How To Approach Credit Card And Debt Consolidation

Credit card and debt consolidation is a two-edged sword. Sometimes you have a lot to benefit from it, and other times you have a lot to lose. How do you approach the issue? The most obvious step is putting away your credit cards. Do your best to pay for all purchases in cash. Cash is still king, sometimes, and especially when it comes to people who are deep in debt. It is a good idea to transfer all credit card balances to a card with low interest. One option is to apply for a zero percent interest credit card, moving your balances to it. This can be done periodically. This can be an issue, but you benefit by saving a lot of money and time to pay back your debts. The next thing you should do is make your payments as high as possible. If you are making the minimum payment alone, you are really only paying off interest, not the actual bulk of the debt. At the same time, interest is usually more than the principal amount, but this depends on the way your payment scheme has been developed. Going for a zero rate card may be a good idea, but remember that most of these rates are only initial ones.

After the initial interest-free period is over, your interest rate goes up. At this time, the most logical thing to do is cancel the card and go for another one with a zero rate introductory period. At the same time, if you keep dropping the cards like hot potatoes after these periods expire, people may start getting suspicious of you and turning you down.

It is important to avoid using credit cards with high interest. Just transfer the balance and throw them out. Do not be tempted to keep them just in case of a cash emergency. Just toss them, period.

You can also apply for home equity line of credit for the purpose of debt consolidation. If you find it difficult too manage on your own, look into debt consolidation companies, which can offer valuable advice.

With a HELOC or home equity credit line, you will be able to obtain a low interest loan, paying off credit card balances. On one hand, you are adding another bill to the relentless load. The good news is that you will save a lot in interest, as you will no longer make multiple payments, making it possible to pay back the credit line and eliminate your debt.

It is important to note that credit card debt can help improve or hurt your credit report and score. It is good to have available credit, showing to reporting agencies that you are a responsible borrower. Credit card debt can be approached in two ways - you can either maintain some credit available or pay your debts in full. With regard to debt consolidation, zero percent credit cards and HELOCs are two possibilities. You can also shop around for a low interest personal loan, using the money to eliminate your credit card debt. You will not find it difficult to get approved if you have a good credit score.

Need to find consolidation loans that match your needs? Check out the Financing Directory for more information.

What Are The Most Popular Mortgage Types

Different mortgage types are featured on the financial market in Canada. Home buyers can choose between an interest only mortgage, a repayment mortgage, or an endowment mortgage. Your mortgage broker will recommend one of these types depending on your preferences and requirements. For instance, if you prefer to pay back a little at a time, your mortgage broker will advise on choosing a repayment mortgage. If you want to pay the whole amount at the mortgage's term, an interest only or endowment mortgage may be a better option.

With repayment mortgages, bank clients are paying the principal, together with the interest on the underlying debt. At the end of the mortgage's term, the debt is cleared. This type of mortgage is regarded as the least risky and easy to understand in terms of repayment. The continuous repayment mortgage is one variation of the standard repayment mortgage, with continuous annuity being used when repaying the outstanding amount.

With interest only mortgages, the mortgage holder pays off only the interest over the term of the mortgage. The capital is due at the end of the term. This type of mortgage has become increasingly popular among first-time buyers and buy-to-let investors. The interest only mortgage costs less than the repayment mortgage. While interest only mortgages are popular in the US and UK, they are not common in Canada. With regular amortizing mortgages, holders are entitled to one or a couple of interest only payments. Because of these, Canadian mortgage holders do not really benefit from this type of mortgage. There is one obvious downside to interest only mortgages - people enjoy the fact that they will be paying back the interest only for some time and do not give enough thought to how they will be repaying the principal amount.

As an alternative option, your broker may advise you on choosing an endowment policy. With this type of mortgage, holders get life insurance and save money. The savings can go toward paying back the mortgage at its term, which can be in the range 20 - 25 years. The term endowment mortgage is mostly used in the United Kingdom. It should not be considered a legal term.

Poor credit mortgage is, intended for applicants with poor credit rating. Creditors have started advertising this mortgage type to sub-prime borrowers over the last years. These mortgages are usually offered at a higher rate to borrowers who had fallen into arrears on their mortgages and those who declared bankruptcy. Bad credit mortgages are a good option for applicants who have had debt problems in the past.

Those who want to calculate their mortgage payments can use a mortgage calculator, and different types are available online. You have to simply type the mortgage amount required, the interest rate, and the repayment period in years. With some mortgage calculators, you can also include your credit profile (e.g. excellent, good, fair, or poor), as well as the loan purpose - new purchase or refinancing. Get the facts about fixed rate mortgage by checking out this calculator for mortgages.