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Debt a Glossary of Terms
Bankruptcy - Having been legally declared financially insolvent. There are two types of bankruptcy - liquidation, in which your debts are cleared (discharged) and reorganization, in which you provide the court with a plan for how you intend to repay your debts.
Collateral - Property acceptable as security for a loan or other obligation.
Collection Agency - A company hired by a creditor to collect a debt that it is owed.
Contract - An agreement between two or more parties, usually written down and enforceable by law .
Cosigner - To endorse (anothers signature), as a loan agreement, lease or credit application. If the primary debtor does not pay, the cosigner is fully responsible for the loan or debt.
Credit Bureau - An organization to which business firms apply for credit information on prospective customers.
Credit Report -An account of your credit history, prepared by a credit bureau. A credit report will contain credit history, such as what you owe to whom and whether you make the payments on time, as well as personal history, such as your former addresses, employment record and any lawsuits in which you have been involved.
Creditor - A person or entity (such as a bank) to whom a debt is owed.
Debtor - A person or entity (such as a bank) who owes money.
Debt to Income Ratio - Most mortgage lenders use this ratio to analyze your financial well-being. It is figured by using your monthly debt divided by your monthly income. The lower the percentage the better your financial picture. This is often referred to as credit worthiness.
Default - To fail to pay money when it is due. A default on a mortgage or loan takes place when you fail to make the loan payments on time, fail to maintain adequate insurance or violate some other provision of your agreement with the mortgage / loan company.
Discharge (of debts) - A courts writing of off the debts of a person or business that has filed for bankruptcy.
Dischargeable Debts - Debts that can be erased by going through bankruptcy.
Down Payment - A cash payment made by a buyer when they purchase a property.
Equity - An increase in the value of your home or decrease in the loan amount on your home creates equity. Equity is the difference between what is owed on your home and the sale value. Most home equity lenders will allow you to borrow up to 80% of that value.
Fair Isaac and Company - Fair Isaac is the company responsible for creating the popular FICO score. This three digit score is created using information from your credit report and ranges from 300-850.
Foreclosure - The forced sale of property to pay off a loan on which the owner of the property has defaulted.
Garnishment - A court order directing a third party who holds money or property belonging to a defendant to withhold it and appear in court to answer inquiries.
Grace Period - A period of time during which you are not required to make payments on a debt.
Guarantor - A person who makes a legally binding promise to either pay another persons debt or perform another persons duty if that person defaults or fails to perform.
Interest - A commission you pay a bank or other creditor for lending you money or extending you credit. Usually calculated as a percentage of the mortgage or loan.
Lien - The right to take and hold or sell the property of a debtor as security or payment for a debt or duty.
Loan Consolidation - The combining of a number of loans into a single new loan. Usually done to gain more favourable terms e.g. lower cost repayments or longer time to pay.
Principal - A sum of money owed as a debt, upon which interest is calculated. If you purchased an item for $100 on your credit card that would be the principal balance.
Repossession - A creditors taking of property that has been pledged as collateral for a loan.
Secured Debt - A debt on which a creditor has a lien. A car loan would be an example of secured debt.
Term - The time required to repay a loan.
Unsecured Debt - A debt that is not tied to any item of property. Credit card debt is an example of unsecured debt.
Debt Consolidation Mortgage: Home Solutions for Integrating Arrears
Credit card debts, auto loans debts, secured loans debts, unsecured loans debts ? debts of all sorts and types registered against your name. It is hardly a very promising situation. Debt is an obligation from which you can?t turn away. It is obviously not something you aspired for. But it is surely something with which you have contemplated an annulment. If you can?t decide on the procedure consolidation is the word for you. ?Consolidation? ? if you check the dictionary means ?the act of combining into an integral whole?. This is exactly what debt consolidation connotes. Debt consolidation is the act of combining multiple loans into individual, integral loan.
Debt consolidation mortgage not only consolidates your various loans it also consolidates various benefits under one singular name. The name you know is debt consolidation mortgage. There are many things integrated under debt consolidation. It is like an assortment of various payoffs. That certainly does not mean that your debt is paid off. It simply implies that the benefits with debt consolidation mortgage are immense. Debt consolidation that is provided against the security of your home or property is christened as debt consolidation mortgage.
All kind of loan ? educational loans, auto loans, secured loans, unsecured loans, personal loans and any kind of loans ? can be consolidated under debt consolidation mortgage. It is highly appropriate to adopt debt consolidation mortgage if you have numerous debts. However, a prudent step will be to understand debt consolidation if you actually want to apply for it. Debt consolidation mortgage has the capability to be turned in a way so as to allow maximum monetary benefits. Yet, one little error with debt consolidation mortgage and your situation will be back to square one. That means your debt consolidation mortgage plan will fail to fulfill the function it has been postulated for. Further debt consolidation mortgage has an additional attachment which is like your own home that you have placed as a guarantee. In case of error, you are predisposed to lose your property which is under no circumstances an option to be considered.
With debt consolidation mortgage there is no one single simple stat rule for every homeowner. Debt consolidation mortgage plan is formulated in accordance to your particular financial requirements and status. Interest rates have been low for quite some time. It has been more than publicized on every debt consolidation mortgage advertisement. This can undoubtedly tempt you to take on debt consolidation mortgage. But you need a few initial lessons on debt consolidation mortgage. The most important lesson in debt consolidation mortgage is that debt consolidation is not a credit cure but a credit relief. Under no circumstances can debt consolidation mortgage plan make your various debts evaporate without a trace. The debts are very much there. Debt consolidation mortgage fuses the ramified debts in such a manner that the interest rates on the various debts are diminished significantly.
Debt consolidation mortgage has also become synonymous with convenience. Instead of paying monthly installments to different lenders at different point of time in a month you take one single loan and make payments on that loan. It is crucial to understand that the new interest rate that you are paying should be lower than the interest rate that you have paying separately. Debt consolidation mortgage also has such debt consolidation counseling and debt consolidation credit management. Debt consolidation facts vary from person to person therefore taking advice for debt consolidation mortgage is a must.
According to the latest annual report from the APACS nearly two thirds of adults have a credit card and multiple card holding is a growing phenomenon in the UK. More than six in ten card holders held more than one card in 2004, with one in ten holding at least five. With such statistical reports debt consolidation mortgage has become mandatory in the changing trends.
An average UK family has 13 payment cards including credit cards, debt card and store cards. Although the statistics vary it is estimated that an average family has about 8,500 in credit card debt. Astounding! That is the one word that comes to my mind. If one were to make minimum payments it would still take about 30 years to pay off the debt with an additional amount in the form of interest. There is no doubt that above 40% of families are spending more than they earn. With such a statistics it is self evident that the number of bankruptcies is increasing. According to Department of Trade and Industry, bankruptcies are still on the rise in UK. Bankruptcy is not what you ever had in your mind. Then what is that you have in mind to overcome financial obligation. Do I hear that? If that is what you want then take debt consolidation mortgage.
10 Pointers on College Loan Consolidation
Should I consolidate my college loans or not?
1. Still in school, yes! Rates are low, but theyre scheduled to go up. Your college loan payments will then remain as manageable as possible when you leave school. If you have graduated, or will be graduating this May or June, yes! Graduates can lock in historical low rates, and reduce their monthly payments more than half. You can lock in a rate even while still in school, and even if you have been out of school for a couple of years can get a good deal, too.
2. The newest twist in the consolidation puzzle is the in school consolidation, affecting students who are currently enrolled and will be enrolled past the July 1 consolidation. You can consolidate your existing college loans now to secure the low rates for at least part of their student loan portfolio.
3. Consolidating could save thousands of dollars in interest payments on college loans. There are impending student loan rate changes and new interpretation of regulations by the Department of Education, also, Congress is considering ending the fixed-rate program. Experts are urging students to consolidate to relieve themselves of a higher debt load.
4. Many students and families are looking for a simple, clear answer about whether to consolidate college loans or not. The simple answer is to take some of the bite out of the debt by loan consolidation. You could live like a miser and save as much money as possible or consolidate your federal student loans now.
5. For students still in school, you have an opportunity to choose consolidation. Consolidating would put a college loan borrower into repayment status, but the student can defer payments until after graduation by making a deferment request. Consolidating today can have payments put off until graduation.
6. The federal loan program allows consolidation, which is when a borrower pools his student debts together so that only one monthly payment is necessary, rather than several. Its not just the convenience of one payment that is making consolidation so compelling. The most significant aspect of the program is that it allows a person to permanently lock in a lower interest rate on loans. These loans are backed by, or granted directly by, the federal government.
7. Rates for federal Stafford loans, the most prevalent type of student loan, as well as some other types of federal student loans are set annually based on the rate of 91-day U.S. Treasury bills at the end of May. The exact rate wont be known until the end of the month, but experts say it will be about 2 percentage points higher. (Private loans and federal loans cannot be consolidated together.)
8. For the first time, the U.S. Department of Education will allow students still in school to consolidate federally backed loans. Federal PLUS loans can also be consolidated. PLUS loans are used to help pay the cost higher education.
9. Students, regardless of enrollment, should absolutely consolidate their college loans, arranged through the students lender. There are no fees, no credit checks, and interest rates are expected to move higher. Those are good reasons to consolidate.
10. Act quickly to put lock on current federal-aid interest rates. Graduates should act now to insulate themselves from a drastic rate change. Apply early. Do not wait until the last minute to file paperwork. Those who have already graduated or left school should not wait to investigate consolidation. In the first six months after graduation, you are in a grace period. Within that six-month window, you can lock in a low rate on Stafford loans and spread the repayment over as long as 30 years.
If youre going to consolidate, now is the best time to do it.
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