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Online Debt ConsolidationOnline debt consolidation comes in many forms, so it is important that each consumer reflects on what their needs and concerns and financial situation is before signing up for an online debt consolidation program. The four primary concerns for most consumers are: i) monthly payment, ii) time to debt freedom, iii) total cost, and iv) the credit rating impact of the consolidation program. Be sure to evaluate each program, relative to your prioritization of these factors. Since there are a variety of online debt consolidation options, including credit counseling, debt negotiation/debt settlement, a debt consolidation loan, and other debt resolution options, it is important to fully understand each option and then pick the solution that is right for you. Credit Counseling Credit counseling, or signing up for a debt management plan, is
a very common form of online debt consolidation. There are many
companies offering online credit counseling, which is essentially a
way to make one payment directly to the credit counseling agency,
which then distributes that payment to your creditors. Most times,
a credit counseling agency will be able to lower your monthly
payments by getting interest rate concessions from your lenders or
creditors. It is important to understand that in a credit
counseling program, you are still repaying 100% of your debts
â€" but with lower monthly payments. On average, most online
credit counseling programs take around five years. While most
credit counseling programs do not impact your FICO score, being
enrolled in a credit counseling debt management plan DOES show up
on your credit report... and, unfortunately, many lenders look at
enrollment in credit counseling akin to filing for Chapter 13
Bankruptcy â€" or using a third part! Debt Settlement Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money. Debt Consolidation Loan Many people think first of a debt consolidation loan when seeking online debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In a debt consolidation loan, you exchange one loan for another. The most frequent form is taking out a mortgage loan, which carries a lower interest rate and is tax deductible, to pay off high interest rate credit card debt. It is important to be aware that shifting unsecured debt to secured debt can create a volatile situation, if there is ever a chance that you cannot afford the new mortgage payment you are now putting yourself at risk of foreclosure! In the case of a debt consolidation loan, most mortgages are 30 year loan, which means that the total cost and the time to debt freedom could be very high... but the monthly payment will be lower than other options and there is no credit rating impact. Net-net: while there are many forms of online debt consolidation, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the online debt consolidation option that fits for you. Other articles by this author »
About Brad Stroh
Brad Stroh is currently co-CEO of Freedom Financial Network and http://Bills.com. If you would like more of Brad's articles, please visit the http://Bills.com information on Credit. Related
And here is another random article you might be interested in... Five Things More Important to Buyers than WHAT You're Selling - IArticle I of a two-part series. For Article II http://www.giantpotatoes.com/article202.htm No matter what customers say they want, what they're really looking for is "something special." They can't quite describe it, but when they find it, they know. Indeed, those little details of the buying experience may appear intangible. But what you sell is usually less important to customers, almost incidental--unless they don't get what they expected. As Walt Disney said, "Do what you do so well that people want to bring their friends to see you do it again." Any business able to satisfy customers in these five ways will consistently beat the competition. NOTICE: More important than WHAT you provide, is HOW you provide it. So much attention is paid to the WHAT, the HOW often takes a backseat. Yet it's the quality of your HOW that determines whether the sale is made or lost. Buyers focused only on price are likely to be one-time visitors, but even they sometimes decide the cheapest price "just isn't worth it." 1. How well they're treated People (even business buyers) care about the human touch. They want to be treated with respect and fairness. They want to feel like valued customers--whose time and opinions matter. If people can't trust you to treat them right, they certainly won't trust you with their money. Whether or not the sale occurs depends on whether the customer feels taken for granted--or taken. Equally important is how the business deals with problems or complaints as they arise. Making mistakes needn't be fatal, customers understand that. However, the willingness to fix them and minimize their impact on the buyer is crucial. Solving it immediately, with the right attitude, can even strengthen the bond. But fumbling the ball a second time simply isn't forgiven. 2. How efficiently the buying process went From start to end, did each step of the sale go smoothly? Could the buyers get the answers or help they needed? Could they find what they came for (or why not)? Was the operation arranged to accommodate them? their time frame? Were prices and payment options clear and easy to deal with? Can most buyers complete the transaction without triggering number 3? 3. How much aggravation they had to endure Aggravations are of two types--those that shouldn't have happened (glitches). Or those that happen to everyone, like long waits, multiple visits, shortage of parts, etc. A buyer is willing to endure a little inconvenience, but not for long, not every time. Your job is to minimize inconveniences so they don't arise--not treat them like business as usual. Here's where the helpful, informed employees will make or break the business. First in building customer rapport, anticipating their concerns, and avoiding problems in the first place. 4. How many mind games are played on them Sorry to say, the word "sales" gets misused too often. Selling isn't an opportunity to manipulate the potential buyer to do what the seller wants, rather than providing the buyer what they want. No one wants to feel like a sucker or to be mislead about prices, delivery dates, or terms of the sale. Even a hint of such treatment kills trust, kills their willingness to hear you out. And if a person feels tricked into buying, they won't buy again. Or they might cancel the sale afterward from buyer's remorse. 5. How well the business has its act together Starting with the first impression, did everything about the business live up to its promise or reputation? If every part of the operation works smoothly as an integrated whole, consider the customer well served. When the parts are mismatched or full of snags, it screams "small potatoes." That scares business away. Even if the issues are minor, they pull the plug on trust. Fortunately, a focus on your HOW yields big benefits from quick and inexpensive solutions. For tangible ways to wipe out small potatoes signals, visit my website where I discuss this. http://www.giantpotatoes.com Get your HOWs in order, and you'll drive the competition crazy Customers notice when they're treated well. Let your uniqueness shine in the HOW of customer-pleasing practices. It pays off in your bottom line. (c)2004, Lynella Grant Other articles by this author »
About Dr. Lynella Grant
Dr. Lynella Grant decodes and repairs unintended messages in the
"body language" of a business. Appear to be a seasoned pro. Author
"The Business Card Book" and "Stop Looking Like Small Potatoes" Off
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