Clear Credit Card Debt with a Balance Transfer: How Interest Free Credit Helps Consumers Clear Debt Quicker

Recent statistics produced by CreditAction.org show that there was £53 billion of credit card debt in February. The collective credit limit on UK cards is a rather alarming £158 billion; this equates to an average limit of £5,129 per person. Individuals struggling to clear debt can resolve their money problems in a fraction of the time via a series of interest-free credit card balance transfers.

Making the Minimum Monthly Repayment on Credit Card Debt

CreditAction.org believes that the average interest rate on credit card debt was 17.92% in April. Making the minimum monthly payment fails to clear debt quickly enough. For example, a consumer that owes £5,000 pays 2 per cent of his outstanding balance each month. He proceeds to pay £1,200 each year, yet only clears £304 because £896 of interest has accrued.

Clear Credit Card Debt each month

In April, the British Bankers Association (BBA) stated that 73.4 per cent of customers have interest-bearing balances. Credit card debt is one of the most inefficient ways of borrowing money. Consumers should seek to clear debt in full each month either from savings or through a debt consolidation loan.

Interest-Free Credit Card Balance Transfers

Individuals with a good credit rating should consider to get loans in a flash. The non-payment of interest helps clear debt faster. For example, the Virgin credit card offers customers the opportunity to avoid paying interest for up to 16 months, although there is a 2.98% handling fee. After the 16 months is up, it is then possible to perform a balance transfer to another card; repeat the process until the balance is cleared.

  • Making just the minimum monthly payment on £5,000 of credit card debt at 17.92% APR would yield a total of £10,825 of interest for the banks. It would also take a staggering 47.5 years to fully pay off the balance;
  • On the same terms, an interest-free balance transfer allows a consumer to eliminate credit card debt in-full in just 4 years and 2 months- in excess of 42 years sooner!

Always use an online comparison site, such as moneysupermarket.com or uSwitch.com, to trawl the market for the best interest-free credit card deals.

An interest-free balance transfer can help consumers to resolve money problems and clear credit card debt in a fraction of the time. Always take into account that there is often a handling fee for initiating the transfer so check the different rates charged by various providers before signing-up. These deals will not be available for those with adverse credit.

Loan Modification: How to Figure Out Your Debt-to-Income Ratio

Everyone is looking for a way to lessen their monthly bills and loan modifications are an easy efficient way to do this. They are easy to obtain, as long as one qualifies, and they can help save someone’s home, car, and or clothing. Although loan modification can improve people’s lives greatly, it follows strict guidelines so financial procedures must be learned.

When trying to receive a loan modification, it is important to follow a simple equation: GI > TD * 2, where GI equivalent to one’s gross income and TD is the total debt of a person. If this equation is not correct when trying to figure out if one qualifies for a loan modification then it is quite likely that the person will be denied.

Gross income is simply the amount made before taxes. So, if a person makes $25.00 an hour and works 30 hours a week then they make $1,000 gross income. In order to qualify for the loan modification this $1,000 must be twice as great as the total debt. So, if they have a car payment of $150 a month, want a new loan modification of $350 a month, and have average weekly credit card bills of $100 a week then that person would not qualify for the loan modification. But if there was no credit card debt then it is likely that they would qualify for the loan modification. There are also factors that must be taken into account when considering the GI and TD of a loan modification.

The total debt of a person does not include necessities like food, electricity, or heat. The reason for this is because these can be cancelled at any time and, unless late payments are made, no debt is acquired. Also, in loan modifications the GI can also include things that help maintain bills such as alimony or child support. So, as long as the debt is half or less of the total amount received then one can expect to receive the loan modification.

Despite knowing this helpful hint, one must consult a professional when going after a loan modification. They can tell the person about intricate details and see if there are any unique options. For example, many may receive loan modifications if they were once ill and just got back to work.

People usually work 40 hours a week, 160 hours a month, and 1920 hours a year! When one realizes that they have to work nearly 2000 hours a year it is a must to try and save maximum profits. Loan modifications can be a strong contributor to this. So if one is applying for a loan modification they can apply the simple equation of GI > TD * 2. If it checks out then one can proceed and be confident that there time will not be wasted and they will receive the loan modification.

Scouting Foreclosure Loans

The time to start considering a foreclosure loan is the first month you miss your loan payment. Just as you shouldn’t head into the wilderness without first consulting a map, you should also have some idea of what a foreclosure proceeding entails.

Foreclosure is a lengthy process and during the time up until your home is actually auctioned off, you can find cash and negotiate a resolution to forestall foreclosure proceedings. So let’s first see what the foreclosure process is and then we’ll consider foreclosure loan options that may be available to you.

Foreclosure begins, technically, on day 30 of your overdue payment. Foreclosure loans are not usually available at this early stage, but you could consider alternatives to get you out of your relatively small problem at this point. A phone call to your lender can often be all that’s required to set up a way to resolve the situation. They’ll usually be willing to work with you in modifying your loan or amortizing the payments. During the first two or three months, this is usually your best option for resolving the situation. Ignoring the situation is the worst thing you can do.

When a lender cannot get in touch with you or cannot come to a resolution of the problem, then they will begin the legal proceedings of a foreclosure. For you, this means if you want to resolve the situation at this point, it’s become much more expensive to do, because you’ll be responsible for the legal fees your lender is incurring. You can still contact the lender to stall proceedings and find out what, exactly, is needed to bring the account current.

Now that you know what you need to stop foreclosure, you can look into ways of raising the money needed to resolve the situation. This is when looking for foreclosure loans becomes a serious option. Most lenders will loan only 65-75% of the home’s fair market value, so you’ll need to have enough equity to cover the other 25-35% plus the legal and other fees involved. Make certain that the lender you’re working with is reputable and read the paperwork carefully.

Foreclosure loans are a viable way to get out from under a huge financial mess without losing your home, but paying your mortgage on time is the best way to keep it from happening in the first place.