Solving Family Debt
Key Things To Remember When It Comes To Solving Family Debt
♠ Be sure to evaluate if the problem they face is temporary or if it’s pervasive.
♠ determine if they have a plan to avoid falling into the same pitfalls once you have helped them.
♠ Ensure that you establish an agreement with details the of help you will provide whether it may be a gift or a loan, and the terms of repaying back.
♠ Consider providing them with cash, taking care of one or two of their bills or provide non-finance help such as food.
♠ If you are in a position to provide a source of income, consider the possibility of helping them in that regard.
♠ Determine if it would be best to make a personal loan or to be a cosigner for a loan that they themselves are seeking from a financial institution.
Provide Them With Cash
Some of the details you should include in the paper document are:
♠ A repayment plan or pay back installments depending on certain conditions like time frames or once they secure a job.
♠ Date when the final payment will be due.
♠ Recourse terms if the individual does not abide to your agreement. You can stipulate by increasing interest rates, cessation of further loan payments or legal action.
One of the most important things you’ll want to remember about making personal loans is that if you plan to lend a large amount such as $10,000, you will want to ensure that the interest rate is not drastically different than the state’s interest rate for borrowers in general. As such, you should consult with a tax professional to advise you about state regulations regarding interest rates.
Debt Consolidation Plan
When it comes to consolidating debt, numerous outstanding balances are combined to establish a new loan, which typically comes with a much lower interest rate, better terms and a single monthly payment plan as opposed to making multiple payments throughout the month. Experts suggest that you should consider the possibility of establishing a debt consolidation loan if your partner has large outstanding credit card balances, other liabilities and/or student loan related debt.
However, it’s important to note that Debt Consolidation will not eliminate debt in itself but rather establish a new loan with more flexible rates and terms. In some instances it can even help to give you more time to pay off said debt which will lead to you paying more in interest fees. But, experts highlight the fact that it’s an ideal thing to consider if your loved one has multiple outstanding balances.
Credit Card Transfers
When it comes to credit card consolidation a balance credit card may be right for your situation. Balance transfer credit card enables you to move your partner’s account balance unto a balance transfer credit card. Meaning, if your spouse has multiple outstanding balances that need to be paid off, it can be transferred to a single card which allows you to manage monthly expenses more efficiently as well as to consolidate multiple debts. What makes this such a great solution is that if you have good credit you can transfer high interest debt onto a balance transfer card which provides a 0% introductory rate.
As such, if you are able to pay off your loved ones debt within the timeframe of the introductory period, you can save money by paying no interest. But, as mentioned above you will need to have a good credit score of 660 or higher. In addition to that, it’s also worth noting that your credit score may be negatively affected when you apply and you may have to pay 3-5% of the transferred balance.
♠ Consumer Credit Card Relief ♠
Consumer Credit Card Relief is a full service debt relief agency that can help you maintain your finances, assist you in the credit card debt settlement process and help you to move towards a path of financial freedom. Consumer Credit Card Relief has served the community for several years and has established an unparalleled record when it comes to helping their customers get out of debt and providing credit card counseling services. This is due to their unique, personal approach that they use to tackle debt which digs deeper than just putting every client in a credit card relief program. The process starts by analyzing receipts and bank statements as to which they use to compare your income with your expenses. If they find that your expense exceeds your income, they establish a budget to go by which allows you to gradually pay off your debt.