Parenting and Debt Consolidation Loans- Tips for Getting out of Debt

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Debt is a problem that many households struggle with. Parents often accumulate debt from mortgages, credit cards, childcare costs and unexpected events. Without emergency funds to cover unforeseen circumstances and still being burdened by other lines of debt such as student loans, you can end up with a difficult financial situation.

Debt Consolidation

Consolidating debt refers to the process of combining the accounts that are paid on a monthly basis into a single payment rather than paying different creditors. This can help people save substantial amounts of money and make it much easier to pay your debt. There are different ways to consolidate debt and just like with any other important financial decision, you need to choose an option that is best for you and your family.

While considering the options that are available, it is important to note that debt consolidation works effectively as long as you do not maintain financial habits that will land you further in debt. The best consolidation method is one that will simplify debt repayment as well as save money during the period of the loan with benefits such as reduced interest rates.

Types of Debt

Secured debt means the money owed is attached to property of the same or higher value. The debt is secured because failure to pay may result in property being seized to cover the amount that you owe. Examples of secured debt are mortgages and automobile loans.

With unsecured debt, no property is directly related to the loan and there will be nothing to seize if payment is not made. Common examples of this type of debt include credit cards and student loans. The higher interest rates on unsecured debt cover the risk of not being able to take property and get back the money that is owed if a borrower fails to pay. Get a debt consolidation loan here.

Credit Cards

• Consolidating strategies range from new credit cards to remortgaging. Depending on how much you owe and the debt you want to consolidate, the best type of plan will vary. The most common type of unsecured debt is credit cards. Credit cards are well known for attracting high interest rates and this is why it is important to try and consolidate and reduce such debts.
• Personal loans give you the opportunity to access enough money that you can use to pay off credit card debt and leave a single payment. This is a worthwhile option if you are able to fid loans with interest rates that are significantly lower than the current what you currently pay on a credit card.
• You can also consolidate numerous credit cards and transfer the balances to a single card. This is a good option for new cards and having some time before you are required to pay interest. During this introductory period, you will actually be making interest-free payments as long as you make good progress on what you owe.

Student Loans

For student loans your options will be determined by the lender and you can consolidate them through refinancing, repayment based on income and remortgaging. When you are deep in debt, you need to understand your situation and find the best financial strategy for your needs.

Bio

Willis James is a freelance writer whose key areas of interest are business, finance and real estate. He enjoys reading inspirational books and watching historical films. He spends most of his free time with his wife and child. Find out more about how to get a debt consolidation loan here.

Kecia

Kecia Hambrick is a work at home mom, wife, blogger, VA, and writer. She offers the world parenting advice at Momerish.com and helps other moms build and grow their online income at Online Income Mom! When she’s not online, Kecia loves to hang out with her two active boys, go bowling, watch movies, and read!

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