Debt Consolidation

November 17, 2008 by  
Filed under Featured, hawaii

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Debt Consolidation is a tactic through which an Individual aims to get a new single loan to clear off his multiple debts for a lower interest rate and longer repayment period. Individuals are forced to take a Debt consolidation loan when they are not in a position to clear off their debts or to reduce the interest rate they pay for their existing debts.

Most often Debt consolidation loans are provided under a collateral security (home etc.) and hence can be termed as secured loan. But remember some Debt consolidators do offer loans on unsecured basis. Lenders often charge a lower interest rate for Secured Loans while compared to Unsecured Loans. One such example is to avail Debt consolidation loan to clear off your credit card dues.

Before signing the contract with a Debt Consolidator, make sure you read the terms and conditions carefully and find out the exact charges or fees. The Interest rate for a debt consolidation loan would be invariable unlike your credit card’s Interest rate. Moreover you get a clear idea as how much to pay and how long to pay.

What leads to Debt Consolidation?

There are few people who develop the habit of acquiring loans one after other. It is too late until they realize that they are unable to pay the loan amount or the interest amount keeps mounting up. A proper financial plan would help one to avoid such unwelcome circumstances.

Credit card dues are the leading factor that drives one to a Debt consolidation program. It is a well known fact that credit card companies charge a higher rate of interest and may impose various charges if you default your payment, spend over your credit limit and late payments. If you are one among those who pay the minimum amount due on their credit card payments, you should realize the pain. It is always better to clear off your credit card dues rather than other debts. Try to make payments that are more than the Minimum Amount due.

Advantages of Debt Consolidation

As said earlier debt consolidation offers the benefit of lower interest rate while compared to interest rate charged by the Credit Card companies. You also get the advantage of repaying the loan in a longer period of time. The rate of interest is fixed and you know how much amount you are supposed to pay.

Disadvantages of Debt Consolidation

As most of the Debt Consolidators offer secured loans (your home as a security) you may end up loosing your home if you are unable to payback. If the interest rate of your debt consolidation loan is higher than the average of your other debts then it is of no use. There are few debt consolidators who may push you in availing a loan and charge more than actually you would pay to clear off you debts. If the tenure of repayment is longer chances are there that you may end up paying more than your normal debts. Instead of availing a Debt consolidation loan you could negotiate with your existing creditors who may be ready to accept the deal.

Financial Planning

November 17, 2008 by  
Filed under Featured, Investments

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Financial Planning refers to the process of assessing your current financial conditions and plan to efficiently save money to meet your future expenses or your financial goals. A proper financial planning is very essential for any Individual or Business to reach his/its personal/ business (financial) goals. It would help you to properly manage your money and save wisely for future.


Financial Planning for Individuals

A proper financial planning helps an Individual to learn about his future expenses and save money to meet those financial obligations. The planning may differ from one person to another based on his financial goals and risk level. For instance a person who falls under the low-risk level can invest in fixed rate deposits in Bank/ Post Office etc. On the other hand a person with high risk capacity can resort to mutual funds/ equity funds where the return is not fixed.


Financial Planning for Businesses

Financial Planning plays a vital role in running a successful Business. It helps a business to identify its assets/ cash in hand, liabilities, future expenses etc. and how to properly allocate funds to meet those expenses. Without a proper financial plan a Businessman will find it difficult to meet the expenditures and may end up in losses.


Seeking the service of a Financial Planner


A Financial Planner is a qualified person who identifies individuals’ future expenses and advises a strategy that would help them to meet their financial goals. Some of the common financial goals may be as follows:


a) Saving for your marriage expenses

b) Retirement Planning

c) Buying your Dream Home

d) Investing for your Child’s Education

e) Reducing your Tax Burden thru appropriate Investments

f) Insurance Planning


A Financial Planner may charge a fixed fee (consultation fee) or provide free consultation and receive commissions based on your Investments. Before consulting any financial planner find out about their experience level (years of service) or credentials (happy clients). The best option would be to approach a well known financial planning agency in your locality or also the one recommended by your friends. A new consultant may not be able to match the services of a veteran. Disclose your financial obligations clearly which would help the financial planner to offer a proper advice. Ask questions whenever required to clear off your doubts.


A Financial Planner who charges a fixed fee will be in a better position to suggest various Investment Ideas while compared to the one who receives commission based on your Investments as he might try to convince you in selling their financial products.