Entries in category Debt Management

Remortgage Club

Many companies who provide remortgaging solution to their clients also provide remortgage club to their clients. Most of these companies automatically enroll those who have taken mortgage from their company without any charge. Being a remortgage club member you get the benefit of getting reminders on when your ongoing mortgage deal is about to end and even prompts you on remortgaging your loan or at least review it. This is the best means of being aware on the various remortgage deals and makes your money move go further. Many of the mortgage clubs also offer you the facility of free remortgage advice when you plan to remortgage your property with the same lender.

Some of the leg works done by the remortgage club include:

  • They will prompt you when it is the right time to review your mortgage deal.
  • They will compare your mortgage deal with other products which are being offered
  • They will help you select the most suitable mortgage deal from several of them available with their host of lenders.
  • The mortgage expert will mostly contact you directly if you have any further questions.

Remortgage clubs help you find the right mortgage for you or your clients. The remortgage club membership is not always free and many sites charge some minimal fees to be a part of it. They also provide different packages which help you get better deal. Many of them have newsletters published on remortgaging and you can have access to it which widens your view on remortgaging. Remortgage clubs are good for agents as well who can help the clients get good deal on their property and in turn the websites offer them free membership and many other benefits.

The remortgage clubs helps you review your mortgage deals and helps you in deciding how the monthly repayments can be reduced. The club members can check with different lenders and their products and also compare them. The remortgage calculator is also provided by the club so that the clients can check the benefits of remortgaging against the cost involved. They also help the client in getting a better deal and reduce the monthly repayments. They can help you negotiate on lengthening the repayment period so that you can manage your debt better. It is a good option to join the remortgaging club of your mortgage company or some other lenders.

Debt Management FAQ

Debt management plans are a great relief for many who are worried about their debt. When you plan to take up debt management plan through a company or a charity there are several questions that pop up in your mind. Answers of many of these can be found on several company websites as frequently asked questions. Mentioned below are some of the FAQs which might answer your queries. However, if you still have some doubt you can always clarify it through a debt expert.

  • What is debt management plan?
    Debt management plan helps the borrower pay his debt amount through a third party to its creditor. The company negotiates with the creditor for reduced payment and for a longer duration and the borrower has to pay just one single payment to the company who after a small fees, transfers the amount to different creditors.
  • Is DMP or debt management plans a loan?
    No, DMP is not a loan.
  • Will my credit file still be checked?
    No, since Debt Management Plans is not a loan, they will not check the credit file.
  • Will I still be getting phone calls and letters from my creditors for recovery purpose?
    It is most likely that you will be getting them as the creditor is not legally bound for reduced payment. However, the frequency of these may go down as they see that regular payment is being made and that the loan repayment duration is increased.
  • Is there a possibility of making more or less payment?
    Debt management plans are informal negotiations and are not legally obliged. You have the liberty to increase or decrease the payment amount if your circumstances or financial situation changes.
  • Will change of banks required for taking up DMP?
    If one of your crediting banks is your employer then you will need to change your bank to one in which you do not owe any money. This is because it is most likely that the same bank may keep a portion of your wage while crediting your salary.
  • Will I have to cancel my direct debits?
    You should cancel your direct debits to your creditors to prevent them from being paid twice. The normal household bills and insurance should be paid as usual.
  • How do I know that my creditors have been paid?
    The creditors will be sending your statement showing the balance amount of your debt. This will help you know that they have frozen the interest and any kind of charges on your account.

Debt Management FAQ(Detailed)

Managing your personal debt can be a daunting task and a lot of people find the debt to be very stressful. Debt management companies and charities are there to provide you with a helping hand to such people. Debt management helps to manage debt as well as allows you to have enough money to manage your daily expenses. Answers to FAQs or frequently asked questions are also found on many of the company’s website. If you are still left with some question you can take advice from the debt management expert.

Some of the frequently asked questions and their answers are mentioned below:

  • Is debt management plan for everyone?
    If you have an unsecured loan like credit cards or overdrafts and have been struggling to pay them then debt management plan will definitely help you. They will help you negotiate or do themselves to reduce your monthly repayment making it easy to pay your debt and clear it. The debt management companies will ask you to pay single monthly payment to them which they will distribute it to different creditors. The companies may ask for a management fee for the same. However, some debt management charity will do it for free.
  • Debt management plan, how does it work?
    Debt Management plan is offered by some company or charity. They are the third party who goes about negotiating with your creditors to let the repayment being made to be reduced. The creditor and the company negotiate among themselves and agree for a lower repayment. The borrower needs to pay a payment to the company once in a month and they will distribute it to different creditors. The lenders do not have obligation to receive lower payment from you but will do so if they see that you are doing your best to pay back the debt. They may also freeze the interest and charges on the debt which is not necessary though. Only drawback is that paying the debt slowly can affect your credit file for 6 years as you are not paying the original repayment amount.
  • The debt management plans lasts for how long?
    The money that you may have to spend on debt management plan will depend on the amount that you have as unsecured loan and also on the amount that you can pay back every month. Sometimes you may need to be with the debt management plans till the time you pay back the entire debt. If you can afford to pay more every month the debt will get over soon. You need to check the situation regularly so that you can make more of the payment or need to speak to your creditor to accept still lower payment. The lender may accept it just to get back the loaned amount.
  • Do the creditors freeze the interest or charges if I go for debt management?
    Not always, but yes, most of the creditors do agree to freeze the interest applied in your debt or any charges that may apply. This is more problematic when they do not agree to do so as it will increase the amount that you pay back to them as the duration of payment is increased. To save you from this many of the companies try to negotiate so that your creditor agrees to freeze the interest applied or any charges that may apply.
  • Can I add all my creditors to the debt management plans?
    Yes! You may add all your creditors with unsecured loan to debt management plans. However, certain debts with huge penalties may not be covered under debt management plans, like that of your home repossession.
  • How will I know that payment is being made regularly?
    Most of the debt management companies provide you with statement of your repayment to different creditors. However, many of them also provide you access to the internet service where you can check with the payments on your own at your own convenience.
  • Is debt management plans a type of loan?
    The debt management plans are not a loan as in this the company looks for ways to pay back your debt and they do not lend any kind of money.
  • If the repayments are not done regularly what will be the consequence?
    If you have been using debt management plans then your repayment amount will already be very low. However, if your situation has changed due to any reason then you can afford to pay even the reduced amount then you may get in touch with the company for still reduced payment. The company may negotiate with your creditor and alter the amount that you may need to pay them.

Debt management plans are a great relief for people under debt and can be availed at a nominal fees or even free of cost.

Debt Consolidation

Having debt of any kind can be a cause of worry and can even drive you nuts if you have many of them. Managing debt is very important and one of the many ways of doing it is through debt consolidation. Debt consolidation is a process of bringing all your debt under one loan and is one of the best methods of managing your debt. Refinancing may help resolve one debt but the new loan you take may have higher interest rate or a lower interest rate as well. If the interest rate is high you end up paying more interest over a long period of time but if interest rate is less, the amount that you pay back finally is reduced.

It is recommended that instead of managing several loan on credit cards, overdrafts, store loan and other loans and that too on different dates, you consolidate them into one repayment which is affordable. When you have a fixed rate, even the repayments will be the same always. The only thing is that you may have to pay some settlement fee to your existing borrowing.

Have you ever thought of how much you need to borrow to settle all your debts?

  • The only purpose as to why you are taking a loan for consolidation is to replace all your outstanding bills and loans to one lender so that you make only one repayment each month.
  • Calculate the actual amount that you owe to all your creditors and borrow exactly the same amount from another lender.
  • Do not borrow more that the owed amount as it will increase your debt and you will end up paying more to your lender in the long run.

It is always advised that you use any savings that you have in paying off your loan as the interest levied on the loan will definitely be greater than the interest you getting on your savings. People can use budget planner calculator to check all the money that you are earning and that your spending. It will help you know where to make a cut in your expenditure and help you save some money which can be used to pay off loans. Debt consolidation saves you the burden of remembering dates of repayment of each loan and the amount that you have to pay to each of them. So if you have debt from different creditors you can think of putting it under one lender.