10 Steps to Debt-free Life

by admin on December 29, 2014

keysIf you have landed in the dreaded pit then remember that you can dig your way out of it gradually, just like it took time for you to get surrounded by debt. Don’t panic and take a deep breath after which you can work on the following suggestions.
1.    Firstly, admit that you have a debt problem and you need to counter it by devoting some time to the resolution of this issue each day.
2.    Make a list; first put all your debts- medical bills, electronic items, car loans etc. The amount in debt for these items goes in second column. The third column will have your smallest monthly debt payment and fourth will have percentage interest. You will now have a bird’s eye view of your monthly debt payment.
3.    You can start with little cut-backs in budget by purchasing ordinary items of the grocery shelf, taking home lunch instead of ordering, using sweaters to cut heater bill.
4.    The money you save from following above steps can be set up in an emergency fund with a target of at least $1,000 which you can keep adding to.
5.    Larger cut backs can be an absolute essential if a large debt payment is haunting you. Think of ideas like selling your new auto to buy a small or used one and even go for a smaller apartment to fight your debt with lower rent.
6.    Do not use credit cards at least for a month and stop yourself from buying needless things. Make a priority payment for utility items, mortgage and education expenditures. The semi-luxury items, gadgets, and mobile devices can be halted in this period as they increase expenditure cause of recharging, balance fill or monthly purchase.
7.    Bring out on paper all your sources of income per month and assign the money first to the emergency fund then debt payments and then bills. In the end, you can deal with your variable expenses by putting cash in separately tagged and designated envelopes.
8.    You should resist the habit of procrastinating bill payment. Go for online payment or set reminder in calendar or mobile for the due date.
9.    As soon as you get $100 in your emergency fund, start making small payments. Discretionary spending needs to be watched till all small debts are paid off. At the end of several months you will have a good sum to deposit in your emergency finance for large debts.
10.    Feel free to brain storm with your spouse and come up with creative ideas for dealing with the problem by doing overtime or asking your spouse to help you through her cooking, writing, painting talent that can sell in small ways.
11. See more tips here: https://www.lifeoncredit.ca/bad-credit-personal-loans-in-canada/


{ Comments on this entry are closed }

Typically when a borrower defaults on loan repayments, lenders wish to forgo a certain percentage of the loan rather than forfeiting all the cash owed in case the borrower becomes insolvent. Debt settlement refers to the procedure of conciliation between the debtor and creditor to diminish the sum of debt owed.  Debt settlement is thought to be an answer to installments that have been due for a long time and a substitute to insolvency.

iStock_000008642715XSmallUsually, the debt settlement procedure comprises of discussions between the organizations that specialize in debt settlement on part of the borrower and the lender to lessen the total loan to a smaller quantity. Mostly, the lender and borrower decide on a certain percentage of the overall unpaid loan to be forfeited by the lender. But, debt settlement cannot be carried out for all kinds of loans. Uncollateralized loans that are not pledged by real assets like vehicle or a house may not be forfeited.

Although debt settlement appears to be the best lawful answer available to past due installments, it is not free from drawbacks. Once a loan is forfeited, the borrower may not be able to obtain unsecured loan like credit card loan or medical treatment installments for a long time. Moreover, even if the debt settlement negotiations are successful, credit reports usually show some evidence of debt settlement hence lowering credit rating of the debtor. Nevertheless, if the creditor agrees during the negotiations to provide a ‘paid in full’, settlement may have no significant effect on the credit rating. Mostly, debt settlement is carried out by institutions that specialize in debt settlement or legal advisors who help lenders in negotiating debt settlement. However, in return for their services, these debt settlement companies usually charge big service fees in the form of a percentage of the total debt owed, or a percentage of the debt amount forgiven along with initial sign-up fee and monthly service charges.

As the debt settlement institutions demand cash to be paid periodically and place it in an account till the time the lender can be paid, therefore, debt settlement may carry on for a long time. Meanwhile, the interest and late fee may keep on accruing and the bills may keep on increasing. Moreover, the creditors may also sue the debtor in an attempt to recover debt and interest or may send the case to the collections agency sooner than required.

Due to the high service fee of debt settlement companies and the extended settlement period, the withdrawal charge of debt settlement companies is fairly high. After a few years of making payments to the settlement companies, clients may still be in the same position as before since most of the amount saved goes to the settlement companies as service fee.


Life on Credit

About Service Fees

{ Comments on this entry are closed }

Credit Cards by CIBC with Great Rewards and Premium Privileges

November 22, 2014

Clients of CIBC choose from mortgage and unsecured loans, credit cards for different credit profiles, and other products. There are plenty of everyday cards such as CIBC Select Visa, Classic Visa, and Platinum Visa that feature no or low annual fees, authorized spending limits, and other added benefits. The bank offers platinum and standard cards […]

Read the full article →

Student Cards Criteria and Requirements

November 13, 2014

Many issuers offer cards to students who are enrolled full-time and are new to credit. Consumers use student cards to pay for meals, tickets, books, and textbooks. The main benefit to holding a student card is better purchasing power. Some issuers offer cards with different fees, however, including transaction and processing fees. Some students opt […]

Read the full article →

Beneficial Features of Personal Credit Cards

November 6, 2014

Scotiabank offers convenient banking and borrowing tools such as currency and account services, credit cards, and lines of credit. Cards come in different versions, including student, low interest, cashback, and others. Scotiabank features cards by American Express and Visa and offers perks such as travel benefits, special promotions, extended interest-free periods, and many others. Clients […]

Read the full article →

Air Miles Criteria and Approval

November 1, 2014

Issuers such as MBNA, RBC, and other large banks offer air miles and travel credit cards. Travel cards are available to existing and new individual customers and businesses. Customers enjoy premium benefits such as low introductory APR, merchandise and travel rewards, no annual fee, bonus points toward charitable donations, and large spending limits. Specialty cards […]

Read the full article →

Solutions for Individual Borrowers

October 18, 2014

TD Bank offers the full suite of borrowing tools, investments, and banking products for institutional clients, small and large businesses, and individual customers. Individual and business clients are offered lines of credit, commercial mortgages, and small business financing. Toronto-Dominion offers consumer cards with airmiles and rewards, cash rebates, and free additional cards. Customers redeem their […]

Read the full article →

BMO Cards with Loyalty Programs and Tailored Benefits

October 11, 2014

BMO offers a wealth of financial products to existing and new customers, including travel and financial planning services, investment vehicles, loans, LOCs, and credit cards. Credit cards are of several types, standard, affinity, and rewards cards with points toward charitable donations, theatre and events tickets, products, and more. Loyalty Programs The Bank of Montreal features […]

Read the full article →

Options for Individual Customers

October 8, 2014

Financial institutions in Canada accept applications by residents and citizens of the age of majority. Banks are unlikely to approve your application if you have late payments. The interest rate offered depends on your credit rating. Some banks require a minimum annual income of $20,000 while others require a total income, including spousal and own […]

Read the full article →

Types of Debt Instruments

September 20, 2014

People who have gone through some major event such as loss of job, prolonged illness, or divorce usually apply for a secured credit card. To this, borrowers are advised to make sure the card issuer reports to all credit reporting agencies. If they do not report, the borrower has lost a key benefit. As a […]

Read the full article →