What is CIBIL Credit Report?

What is CIBIL Credit Report?

Credit Information Bureau (India) is also known as CIBIL. The CIBIL is owned by various government and private sector banks and financial institutions.

Let me tell you that what is the function of CIBIL?

Well, CIBIL collect your all kind of financial information and store it for the future references. It mainly store your name, PAN, Passport number and various payment history with your lenders. Say for example your credit cards payment history, default history of your personal loans, car loans, home loans or any other kind of loans..etc..

In short, CIBIL maintains the record of all of your credit history and shares this report with other lenders. So that before giving you a loan/credit, your lender will see your CIBIL report and see your credit worthiness and approve you for the loan.

This credit report can be accessed by all the lenders and financial institutions of India. You can also access your CIBIL credit report from their website.

You will have to submit few documents and pay Rs.142/- demand draft to get your own credit report. Thus, let me tell you that don’t default on your credit payments.

The more you will default, the more less likely you will get approved for the various types of credits and loans in the future. CIBIL credit report is becoming popular day by day.

How To Keep Debt Manageable

How to Keep Debt Manageable

We live in a consumerist society. Television alerts us to the latest "must-have" gadgets. It is tempting to just buy now and pay later. Most of us have credit cards, so this is easy to do. Being indebted is the norm in western society, but it is important to not let this debt get out of control. A few helpful pointers will help one avoid the need for debt collection.
Debt Is Sometimes Necessary
In an ideal world, people would not need to go into debt. Indeed disciplined saving can allow consumers to buy products immediately, and out of their own means. Unfortunately, most people would spend the best part of a lifetime trying to save up to purchase a property outright. Unexpected expenses, like a costly, but necessary car repair or replacement may leave debt as the only option to fill this need.
Level Of Debt
People need a house to live in, and often need a car to get to work. It's important to remember that this car doesn't need to be the latest, smartest model, and the house doesn't need to be in a prime area. While these options are nice, they are just that - options. If one has to stretch one's means to the limit, and go deeply into debt, then such decisions should be reconsidered.
Maintain A Buffer
When considering major purchases that require going into debt, sit down and calculate what is affordable, after all other expenses have been considered. You might consider this affordable today, but if one's financial situation took a turn for the worse, it may no longer be affordable. It is therefore important to give oneself a healthy buffer. One should not lose any sleep over a debt if it can easily be serviced. If one is losing sleep from the outset, then what will happen if things deteriorate? 
Expect Interest Rates to Rise
It is foolish to expect interest rates to remain constant. Factor in potential repayments where rates are a few percentage points above current rates, before taking on any new debt.
Lock in to Fixed Rates At Appropriate Times
On major loans, like home mortgages, it is worth considering fixing home loan rates when it is advantageous (ideally when fixed rates are lower than longer term averages). If one cannot service a somewhat higher loan repayment, then this might be one's only option. Be aware that fixed rates are often much higher than variable interest rates, as they anticipate future rate rises. The consumer needs to decide roughly how much rates might rise, in deciding whether a fixed rate is worthwhile.
Use Windfalls to Pay Down Debt
When an opportunity arises to reduce one's indebtedness, one should seriously consider it. Windfalls like an inheritance, work bonus or payout are prime examples. It is tempting to use such proceeds on a splurge, but using at least some of these funds to reduce existing debt will free up future earnings for other options.
Pay all Debts on Time
Once debts start to get unmanageable, they can quickly spiral out of control. Late payment fees further increase indebtedness, and make loans even harder to service. It is therefore worthwhile getting into good habits early. Paying debts on time will keep interest payments low, or maybe even non-existent in the case of interest free periods for credit cards.
Availability of credit does provide some wonderful advantages to consumers. One must remember that poor management of credit will make it harder to come by in future, and may lead to debt recovery of existing debts. Use credit wisely, and one should be able to keep it at a manageable level.

Getting Out of Debt is Always not a Good Thing

Getting Out of Debt is Always not a Good Thing

The age old financial advise is – Get out of Debt, Cut Down your Credit cards and Never borrow money if you want to become financially free and rich.

Well, This advise was really true advise once upon a time (Before 1971) when the world was following the Gold Standard means when the money was backed by gold.

But well, today the money is no longer the derivative of gold but it is a derivative of the debt and that’s why the rules of money have been changed.

There are basically two types of debt – Good & Bad.

If you can understand the basic difference between the Assets and Liabilities than you will understand that any debt that is used to acquire assets is known as a good debt while any debt that is used to acquire liabilities is a bad debt.

The above financial advise is effective for the bad debt only. In reality, the rich take more and more good debt to become richer and richer. But well, unfortunately the financial planners and gurus from all around the world develop the mindset in people that debt is bad and you should get out of it as early as possible and you should never borrow money.

This financial advise generates a false mindset in people which prevent them to take a good debt. While rich teach their kids about good and bad debt and its importance and that’s why the kids of rich people grow younger they take more and more good debt to acquire assets and get richer and richer.

Remember that, Getting out of debt is the financial advise of middle class people. This advise creates a false mindset in your mind which will prevent you to take a good debt which is very necessary to become very rich in your life.

Unfortunately, our schools don’t give us any kind of financial knowledge about good and bad debt. And yes, believe me getting out of debt and stay away from the new debt is not a real financial education that the financial advisors from all around the world give you.

You should get out of only bad debt as early as possible and stay away from it but you should take more and more good debt to acquire more and more assets to grow the asset column of your financial statement.

If you want take such kind of real financial knowledge about money than Download my FREE eBook – My Journey To Billionaire Club: What Rich Teach Their Kids about Money that Poor & Middle Class don’t?

My eBook is FREE to download and by following the above link you can instantly download my eBook without any annoying registrations. Just read my eBook and learn the 6 basic lessons on money and 10 commonest Myths about money. And yes, Don’t forget to spread this Financial Awareness…!!!

How To Trade Debt Instrument?

How To Trade Debt Instrument?

Debt Instrument market is very huge market. It is the larger market than the stock market. First of all let is understand what it means by Debt Instrument?

A debt instrument is any type of documented financial obligation that describes a debt that is assumed by the issuer of the document. Here are the types of Debt Instruments.

- Notes
- Bonds
- Certificates
- Mortgages
- Leases
- Commercial papers
- Treasury Bills
- Certificate of Deposit...etc...

Debt instruments are a way for markets and participants to easily transfer the ownership of debt obligations from one party to another. Debt obligation transferability increases liquidity and gives creditors a means of trading debt obligations on the market. Without debt instruments acting as a means to facilitate trading.

Recently the Government of India has started the Interest rate futures. However, Road to Vibrant Debt Market is not easy. In Countries like India a retail investor can not trade in the Debt Instruments. Only the Institutional Investors like Mutual Funds, Large Corporations and Insurance Companies can trade in the debt instruments.

However, in the developed markets like USA, it is really easy to trade Debt Instrument. Because of the highly liquid US Debt market, it is really easy to trade in the debt instruments. Many Real Estate Investors in USA trade in the mortgages and make lots of money.

However, India is in the Nascent stage of Debt instrument Trading...!!!

Debt Relief

Debt Relief

Debt relief is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations.

There are several debt relief programs available in united states. Most of the Americans start searching for debt relief programs when they find themselves in a deep and growing debt that they can not repay even though they earn a lot.

People fall into a debt trap because of their hyper consumer habits. Most of the Americans simply love credit cards and other varieties of debt. They simply can’t resist their temptation to buy a new car, home or electronics. But they can’t afford it. So what they do is, they take a loan and borrow money to buy that thing.

And over the time they accumulate huge amount of debt up to their eye balls and one day in the morning when they wake up, they find themselves in a huge debt and from that day, their days of enjoyment disappear and attempts to get out of debt start.

There are several ways to get out of debt such as Debt Consolidation, Debt Settlement…etc.. Debt Relief is one of the way to get out of debt.

However, going for a debt relief program means damaging your credit score. There are several debt relief scams also. Many Scamsters exploit the need of people who are in deep debt by offering them debt relief solutions and ask them for few thousand dollars.

However, these are just the scams and nothing else. Debt Relief can also for Governments such as World War II Debt relief.

Debt Settlement

Debt Settlement

Let us discuss about debt settlement today. Many people have a false belief that, Debt settlement & the debt consolidation are the same thing but well, this is not true. Debt settlement is entirely different than the debt consolidation loan.

Debt Settlement is also known as Debt negotiation or debt arbitration. It is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full.

Suppose you have taken a loan of $ 200,000 from your credit cards to build your own successful real estate empire. But somehow, your business fails and now you can not pay whole of this amount to the credit card company even after going for a Debt Consolidation loan because the loan you have taken is so higher, than the Debt Settlement is the only option for you.

Here either you directly contact your lender to negotiate the term or you can hire the agent who negotiate the terms of debt settlement on your behalf. Now, your lender agrees to settle all the amount if you agree to pay US $ 50,000 as a full payment.

This is debt settlement. But remember that, negotiating your bills is a legal thing but its not the best option all the time. If possible you should not take a debt at all. Debt Settlement is not a good thing for your credit.

US National Debt Clock

US National Debt Clock

Wohha…..See the above Screenshot. It’s a real time US National Debt clock. The US National Debt is US $ 12.362 Trillion in February 2010 when I am writing this Article. Can you imagine that US $ 12 Trillion of Debt and this debt is rising like a mountain peak every second….!!!!

Here are few staggering Debt Figures (February 2010) -

- US National Debt – US $ 12 Trillion

- Debt Per Citizen – $ 40,057

- Debt per Tax Payer – $ 113,127

- US Federal Spending - $ $ 337 Billion

- US Federal Budget Deficit – $ 129 Billion

- US Total Debt – $ 57 Trillion

- Total Debt per Citizen – $ 177,565

- Total Debt per Family – $ 679,809

- Income per Family – $ 6092

Here are the Figures about US Government Money Creation -

- Federal Reserve Monetary Base – $ 1.852 Trillion

- Currency & Credit Derivatives – $ 638 Trillion

- US Government Bailouts – $ 7.5 Trillion

US Debt Held by Foreign Countries  - $ 3.815 Trillion

US Total Trade Deficit – $ 45 Billion

US Trade Deficit to China – $ 21.816 Billion

Social Security Liability – $ 14 Trillion

Medicare Liability – $ 74 Trillion

Thus, whole the United States is sitting on a huge mountain of debt. And on the top of this, the US Government is borrowing more money to repay the existing debts and not only this but it has started printing money in true sense now.

Previously the bailouts were in millions and billions but now they are in trillions.

And even after so much of debt, the government says that “We are out of Recession”.

Debt Consolidation Loans

Debt Consolidation Loans

If you are living in United States, than you must have heard about the Debt Consolidation & Debt Consolidation Loans. However, if you don’t know what is debt consolidation than read my article about Basics of Debt Consolidation & How it works?

Most of my American friends ask me that, “Hey, I have taken the Debt Consolidation loan recently. But it did not work for me. Please opine.”

The obvious question is – Do Debt Consolidation loans really work? And if they work than why most of the people say that it did not work for them? Well, the Truth is that, the Maths behind the Debt Consolidation loan really works but in real life it doesn’t work for most of the people.

This is because debt is not only a mathematical game but it’s the emotional game also. Debt consolidation loans don’t work for all the people because all the people don’t change their financial behaviour. Well, I am talking about bad money spending habits and compulsion to use your credit card very often.

Debt consolidation loan is a long tenure, low interest loan usually backed by your home. Once people go for it, their monthly loan payment reduces to almost half and their credit card limits are revert back. Now, ideally you should stop borrowing more money once you go for this loan. Ideally you should cut down all of your credit cards once you go for this loan.

But most of the people don’t take any action. They don’t stop borrowing more money. In fact, they start borrowing more money because now their credit card limits are un-freezed and their monthly loan payments are reduced to half.

So if you want that, debt consolidation loan really work for you than first of all stop borrowing more money. Cut down all of your credit cards and change your bad spending habits. Than and only debt consolidation loan will work for you.

Debt Consolidation

Debt Consolidation

Let us today discuss something about Debt Consolidation & How it Works? I am sure that, you MUST have heard about the name “Debt Consolidation” very often if you are living in United States. This is because “Debt Products” are the most commonly marketed products and thus the Debt consolidation services. Today I will explain you in simple words that What is Debt Consolidation & How it Works?

Well, See. Debt Consolidation means taking one low interest loan (usually backed by your home) to repay several high interest loans mainly several credit card debts.

This is the simplest explanation of debt consolidation and everything in this world about debt consolidation services to debt consolidation programs revolves around this single but very fundamental definition.

Explanation of Debt Consolidation -

Most of the Americans are hyper consumers. They take multiple loans to fuel their heavy status life style. They scratch all of their credit cards up to last dollar and finally one day when they wake up, they find themselves into a deep debt up to their eyeballs.

Now, they can’t afford to pay even minimum payment dues on their credit cards and they start defaulting. And thus, the debt grows larger and larger. And now they need debt consolidation services.

Means here, the debt consolidation firm/agent will negotiate with your lenders and help you to convert your unsecured high interest paying loans into a single small payment and low interest rate loan usually backed by your home.

Say for example, if you are a deep debt of $ 40,000 and out of which $ 10,000 is of personal loan of 10% per annum and $ 30,000 is your Credit Card debt having 15% interest annually. And your loan tenure is 3 years than debt consolidation will help you to convert this loan into a 6 years loan having just 8% of interest rate.

Remember, Debt Consolidation programs do 2 things.

01) They increase the Tenure of your loan so you end up paying almost 30-80% low monthly payment

02) They convert your unsecured, high interest paying loans into the secured and asset backed loans usually backed by your home.

Does Debt Consolidation Really Work? -

The Industry insiders say that, Debt Consolidation has not worked for 78% of the people. Than why debt consolidation companies do aggressive marketing? Well, This is because they make money from this.

The reason why Debt Consolidation don’t work for the most of the people is because they haven’t change their bad money spending habits and the financial behaviour. Most of the people who go for Debt Consolidation end up with more debt after a year. Because once you go for debt consolidation, your credit cards will be revert back to their original credit limits. Now, you haven’t change your financial behaviour and bad money spending habits so you will continue scratching your credit cards and thus after a year or so, you will now have 2 debts. One is Home backed Debt Consolidation loan and the other is Credit Card debt.

Now, the only option remains for you is Bankruptcy. So before going for a debt consolidation, I advise you to change your financial behaviour and bad spending habits.

Debt Reduction Companies

Debt Reduction Companies: Do they really work?

Many people have asked me that, How do Debt Reduction Companies work? Do they really work or are they some kind of Scam? Well, see there are some debt management companies which are scams. They offer to reduce your debt by 90% and ask you for higher fees. But at the end, they don’t do anything for you. However, almost all the other debt management companies are genuine.

How rapidly you will be out of your debt really depends on your current income level and how much deep you are in debt. There are several debt reduction strategies that these debt management companies use. You can read my article,

Debt Reduction Strategies

However, before choosing a debt management company, you should check its past record and its customer feedback. Some debt reduction companies offer you to reduce your debt by 90%.

It really depends on what they mean by "reduce your debt by 70%" and most likely it is "up to 70%" and not all customers can get a 70% debt reduction.
What could this mean?
Several things. One could be bankruptcy. Several "companies" and "debt counselors" are just fronts for bankruptcy attorneys. A Chapter 13 bankruptcy can significantly reduce your debt. All your creditors get notified and have to respond in order to maintain their claim on you. If they don't respond, they lose out and you don't have to repay the debt.
A judge will then look at your income and decide what you can afford to pay toward your debts each month. S/he then decides how long you will make payments and what portion of each payment goes to which remaining creditors.
But, of course, a bankruptcy on your credit report completely hoses your credit. You can still borrow money, but you will be paying 25% rates and it will cost much more in the long run. Also your bankruptcy may not be approved and you could end up owing the attorney money for his/her time.

These companies realize that you probably will continue to get further into debt, but by doing this you will continue to be a good customer for them. If they make money off of you, they have a motive to keep making money from you. So do they really want to see you get completely debt free or just remain a steady customer?
Watch out for companies that want a large up front fee (more than $200) or will charge monthly fees to manage your bills. Watch out for companies that claim they can clear up your credit report; some try illegal tactics that will get you (not them) into trouble. Remember you are considering employing them to negotiate with your creditors on your behalf; be sure you know exactly what they are going to do and say. If they don't disclose their methods, watch out.

Debt Reduction Strategies

Debt Reduction Strategies: Debt Elimination Program

Debt is a disease. It is the major reason why people can’t become financially free and enjoy their life. If you are Debt free than you can become financially free very fast. I will teach you in this article that how you can reduce your debt? Following are the simple but very effective dent reduction strategies.

01) Borrowing from Family & Friends

If you can borrow money from your friends or family members to get out of high interest paying debt than consider yourself lucky. This is because not the everyone is lucky like this. However, keep in mind that this method can spoil your relationships also if you can’t repay the borrowed money.

02) Budgeting & Debt Snowball Method

Before going to Debt management company what you can do is, you can do proper budgeting of your expenses and apply the debt snowball method (Paying low balance debt first and divert the additional cashflow to repay the next number of debt.). For many people, the debt snowball method has worked to reduce their debt by 90%.

03) Debt Consolidation

If first two options don’t work for you than go for professional debt management company. Debt Consolidation means taking one low interest, asset backed (usually Home) loan to repay all the other high interest loans. The debt management company can negotiate the terms with you. However, think wisely before going for this option because if you can’t pay your debt consolidation loan than you may lose your home.

05) Credit Counseling

For many people, credit counseling is a good option. After all, inmost cases you can lower your interest rate, lower your monthly payment, and combine your credit card bills into a single payment.

06) Debt Settlement

If bankruptcy seems like the only option, then debt settlement (also called debt negotiation) may be a good alternative. The process of settling your credit card bills (paying them off for less than you owe) is a more aggressive approach to getting out of debt. But if you are behind in your payments, this can be a less drastic step than declaring bankruptcy.

07) Bankruptcy

Typically, bankruptcy is the last alternative. And with the new bankruptcy laws put into place in October 2005, you should consult with a bankruptcy attorney before considering this option. With good reason (for the most part), having your debts “written off” through bankruptcy has become more difficult. So, find a good lawyer, and discuss your options carefully.

Debt Reduction Spreadsheet

Debt Reduction Spreadsheet based on Debt Snowball Method

Recently I have posted the article Debt Reduction Calculator. In the article, I have posted the link to download Debt Calculator. That Debt Calculator is on spreadsheet and based on Debt Snowball method. Here is a Link of Debt Calculator on Spreadsheet.

Debt snowball is the effective method to get out of debt. Here you pay the smaller amount of debts first and gradually divert that additional cashflow towards paying the larger amount of debt. This has psychological effect of seeing the number of debts disappear.

If you are in a deep multiple debts up to your eyeballs than this debt reduction spreadsheet based on Debt Snowball method is the best tool for you. You can easily fit your own debt related information and analyze all of your debt Information.

You can not get out of debt by simply passing over this problem to some debt management company. You personally have to work hard and vigorously to get out of debt. and this spreadsheet will help you to get out of debt very well.

Most of the time people complain that debt reduction strategies did not work for them. This is because they have approached the debt management companies but never take the serious action to get out of the debt and this is the reason Debt consolidation and debt management strategies did not work for them.

If you really want to get out of debt than download this spreadsheet and start working on reducing your debt first.

Debt Reduction Calculator

Debt Reduction Calculator for Excel 1.2

Download CNET Debt Reduction Calculator

This is a great Debt Reduction Calculator on Spreadsheet. I have gone through this. It’s amazing. What I like about this calculator is that, It is made on the Debt Snowball Method.

Lowest Balance First: Get the benefit of the snowball effect, but you may pay
more interest in the end than Highest Interest First. The main benefit of this
approach is the psychological effect of seeing the number of debts disappear
more quickly. Highest Interest First: This strategy results in the lowest total interest, but depending on the balance of your higher interest loans, it may take you longer to see your first loan/debt completely paid off. If the difference in the total interest is not significant, than you may get more satisfaction from the Lowest Balance First method. Tip 1: If you want to use the Lowest Balance First method and you have two debts that are close to the same balance but have very different interest rates, you may see a substantial reduction in the total interest paid if you change the order of the two entries so that you pay the higher rate first. In that case, try using the Order Entered in the Table strategy. Tip 2: Like Tip 1, if you want to use the Highest Interest Rate method, and you have two debts with similar rates but very different balances, you may want to change the order so that you pay off the lower balance first. This may make very little difference in the total interest, but it can make you feel better faster. Tip 3: Update the Creditor Information Table every few months. Your minimum payments may change over time as the balance in your accounts change, or if your interest rate changes. You may be able to further reduce your overall interest and reduce the time to pay off your debts, by re-adjusting your minimum payments every few months. This would mean starting over with a fresh template, entering the new Balance Date, and updating the Creditor Information Table.

Credit Card Debt Reduction

Credit Card Debt Reduction & Settlement

Credit Card Debt is a worst kind of debt. And around 75% Bankruptcies in USA are filed because of the Credit Cards. And that’s why several Debt management companies are providing Credit card debt reduction services to people.

What is the difference between Credit Card Debt Work out & a Debt Consolidation? -

For the context of this discussion I refer to a credit card debt workout as a negotiated settlement of credit card debt. For example if you owed $5,000 on a credit card and made an agreement with the credit card company to pay $2,000 instead of $5,000 as settlement in full on the debt, this would be a credit card debt workout. Firms who perform this type of work may identify themselves as debt management, debt reduction, debt relief, debt workout, debt settlement or a host of other names inferring they help with debt even sometimes including debt consolidation. However, I define debt consolidation as a reorganization of the debt through a credit counselor or taking a debt consolidation loan to pay of the debts in full. Other FAQ’s on this site address each of these debt elimination options individually.

Who is eligible for Debt Workout?

Creditors agree to debt reduction arrangements where they feel a settlement of the debt will be in their best interest. In most cases they come to this conclusion because the person requesting the debt negotiation appears to be a legitimate candidate for bankruptcy. Knowing that in most bankruptcy cases they would receive nothing, they opt to take a discounted settlement on the debt rather than receive zero dollars in a bankruptcy.

When you applied for credit, in most cases, you authorized the creditor to inspect your credit report when necessary. As part of the collection process in determining proper resolution option for your debt most creditors will run a credit report. The creditor obviously knows of your own debt payment history with them. The credit report will allow them to see how you are treating all of your other creditors. For example if you have ten credit card accounts and are current with all of the others they will make the assumption that you are capable of paying them as well. On the other hand if you were delinquent with all of your other credit card debts it would seem to indicate that you do not have the ability to pay anyone including that particular creditor.

Would a typical credit card debt account accept to pay off the debt?

Most of credit card debt accounts settle in a range of 30 to 50%. Be aware that some credit card debt accounts may settle considerably higher reaching into the 75 to 80% range while in rare cases credit card debt accounts can be settled in the 20 to 30% range. In very rare cases I have seen debt solutions agreed to for as little as 5 to 10% or as much as 90 to 95%.

Debt Reduction Programs

Debt Reduction & Debt Elimination Programs: What are they & How they Work?

The Internet is full of Debt Reduction programs. In fact in developed countries like USA, you will find the advertisement of such kind of programs every where on TV, Radio, News papers & the Internet. They will show you the feedback of several people telling you that this program had helped them a lot to reduce their debt by 90% in just 6 months and many other kind of customer feedbacks.

I receive several queries from US readers every week regarding Information, advise & my opinion regarding debt reduction programs. The Commonest query is, I am in so and so debt, Should I go for Debt Elimination program?

According to Trent of The Simple Dollar Blog,

What these plans offer is guidance for people who feel lost and don’t step up to empower themselves. Many people who are responsive to these ads are obviously in a bad situation, but the real kicker is that they feel very lost in that situation. They don’t know where to turn for help – and here’s a service that’s pledging to solve that very problem. When you’re being overwhelmed by a problem, a safety rope sounds incredible, no matter where it comes from.

These programs help you to manage your debt. They can make a debt management & reduction plan for you. But for that you have to pay them heavy fee. I am not saying that you should not go for such kind of programs. This is because for many people, Debt Elimination program is the final option.

I am just saying that, before going to such kind of programs, you should try all the tricks, tactics & advises given in the Personal Finance Literature (Books, Audios, CDs, Blogs & everything else). This is because such programs offer nothing more except the simple personal finance advises. The thing is that, you should take action and follow these advises.

Most of the people want to get out of debt but they don’t want to take action. They want to sit ideal and want from the debt management companies to take care of their debts. This is not possible.

You have to take Action. Than and only Debt Reduction programs will work for you…!!!

Debt Reduction Services Review

Debt Reduction Services Review: Review of Debt Management Companies

Debt Management Companies are emerged like flowers all around the world. This is because people from all around the world are taking more and more debts for various purposes and at some point or the other, they find themselves in a helpless situation that they don’t know how to manage debt.

And in this situation, if someone gives you a helping hand than it is very difficult to resist. I am talking about the debt reduction services that the debt management services provide. However, there are so many debt reduction services in the market that choosing a best debt reduction service is itself a job.

In such cases, you should go for Debt Management Company rating websites & services. Before going to any debt management company, you should first of all check it’s past history, it’s customer feedback and it’s rating.

You should always prefer to go with reputed Debt Management Company. You must go through the reviews of debt management companies before becoming their customers. It is better if you personally meet someone who has already gone through that company and has a good experience.

Review of any Debt Reduction Service is very important. This is because after all it is the debt management company who will negotiate all the terms and conditions with your lenders. Thus, I strongly recommend you to review all the debt reduction company before going with them.

Reviews of debt management companies may be obtained from the vendor’s websites. Anyone can read these reviews to learn more about the company as well as their method in handling debt related cases. The reviews contain the experiences of clients, the pros and cons of the company, the way they treat people, the extent of their use and a summary of their programs. Some companies will have a page on their website dedicated to comments from clients.

Debt Reduction Services Scam

Debt Reduction Services Scam: Do they really work or Scams?

In the United States, most of the population is under a deep debt up to their eyeballs. And some people have taken so much debt to fuel their life style that the debt is now going through their roof. And as a result of this, Debt Reduction Services firms are emerged like anything.

However, the question is that Do Debt Reduction Services really work or are they Scams? First of all read my detailed article,

Debt Reduction Services

The vast majority of debt reduction services are not scams; although there are some flat out scammers around there are not many.  The problem lies when a company knowingly puts people onto a program they know will not succeed for that person.  A company must also give “full disclosure” meaning they fully explain both the advantages and drawbacks.  Unfortunately many companies do not offer full disclosure and taint the debt reduction industries reputation. 

A common problem many companies run into is when they do not explain to potential clients that they must stop paying there creditors like I mentioned above.  So when they begin to receive collection calls they are pretty surprised.  As far as collections calls are concerned no company can guarantee all of the calls will be stopped.  So if you are speaking with a company that says anything along those lines, be very weary.  Many will be able to slow them down to some degree but no one can simply push a button and stop them all. 

The next major problem when dealing with debt reduction companies is that many will put people onto a debt reduction program knowing they cannot truly manage the program and will fail.  These companies just want to collect your fees and could care less whether you succeed or not.  This process should take no more than three years to complete (in some rare situations can be prolonged to four years) in order to maximize the benefits.  The scandalous companies will basically accept whatever payment you can make even if it is far to low of an amount to get the process done in the correct amount of time.   Like I said all they want is the money and do not care if you compete the program.  So if you are speaking to a company that is trying to get you on a plan that is four to five years or more stay away.  As much as it may hurt to accept in this case you are better qualified for bankruptcy.

Another very good way to determine if a debt reduction service is an honest reputable company is if they are an accredited member of the BBB (Better Business Bureau) with a good track record.  Most companies will have a few complaints, however the good companies will show those complaints have been resolved to the clients liking.  Then if you find a company who just has tons of complaints stay away!

Debt Reduction Services

Debt Reduction Services: Do They Really Work?

Debt is a growing concern all over the world. In fact if you are an American than you may now that how debt is spread all over the United States. The Commonest and worst Debt is the Credit Card Debt. In the past decade, Banks and Financial Institutes have distributed the credit cards like hell.

There is a joke about it. The Joke is, In the Past decade the American banks have marketed credit cards so much aggressively that they have offered the credit cards to even dead people and even children who are not born yet…!!!

And the ultimate result of the excessive debt is – Bankruptcy. In USA, literally hundreds of thousands of Individuals & Couples have filed for Bankruptcy mainly because of the Credit Card debt. And as a result of this, literally thousands of Debt Reduction Services Businesses have been emerged.

What Debt Reduction Services Offer? -

Well, Debt Reduction Services offer wide range of services to reduce your debt such as Debt Consolidation, Debt Help, Debt Reduction program and many others. These people negotiate with your lenders & banks and negotiate the various terms for debt consolidation.

Does Debt Reduction Really Work? -

Well, in my pinion, The Debt Reduction Won’t work for most of the people even though logically and mathematically it works. This is because they haven’t change their behaviour & bad spending habits.

Let me Explain you this by giving you the example of my friend. One of my friend was deep in debt because of his bad spending habits and high status life style. So he went for Debt Reduction Services. So the Debt Help Company decided to go for Debt Consolidation. So the Company has transferred all of his high paying debt to the low interest paying debt backed by his home. Now, his credit cards were recharged again.

The problem was that he had not changed his bad money spending habits. So just after few months, he was in more debt than before. Credit Card Debt & Home Mortgage. Now, Debt Reduction Services can’t do anything.

Thus, Debt Reduction Services work for you only if you are going to change your Personal Finance behaviour and bad money spending habits…!!!!

Debt Consolidation Process

How Does the Debt Consolidation Process Work?

The first thing that happens with debt consolidation is that you meet with a debt expert and discuss your current situation with him/her. They will look at all of your monthly obligations, and then they will discuss what options you have and what they can do to help you take advantage of those options. Together the two of you will develop a program that is especially designed for your situation, and then your debt professional will help put the program into effect.

In most cases the financial product of choice for a debt assistance expert is a debt consolidation loan

Here is the Debt Consolidation Process -

1. Call your credit card companies and close all your credit cards.

2. After you receive a statement that reflects that your cards have been closed (30 – 60 days), call each of your credit card companies and ask to speak to a supervisor or team leader.

3. Once you have someone higher than a customer service representative on the phone, tell them that you are interested in setting up a debt management plan to work out terms to repay your remaining balance. Companies will generally work with you. They know your other option might be bankruptcy which means they won’t get any money from you.

4. Negotiate terms with your credit card company. This should include:

a. Lowering or eliminating your interest rate.

b. Setting a due date every month. It can help facilitate later payments if all your cards are due at once, but be mindful of your spending plan and other expenses when you set the due dates.

c. Stopping all fees – late, annual, over limit etc.

d. A set monthly payment that will pay off your card in 2-8 years, depending on the balance. 4-6 years is a good goal.

e. Re-setting your account after a certain period, typically 3-6 months, during which you make your agreed upon payment on time. Re-setting the account means that the company will no longer report you to the credit bureau as late or over your limit.

f. Written confirmation of the agreement from the company. They may ask you to sign a copy also.

5. Once you have done this, make the agreed upon payments every month.

As your budget allows, pay extra money on the smallest balance. Do this consistently. Once that balance is paid off, add its payment to the card with the next smallest balance. Continue to do this until all your cards are completely paid off. For this system to work its magic, you MUST commit to rolling your payments onto the next card when one is paid off.

Debt Consolidation Services

Debt Consolidation Services

Debt Consolidation means converting your several high interest paying loans into a single low interest paying loan most commonly backed by your home.

There are several services come under this. Here is a List of these services. In India, Debt Consolidation is not commonly practice. But in countries like USA, Debt Consolidation practice is very routine.

- Consumer Credit Counseling Services – Here they will educate and assist you in managing your debts. In India ICIC Bank’s DISHA & Bank of India’s Abhay are the Best Credit Counseling Services.

- Professional Debt Elimination Program - Making the decision to take control of your debt is the first step toward reducing your debt and becoming in charge of your finances. Here they will help you to change your bad financial and money spending behaviour.

- Credit Card Debt Consolidation Services – Here they will assist you in handling your multiple Credit Card debts into converting a single low interest rate paying debt.

- Unsecured Debt Consolidation Services – Here you can get a debt consolidation loan even without putting your home or any other Asset as a Collateral.

- Reduction in your Interest rate to as low as 0% – These kind of services assist you in negotiating with your lenders. Sometimes they bring down the interest rate of your debt consolidation loan to as low as 0%.

- Debt Settlement Program – Here they will assist you in settling your debt.

Thus, there are several kind of Debt consolidation services. You can go for any of these services according to your need.