then that process is called debt consolidation. This can usually be done by putting together all your loans and then proceeding to create a single loan out of it. But in order to be granted a new loan to complete the part of the debt consolidation process, you also need to be able to put collateral with the lending organization.
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Debt loan consolidation can be done in two ways; one may request either an unsecured or a secured debt loan consolidation. Both of these practices have advantages as well as disadvantages. Let’s take a quick glance at them now.
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A secured debt consolidation loan can be requested for by putting a property as collateral. Sure, this does put your property, most commonly the home, at risk because in case you cannot pay the loan back you will lose your property. However, if you have home equity then you can use it to get a higher amount of loan. The interest that your lender might charge on the secured debt consolidation loan would also be generally lower than that charged on an unsecured loan.
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When you apply for an unsecured debt consolidation loan, you are basically asking to be given a loan without having to put collateral with the lending company. While it puts none of your properties at risk of being repossessed by the lender in case you go bankrupt, the interest rate charged on your unsecured debt consolidation loan will be relatively higher than the one charged on a secured loan. Chances are that you will also be required to clear an unsecured loan in a shorter duration of time than a secured one. If you are sure of your financial situation for the future then this kind of loan is a good option.
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Hopefully these will give you some ideas how you can regain your financial health, to proceed with wealth building in next charter of life.