Have you ever felt buried in all the statements — paper, electronic or both — you receive every month from your creditors? If so, you’re not alone; the average American with at least one credit card actually has closer to four cards. Do you feel like the payments you’re making each month are barely making a dent in your debt because interest just keeps growing? Debt consolidation is a strategy that aims to address these challenges by simplifying the repayment process and lowering the amount of interest you’ll pay over time.

Here’s a general overview of what to expect from the debt consolidation process.

Strategy #1: Debt Consolidation Loan

There are three primary ways to approach debt consolidation, each with its own set of pros and cons. Comparing these methods and choosing whichever will serve you best is the most effective strategy.

The first way people can consolidate their debts is with a personal loan. These are available through banks and credit unions as well as debt consolidation programs. The idea behind taking out a loan is that you may be able to secure a lower interest rate than you’re currently paying on high-interest debts like credit cards — and you’ll only have to make one monthly payment instead of multiple.

According to ValuePenguin, the average interest rates for consolidation loans vs. credit cards based upon credit scores are:

• Excellent credit (720 – 850): 4.52 – 20.57 percent
• Good credit (680 – 719): 6.67 – 28.33 percent
• Average/Fair (640 – 679): 7.05 – 30.32 percent
• Poor (300 – 639): 15.06 – 36 percent

As you can see, your credit rating plays a significant role in determining the terms of the consolidation loan for which you qualify. The interest rate will also depend on the size of the loan, the lender, your overall financial history and the length of the loan.

If you decide to go this route, you’ll pay off your high-interest debts immediately. You will then pay the consolidation loan in monthly installments.

Strategy #2: Credit Card Balance Transfers

The concept behind balance transfers is pretty straightforward: You move the balance from a high-interest card to one with little to no interest. You’ll pay a fee to do so, usually three to five percent of the original balance, but you’ll buy yourself a break from crushing interest rates — at least until the introductory period on the balance transfer card ends and the interest rates jump back up.

It’s important to use balance transfers responsibly, and only when you have a plan for aggressively paying down your balance during the grace period without interest. Otherwise you’ll end up paying a fee without really gaining any traction on your debts.

Strategy #3: Cash-Out Refinance

This third strategy applies to homeowners with equity only. It involves refinancing your mortgage and taking out the difference in cash, which you’ll then use to pay down your debts. This can help you avoid delinquency and reduce interest rates, as the interest on mortgages tends to be much lower than that charged against credit card balances and medical bills.

The downside is it’ll add years to your mortgage repayment and require expenses such as closing costs. There’s also some risk involved whenever your mortgage is involved because if you fall behind on payments, the lender could repossess or foreclose on your home.

Essentially, debt consolidation involves replacing multiple high-interest monthly debt payments with a single monthly payment at a lower rate. Whichever strategy you choose, it’s important to know the pros and cons before proceeding.

Gold is obviously a very lucrative commodity, and like all other commodities, its spot prices fluctuate in an ongoing way. If you are looking to make a profit from speculating in the gold market, here are a few tips to help you get started.

• High Risk Business – For someone who knows little about gold to set up a business with a view to making money buying and selling gold, they are taking a big risk. The more you know about the gold market, the better your chances of being successful, and you must always operate with the principle of buying gold at less than market value, and selling for the best possible price.

• Do Some Online Research – If you are going to try your hand at making money from gold transactions, the more you know about the yellow metal, the better your chances of success. Luckily, we have the Internet at our disposal, and a couple of hours here and there will certainly paint a clearer picture of the gold market. When looking to buy or sell gold bullion Brisbane investors prefer, you can rely on an established local gold bullion dealer, as they offer the best prices and you can be sure of payment.

• Look To Buy Gold At Lower Than Market Prices – If you can manage to acquire gold at lower than market value, then making a profit is almost assured. People tend to sell gold for less than it is worth when they have an urgent need for cash, such as after a death in the family, during a divorce, or because of debt. You could, for example advertise that you will pay cash for gold, and should a person who wishes to sell quickly see this, they will likely be in touch.

• Invest In A Gold Testing Kit – This is inexpensive and will allow you to test gold for purity, and any gold that is not hallmarked needs to be tested for purity verification. The kit contains a number of acids and these react when they come in contact with gold, and this is a great method to be certain of gold purity. The average gold testing kit can verify 10,14,18 & 22k, which covers everything you are likely to deal in. There are articles you can find online that look at buying and selling gold to make a profit, and they are must-reads for anyone thinking of getting into the gold business.

• Accurate Scales – If you are looking to trade in gold, then it is essential that you have a set of accurate scales, which is quite an investment, yet it is a one-off payment that will last you for a lifetime.

One thing you will need to do is forge an alliance with a reputable gold bullion dealer, and an online search can help you with this. With a good gold bullion dealer, you can always sell whenever you wish and be sure of receiving the spot price at the time of the sale.

If you are retired, or at least 62 years of age, you do not need to apply for a traditional home loan. Instead, you can potentially qualify for a reverse mortgage. There are several reasons a reverse mortgage may be more appealing to you during retirement. Many of those benefits are described below, along with a few extra considerations.

Understanding the Reverse Mortgage Borrowing Difference

The first benefit you need to understand about reverse mortgages is the difference in how the money is borrowed. When applying for a traditional home loan, you usually receive a large sum of money. Then you must pay it back in small amounts over time. Generally, you owe the total sum back with interest by a set date. That date is typically a few years after you borrow the money.

A reverse mortgage works differently because you do not have to pay any portion of it back early on. In fact, you are encouraged to pay the loan back at a much later date. There is also no particular due date for total repayment. As long as you remain in the home and meet some other basic loan terms, you can spend the money without fear of the loan being called in.

Receiving Reverse Mortgage Funds from Your Lender

Another difference between a traditional mortgage and a reverse mortgage is how funds are received. A reverse mortgage allows you to continuously collect set payments of an established amount every month, if you choose. Those payments only cease when the total amount available to borrow is reached. That means, for a time at least, you can use your reverse mortgage funds to replace some of the monthly income you probably lost when you retired.

If you do not want to receive monthly installments, you can choose another reverse mortgage borrowing option. For example, you can set up a reverse loan to function as a home equity line of credit. That means you can borrow from your available balance as if it was a credit card. You can also opt to just receive one large payment, which may be handy if you are trying to pay for a major unexpected expense.

The Basic Terms of Getting a Reverse Mortgage

Not everything about reverse mortgages is easy. There are some downsides of reverse mortgages to consider. For instance, the basic terms of a reverse mortgage are you can only apply for one on the home you use as your main residence and you must be at least 62 years of age. Therefore, you cannot apply for such a loan on   a piece of property on which you do not reside. Certain apartment buildings are also ineligible for reverse mortgage agreements. Although, if you live in one of the units, a small apartment building you own may qualify. If you leave the residence at any point, whatever amount you still owe is immediately due.

Reverse Mortgage Fees and Borrowing Rules

When you apply for a reverse mortgage, you may not realize there are certain fees involved. For example, you have to pay closing costs as you would with a standard loan agreement. However, those fees are typically deducted before the first payment is ever issued to you. Similarly, any amount needed to pay off an existing traditional mortgage must be deducted before other funds are issued to you.

Before getting a reverse mortgage, you must also consider interest fees. Reverse mortgages tend to accrue higher interest than standard home loans because they last longer. Therefore, you can wind up paying back a much higher amount than you initially borrow.

What Happens When a Reverse Mortgage is Due

If your reverse mortgage is ever called in for any reason, such as if you move to a different residence, you are given a time period to pay the balance back. For example, your lender may allow you six months of grace period. During that time, you must pay any amount you still owe. Failure to do so results in the home being sold. The lender keeps proceeds up to the amount needed to cover the remaining balance.

Which business is right for you?

We have all experienced overwhelm with our financial situation at some point in our lives. It’s incredibly uncommon to have a squeaky clean image- one without mistakes with our money. And what if you’re at the point in your life where you’re making purchases with your credit card, wincing at the register because you aren’t sure if you’ll be declined? You may find yourself with more month at the end of your money, and holding your breath for how the next bill to be paid. 

If you currently live with anxiety because of your debt, and are unable to see a light at the end of the tunnel, it may be time to solicit the help of a debt relief company. We want to provide you with some tips for how you can make an informed choice as you prepare to attack your debt and regain financial independence. 

What is a Debt Solution Company?

A debt solution company is one that provides you multiple methods for resolving your debt. Ideally, it will consult with you to determine the solution that best fits your needs. You’ll learn that not all companies will do this for you, and to keep your eye out for a company who offers consultations and multiple options for you. These options include solutions like: 

• Debt Agreements/Settlement- a method of reducing your debt into payments you can afford.

• Personal Insolvency Agreements- the use of legally binding agreements with creditors that provide flexibility in payments to catch up on debts rather than filing for bankruptcy. This involves giving ownership of property to a trustee to present an offer for payoff to creditors.

• Debt Consolidation– a method of taking all of your debts and consolidating them into one payment, preferably with a low interest rate.

• Bankruptcy– the legal process by which you are absolved of most to all of your debt.

What to Look for in a Debt Solution Company

Many companies providing debt management services may seem like a great option, but once you ask the right questions, you may find they only provide one product or service. You might also find that their services do not protect your assetsduring the time in which you are paying down your debts. Some have a process of paying off debt that leaves negative marks on your credit, or they charge fees that are disproportionate to your efforts to regain control of your finances. Here are some key features of a debt solution company that you should look for in your search: 

• Affordability– How is the debt solution company charging for their services, and what are they charging? Ideally, you will pay no more than 20% in total fees for their services. 

• The duration of services– How long will it take to resolve your accounts and pay off your debts with their programs? 

• Employment– Will this program affect your employment? 

• Credit Rating– Does this company utilize methods that allow for the improvement of your credit rating? 

• Legal Action– Will this company’s approach to your debt payoff stop your creditors from enforcing your debt through legal means? 

• Assets- Will your assets be protected during the time you are paying off your debts? 

• Travel- Will this company’s methods of debt management restrict you from travelling overseas? 

• Lifespan of the Company– How long have they been around, and how lengthy is their experience with debt solutions? 

• Ratings and Reviews– How well does this company stack up against other debt solution companies available to you? 

• Debt Management– How does this company handle debt management? Do they focus on reducing interest rates, applying for hardship programs, or negotiate the balances on your debt? Look for companies who focus on negotiating the balances agreed upon by the creditors because you’ll find that the debt will be categorized as “resolved” and won’t hurt your credit rating. 

You’ve taken the first step with acknowledging that your debt may be a bit larger than you can handle. Consider these questions and tips as you navigate the companies offering their services as you move toward financial freedom.