Debt Consolidation Loans For Bad Credit Management: How Effective Are They Really?

Monday, April 21, 2014
The biggest problem with missing a single loan repayment is that over just a short time, with fines and charges, the sum can become extremely high. For those facing large debt repayments each month, this is a major problem. But the availability of debt consolidation loans for bad credit borrowers means there is a way out.

But just how effective is consolidating existing debts and taking out another loan to repay them? Is it not simply a case of replacing a set of crippling debts with one single crippling debt? Or is there sound reasoning behind the strategy? After all, there are other options to consider too.

We take a look at some of the factors that answer these questions, and establish that taking out a debt consolidation loan really does provide a practical solution to the problem of meeting debt repayments that are just too large to manage.

Understanding The Mechanics Of Consolidation

Before addressing the questions, however, we should look at how consolidation works. By definition, consolidation means bringing resources together in order to strengthen a position. In financial terms, that translates to combining all the different loan balances in order to manage them better. This is exactly the purpose behind applying for a debt consolidation loan for bad credit management.

The reason why this is done? Well, it comes down to fact that clearing separate debts in full with a single debt creates a much more manageable financial situation. This is because individual loans have differing terms, like interest rates, repayment schedules etc. If there are 5 loans, then there are 5 dates on which to make a repayment, and 5 interest rates charged, complicating the whole situation.

By consolidating existing debts this complexity is reduced to a single repayment that is easier to focus on. And with a single debt consolidation loan to face, there is a single interest rate that ultimately means less interest is paid and a single repayment structure to worry about.

Why Replacing Debts Works?

But how can replacing the debt work? How can the financial pressure be alleviated? The fact is that, when securing a debt consolidation loan for bad credit management, the debt is being restructured. This in turn means the pressure is alleviated, but only if the terms are right.

For example, the most important factor to consider when consolidating existing debts is the term of the loan deal. The key reason for financial pressure is the size of the repayments each month. If the size is reduced, then the pressure is lessened.

When taking out a debt consolidation loan, the length of the loan term decides the size of the repayments. If the total sum is $45,000, then a 10-year term means monthly repayments of around $400. Over 20 years, it would be a mere $200. In contrast, the existing structure could have combined monthly repayments on 5 individual loans as high as $1,000, placing extreme pressure on the borrower.

Other Advantages To Consider

So, what are the other advantages that should be considered, especially when compared to the alternatives? Well, the first alternative is to declare bankruptcy, thus removing the pressure created by debt completely. But there is the consequence of a black mark against your credit for as long as 2 years.

Getting a debt consolidation loan for bad credit management means all debts are repaid in full, leaving no reason for any negative consequence. In fact, the credit score improves instead and worsens because as far as your credit report is concerned, the debts were repaid.

This means the terms on future loan deals can be better, ensuring consolidating existing debts is the most beneficial method to clearing debts - as long as the terms of the debt consolidation loan are right.

Debt Settlement Programs Or Bankruptcy: How To Choose Wisely

Saturday, April 19, 2014
When managing debts becomes too much, a choice needs to be made. Should a file for bankruptcy be made, or should one of the debt settlement programs be applied for? This is a choice that needs to be thought over deeply before any move is made.

The reason this decision is not that simple is that there are serious repercussions to choosing bankruptcy, and even if that is the only logical option, there are a number of bankruptcy chapters under which debtors can file. Increasingly, a Chapter 13 bankruptcy plan is becoming the preferred option, but other chapters are 7, 11, 12, and are just as efficient in ridding oneself of debt.

However, while debt settlement is more expensive and less damaging to credit histories, they do not always turn out to be the saving grace that applicants would like them to be. So, when clearing existing debts, which of the two is the right one to choose?

Check Your Own Status

The first step in ascertaining the best choice is not to look at the options, but to look at yourself. Depending on your credit and financial status, either bankruptcy or a debt settlement program will provide the most effective solution. And reading your credit report is the starting point.

Once the true extent of your debt problem is confirmed, it is possible to work out what the right debt relief option is, based on what kind of deal is affordable. When debts are slightly greater than income, then a Chapter 13 bankruptcy plan is likely to be the right choice. When it is very much greater, Chapter 7 might be the most plausible choice.

However, if there is still some income more than debts, then a settlement deal is likely to be affordable. The complication is that, while a settlement involves clearing existing debts for a fraction of their worth, it still requires a lump sum payment to complete the deal. Saving up that lump sum is the problem.

Terms of Bankruptcy Chapters

There are four chapters to the Code of Bankruptcy that any bankruptcy case can be filed under: chapters 7, 11, 12, and 13, The key differences between them relate to the extent of the poor financial situation an applicant has, and the likelihood that a debt settlement program cannot be approved.

Chapter 7 is filed by those seeing liquidation or straight bankruptcy where debts are completely written off. The other options relate to reorganizing debt, with Chapter 11 filed by businesses seeking to reorganize their debt, but not to liquidate. Chapter 12 is applicable to family farmers seeking to reorganize.

However, a Chapter 13 bankruptcy plan is sought by individuals who earn the average income or higher in the state the case is filed in. The court decides on the terms of the debt reorganization, and continuously monitors the repayment progress. So, clearing existing debts is done under strict conditions.

Bankruptcy or Settlement?

The basic deciding factor is cost, with the fees associated with a debt settlement program almost double that of the costs of filing for bankruptcy. But there is also the matter of monthly repayments and other terms associated with the type of bankruptcy. If the Chapter 13 bankruptcy plan is more affordable than the settlement plan, it makes sense to choose the former.

But the consequences of the decision need to be considered too. For example, clearing existing debts through a settlement plan will reduce a credit score by around 50 points, but bankruptcy cuts it by a minimum of 200 points. And it will be on your record for 10 years, while with a settlement plan, credit is returned after 2 years.

Insurance Professional Tips - Sales Letter Writing Like an Insurance Pro

Wednesday, April 16, 2014

An insurance professional talks, acts, writes, and make sales like a pro. To elevate your level to insurance pro, these tips guide you to increase sales letter writing response by 30%. You will be shown, besides letter writing, how to motivate your prospects to transform them into buyers. Learn the insurance professional walk and talk.

Increasing replies for an insurance pro is more than a feather in their hat. When an insurance sales letter writing brings a great response the reward is a higher income. The entire progression of insurance direct marketing is to procure leads starting from receptive prospect replies. I am not chatting to you regarding cheap leads from prospects that counter a response to just about letter that converts to a flying paper airplane. It is pounding action verbs into your insurance sales letter writing that nails down favorable replies.

Writing a letter for your sales piece can be a grueling process. Rewrite it again by swapping words and phrases, so it sounds smoother. Presume a response rate of one half of a percent to one percent is normally respectable. Increasing this amount by 30% gives insurance brokers agents a great return on the money they are spending (investing on themselves). Also I am taking for granted that you, like an insurance professional, uses refined and carefully selected mailing list. This maximizes the ratio of prospects you can close. On a 5,000 piece insurance sales letter mailer, you should attain possession of 25 to 50 lead opportunities to close sales.

BOOST YOUR RESPONSE 30% TIPS

If rewriting your letter one final time could boost your response rate 30%, would you elect to execute a final letter draft.? The answer is "yes", then "but how"? I assure you, undertaking properly placed action verbs will sprout higher yielding results. You are cleverly combining emotional motivation while aiming the leads trigger directly at your prospect. Acquiring inspiring action verbs is rather simple. In fact, provided free at the end of this article are 100 action verbs. These are key verbs triggering your clients inner emotions and implementing responses to your letter.

An insurance pro can transform 50% to 90% of the lead responses into sales. In this instance, at least 14 additional money making leads could easily result in seven more profitable business dealings. The added replies alone compensate lead acquisition expenditures. Plus extra sales reap long term benefits. Inserting action verbs to your sales piece bears record breaking results. This in turn, escalates new sales volume to the top level.

All this, just by self-injecting action verbs, when rewriting your dynamic insurance sales letter. Your exceptional lead productive writing is led by adding action verbs. It's that simple.

Here is a list of the first action verbs.

Focus, forecast, stun, harvest, advance, surprise, grab, hustle, identify, gesture, evaluate, icy, appoint, approve, arouse, inherit, assume, attacking, automate, master, backtrack, bait, bang, blending, brag, kick, capitalize, capture, celebrate, certify, mobilize, reinvent, honor, cheer, interject, cinch, thrill, clench, cling, incite, coax, intervene, combine, impress, compare, flash, halt, jolt, help, illuminate, and shining.

The remainder of the action verbs list sample follows.

Launch, gallop, congratulate, jam, conserve, ignite, link, consult, investigate, contribute, leap, increase, convey, invade, howl, counseled, crunch, illustrate, decrease, deliver, delve, manipulate, design, mandate, detail, imagine, develop, magnify, diffuse, liberate, license, discover, leverage, display, dissected, gamble, diversify, manhandle, holler, dream, isolate. economize, echo, elaborate, knockout, humble, encourage, energize, hiss, enhance, and maximize.

Accomplishing the Mission

Now starts the challenge of professional champions. Take the initiative on elevating skyhigh the interest in your insurance sales letter. You must add startling eye-to eye headlines that will start your prospect's mind spinning. Ordinary and dull reading will instantly get your sales message pitched in the dirty disgusting trash. Everything should get a complete makeover. Your whole sales letter must come alive to force your reader into a trance to read on. This task involves enthralling sub-headlines, dreamful benefits, and a captivating call to action Then a final irresistible P.S. message to lock in replies for your sales letter writing.