Debt Management With Debt Consolidation Loans: A Smart Move By Smart People

Multiple debts against your name that you owe to different creditors not only drains away your income (especially, if they carry high interest rate, such as credit cards) but also rob your peace. It is generally very difficult to manage multiple debts efficiently.
Larger sum of money can be borrowed at a lower interest rate. So, it makes sense to consolidate your small multiple debts into a single loan amount. Debt consolidation is a smart way to address your debt problem.

A careful approach while collating your debts using debt consolidation loans will not only help you to streamline your finances but also enable you to get rid of the debts in the long run. While applying for a debt consolidation loan, try to borrow only that much money which is just sufficient to pay off the existing debts. Also, try to avoid borrowing money for a period greater than that of your existing debts.

Take utmost care while selecting a debt consolidation company. Do a thorough research on the various companies offering a debt consolidation loan and select the one that is most suitable for your individual circumstances. You can also receive debt consolidation loans [] online by just filling up a simple form.

If the total debts you owe to different creditors are not enormous, then you should opt for unsecured debt consolidation loans to consolidate the debts. Unsecured form of loans does not necessitate submission of security. So, it is a completely risk-free option you can use to consolidate your debts.

Debt consolidation is definitely a much better option than bankruptcy. It is very easy to surrender to (unfavourable) circumstances but it takes courage to face the situation and find a means to resolve the problem. Filing for bankruptcy puts a big black mark on your credit history that is difficult to wipe off. On the other hand, debt consolidation loans enable you to bring your debt situation under control and eventually eliminate debt from your life by repaying the consolidation loan on time.

Different Finance Sources For Motor Vehicles!

However, it is important to know the pros and cons of each loan product in order to decide for the finance source that best suits your needs.
Within a matter of hours you can obtain all the money you need for purchasing your desired motor vehicle. However, as motor vehicle loans differ from regular car loans, you should be extra careful when negotiating the loan terms. It is possible to obtain inexpensive financing, but it is as well possible to close on too onerous deals.

Motor Vehicle Loans

There are loans specially designed for purchasing motor vehicles, they are similar to car loans but have different loan terms adjusted for the higher or lower prices that the different motor vehicles have along with the different amortization periods, etc. The different characteristics that motor vehicles have will determine the loan terms like: loan amount, interest rate, repayment program, insurance fee, closing costs, etc.

Motor vehicle loans are secured loans that use the vehicle as collateral and thus, can offer lower interest rates than unsecured personal loans and other unsecured loan types. The rest of the loan terms are also more advantageous and qualification for these loans is also a lot easier. Credit and income requirements are lessened but remain an important issue and vary according to the purchase price of the vehicle.

However, you should bear in mind that for high price vehicles, these loans require high incomes because the amount of the monthly payments can be significantly higher than that of car loans and thus, if you don’t have the money needed and the repayment program cannot be stretched anymore you may need to resort to other finance sources.

Loans Based On Home Equity

A good alternative would be then to resort to home equity loans. Since home equity loans can be used for any purpose, it’s not strange that many people use them for purchasing cars or other motor vehicles. These loans provide all the funds needed for such transactions and many advantages over regular car loans and motor vehicle loans.

Home equity loans are based on home equity and thus imply less risk for the lender than other unsecured and secured loans like motor vehicle loans. This is due to the fact that a real estate property is usually more valuable than a motor vehicle (There are obviously some exceptions). This risk reduction has consequences on the loan terms.

Thus, with a home equity loan you can get really high loan amounts but at the same time you can obtain significantly lower interest rates and longer repayment programs than with motor vehicle loans. Thus, you’ll be able to get lower loan monthly payments that will be easier to afford without having to make sacrifices in order to do so. This is why when it comes to expensive motor vehicles, home equity loans can be an excellent finance source.

Alternatives To Car Dealership Financing!

There are traditional banks and lenders offering car loans and non traditional lenders too offering car loans for people with bad credit or financial difficulties. Thus anyone seeking finance to purchase a car can get approved with significantly lower costs than financing with a car dealership the purchase of the vehicle.

Car Dealership Financing’s Drawbacks

Financing through a car dealership can be extremely expensive. The interest rate charge by dealerships is almost doubling the interest rate charged by traditional lenders. These high prices are due to the fact that when you resort to car dealerships for financing there is a third party that provides the funds. Thus you are paying for the services of two roles: The actual lender and the intermediary.

Besides, car dealerships only offer financing for the cars that they sell. Thus, your options as regards to brands and models are limited. And if you happen to find a private lender offering for sale the car of your dreams at a very advantageous price, you can never resort to a car dealership in order to get the funds for purchasing the car.

Traditional Lenders and Banks

Banks and traditional lenders offer finance for car purchases at very reasonable rates. Car loans are secured loans and thus carry low interest rates compared to personal loans that are unsecured. However, in order to get approved you need to show proof of a clean credit report and a steady income that will let you afford the monthly payments.

A car loan offered by a traditional lender will let you purchase any car you want and also if you visit car dealerships after getting approved for a car loan you can always bargain the price of the cars with the dealer and have more options as to the brand and model of the car that you’ll purchase.

Non Traditional Lenders

Car loans offered by non traditional lenders provide financing for those with irregular credit and income situations. You need to always show proof of a suitable income, but you don’t need to prove that you’ve been in the same job for many years or that your wage is deposited into your bank account.

Besides, the credit requirements are relaxed and anyone can get approved for a car loan as long as there are no mayor delinquencies in their recent credit history. Someone with bad credit, no credit at all or even a past bankruptcy on his credit report can obtain car loan financing through these non traditional lenders.

Where to Find Them?

The best way to obtain finance through a non traditional car loan lender is to seek lenders online. You can do a quick search for bad credit car loans online and you’ll find many online lenders willing to offer you finance regardless of your credit. You may have to face slightly higher rates but the monthly payments are always affordable enough so any budgets with a regular income can meet them without sacrifices.