Debt consolidation – Blog Campcee Fri, 11 Jun 2021 13:17:45 +0000 en-US hourly 1 Debt consolidation – Blog Campcee 32 32 A guide to DIY – Forbes Advisor Fri, 11 Jun 2021 11:00:35 +0000

Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors.

If you’ve been in a financial hole, you may want to consider seeking help from a debt settlement company so you can say goodbye to your credit card bills or other debt.

However, consumer protection experts say asking a debt settlement company to negotiate your debt settlement can be risky. Unfortunately, some debt settlement companies can over-promise and under-deliver, possibly leaving you in the same financial hole you’re trying to escape.

As an alternative, you can settle the debt yourself. In fact, DIY debt settlement can work better than relying on a debt settlement company. Part of the reason is that professional debt settlement can be the most expensive and least effective way to clear debt.

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The basics of debt settlement

Debt settlement involves negotiating with creditors to drastically reduce the amount of money you owe. Unlike less dramatic forms of debt relief, like debt consolidation or a debt management plan, with debt settlement you only pay back a portion of the principal you owe.

Say, for example, you are behind on $ 5,000 that you owe to one credit card issuer and $ 5,000 that you owe to another credit card issuer. In order to get back at least some of their money, the card issuers then decide to accept a lump sum payment of 50% of what you owe. So instead of not receiving a dime from you, each creditor receives a lump sum payment of $ 2,500.

Benefits of DIY Debt Settlement

The main benefits of pursuing do-it-yourself debt settlement revolve around the cost. A DIY settlement avoids the fees you might pay to a professional debt settlement company.

A debt settlement company may charge a fee totaling 15-25% of the amount settled. So, if you pay off a debt of $ 10,000 for $ 5,000, you may have to pay fees of up to $ 1,250 or even more.

If you choose to negotiate a DIY debt settlement, you are not giving up your personal control over the timing of the process.

Disadvantages of DIY Debt Settlement

Whether you take on the task yourself or contact a debt settlement company, you could face a tax burden if you achieve a settlement. If a debt of at least $ 600 is forgiven, you will likely pay income tax on the canceled amount.

Another downside to personal or professional debt settlement is that your credit score will drop and the settlement will stay on your credit report for seven years.

And remember, if you decide to DIY, you’ll be on your own. In other words, you won’t have a debt settlement professional or someone else to negotiate on your behalf.

The negotiation process

Here are seven steps you can take as you get started on your debt settlement path.

1. Dig into your debt. Before you do anything else, assess your debts. How much do you owe? Who are the creditors? Is it possible to repay debts without entering into a settlement agreement? Or would it be impossible to erase debts without getting a break on the amount you owe?

2. Do your homework. Go online to find out how creditors (or debt collectors, if creditors no longer handle debt) handle debt settlement. If you can’t find the information online, call your creditors and ask them how they are handling debt settlement. Keep in mind that not all creditors will agree to a debt settlement.

3. Hide money. Telling creditors that you saved money to settle the debt can give you an advantage in negotiating with them. This is because most will want a lump sum payment, although some may be fine with dividing the dollar amount into monthly payments.

4. Prepare to negotiate. Once you’ve done your research and set aside some money, it’s time to figure out what your settlement offer will be. Typically, a creditor will agree to accept 40-50% of the debt you owe, although it can go up to 80%, depending on whether you are dealing with a debt collector or the original creditor. Either way, your first lump sum offer should be well below the 40% to 50% range to leave room for negotiation.

5. Contact the creditor. With your offer in hand, call the creditor. Ask for a manager or the creditor’s “financial aid” department. You may need to call a few times until you end up talking to someone who understands your situation.

6. Put it in writing. Once you and the creditor have agreed to a debt settlement, be sure to get the details in writing. This will help protect you in case any issues arise later.

7. Pay the money. Now that you have the agreement in writing, you need to stick to the agreement. It means making a timely payment (or timely payments if you’ve made a longer-term plan) and paying every penny you’ve agreed to pay.

How to negotiate with creditors

When negotiating with a creditor, try to settle your debt at 50% or less, which is a realistic goal based on the creditors’ debt settlement history. If you owe $ 3,000, aim for a settlement of up to $ 1,500. However, you will begin your negotiations by offering to pay an amount significantly less than 50%, in order to give you and the creditor some room to negotiate.

Be sure to let the creditor know that you have set aside money to make payments, whether it is a lump sum payment or a payment plan. This can give you an advantage in your negotiations. If you enter into a payment plan, ask if the creditor will lower the interest rate on the debt to ease your financial burden. During your negotiations, keep a written record of all your communications with a creditor. Finally, keep your cool and be honest. Being emotional and lying will not help your cause.

Keep in mind that most creditors won’t settle a debt unless you are seriously behind on your payments. Additionally, if you negotiate with the original creditor, they may insist that you pay up to 80% of your past due debt.

How to negotiate with debt collectors

In some cases, a creditor may have turned your debt over to a debt collector. Debt collectors earn money by collecting overdue debts from a creditor, such as a credit card company.

When dealing with debt collectors, be patient. It may take several attempts to get to the type of settlement you are comfortable with. Resist the pressure to agree to a settlement that is not in your best interests. Also ask if the debt collector is prepared to settle the debt through a payment plan rather than all at once, with a single lump sum payment.

Final result

Do-it-yourself debt settlement negotiations will almost certainly consume a good deal of your time and energy, and it could take some time to come to an agreement. Ultimately, however, all of your hard work may be worth it, especially if you are able to position yourself for a better financial future.

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Frequently Asked Questions

What percentage of a debt is generally accepted in a settlement?

A creditor can agree to accept between 40% and 50% of the debt you owe, but it can go up to 80%. The original creditor is likely to seek a higher percentage repayment. If you already have debt with a debt collector, they may be more willing to accept a lower amount.

How Does Debt Settlement Affect Your Credit?

Debt settlement can hurt your credit score by more than 100 points and the settlement will stay on your credit report for seven years. Add that to any past due debt you may already have, and your credit may take a long time to recover.

Why is debt settlement considered a last resort?

Debt settlement is considered a strategy of last resort because of the damage it causes to your credit. Other options that require you to pay off the full amount of the main debt – and therefore do not negatively affect your credit score – include debt consolidation and debt management plans.

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How does it work and is it worth the risks? – Councilor Forbes Thu, 10 Jun 2021 16:30:22 +0000

Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but this does not affect the opinions or ratings of our editors.

When you are struggling with past due debt, you might wonder if debt settlement is the right way to deal with it. This can be a viable option, depending on which approach you take: going to a third-party debt settlement company or settling the debt on your own.

Experts warn that using a debt settlement company can be an expensive and risky alternative. Meanwhile, a do-it-yourself settlement plan may work, but it can be difficult to achieve.

Read on to learn more about the ins and outs of working with a debt settlement company.

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The basics of debt settlement

Debt settlement, also known as debt negotiation, involves writing off debt by paying off part of it all at once. This sum is usually much less than what you owed initially.

For the borrower, debt settlement can provide financial relief and put them on the path to rebuilding their credit. For the creditor, debt settlement allows him to receive at least part of the money owed to him rather than no money at all. Also, it can mean that the borrower can avoid filing for bankruptcy. Although, according to some experts, filing for bankruptcy may be the best alternative in some cases.

Normally, debt settlement involves money you owe credit card issuers, rather than other types of debt. But you may also be able to settle other unsecured debts.

How Debt Settlement Works

Debt settlement handled by a debt settlement company differs from taking a DIY approach. Here is what the process looks like when hiring a debt settlement company.

1. Look for debt settlement companies. A number of legitimate debt settlement companies operate in the United States. Most states require them to be licensed. Debt settlement companies are supposed to follow industry regulations designed to protect consumers and their money.

2. Be careful. If a debt settlement company promises certain results, proceed with caution. For example, they cannot guarantee that a creditor will even agree to a debt settlement. As you research, check the websites of your Better Business Bureau, your state’s attorney general’s office, and consumer protection agencies like the Consumer Financial Protection Bureau (CFPB).

3. Learn about the costs. Once you’ve focused on a debt settlement company, find out how much they charge for debt settlement. If the company sidesteps your cost questions, it may be a sign that this is a shady transaction. Debt settlement companies typically charge a fee of 15% to 25% to settle your debt; it can be a percentage of the original amount of your debt or a percentage of the amount you agreed to pay. Let’s say you have $ 10,000 in debt and you settle for 50%, or $ 5,000. In addition to the $ 5,000, you may be required to pay an additional $ 750 to $ 1,250 in fees to the debt settlement company.

4. Review your finances. Debt settlement companies often require that you put money in a special savings account for 24 months or more before the debt is fully settled. These payments are used as a lump sum settlement of your debt. In some cases, you may find it difficult to keep up with these payments. Therefore, you may give up on the settlement agreement before all or part of your debt is paid off. To avoid this scenario, take a look at your budget to see if you would be able to pay off debt for 24 months or more.

5. Ask about the schedule. It often takes two to four years to complete the debt settlement process. During this period, you can accumulate interest and fees charged by the creditor, in addition to the fees charged by the debt settlement company. Why might you be charged interest and fees by a creditor? Because debt settlement companies often suggest that you stop making payments to your creditor while you are working with a settlement company and instead transfer that money to a special savings account. Be aware that if you have interrupted payments to your creditor, you could be contacted by debt collectors or even be sued.

6. Select a debt settlement company. If you are fully aware of the potential pitfalls and ready to move forward with debt settlement, it is time to choose a debt settlement company based on your research.

7. Nail the details. Before doing business with a debt settlement company, make sure you are familiar with the schedule and fees. Additionally, ask how much of your upfront payments will go to company expense and how much money you will end up paying over time.

8. Know the tax consequences. The IRS considers any canceled debt as taxable income if it exceeds $ 600. So if you settle a debt of $ 10,000 for $ 5,000, the $ 5,000 that was forgiven will likely be taxed.

The risks of debt settlement

Debt settlement can be good or bad, depending on your situation. Here are some potential risks associated with debt settlement.

Negotiation issues

The harsh truth is that the creditor can reject the offer to settle. Therefore, you and the debt settlement company may need to submit a counter offer. You might also be required to contact the original creditor to see if you can work out a payment plan. In the worst case, you may owe more than you initially owe and a rejected settlement offer could send you out of business.

Increase in debt

Fees paid to a debt settlement company or fees and interest charged by an original creditor could add hundreds or even thousands of dollars to your debt.

Negative impact on credit rating

Since creditors are motivated to settle debt only when they think it’s the only way for them to get paid, your accounts may already be or will become overdue when you make payments to the settlement company. debt. A debt settlement will lower your credit rating, perhaps by more than 100 points, and the damage could last awhile: a debt settlement will stay on your credit report for at least seven years.

Alternatives to debt settlement

If you find yourself burdened with debt, you have several options that are less risky than debt settlement, whether working with a debt settlement company or conducting homemade debt settlement negotiations. Here are four alternatives to debt settlement.

Balance transfer

You may be able to transfer your debt through a balance transfer to a credit card that offers 0% APR for an introductory period, up to 18 months. If you pay off the balance before the 0% period expires, you can avoid accumulating interest on the debt.

Debt Consolidation Loan

A debt consolidation loan can allow you to combine multiple debts into one reasonable monthly payment at a lower interest rate than you are currently paying.

Non-profit credit counseling

Visit with an advisor to a non-profit organization credit counseling agency can help you get back on your feet financially. Among other things, a credit counselor can help you budget, make recommendations on debt consolidation, advise you to close at least some of your credit card accounts, or advise you on bankruptcy.

Debt management program

One of the tools available to a nonprofit credit counselor is a debt management plan, or debt management program (DMP). If you’re enrolled in a DMP, the advisor will consult with your creditors to work out a debt repayment plan that combines your debts into one monthly payment, a payment that may be less than the total of all the payments you make. now.

Next Steps If You Want To Move On With Debt Settlement

If you want to proceed with debt settlement, be sure to consider the impact it will have on your credit. For example, how much could your credit score drop and how long will the debt settlement stay on your credit report? And how much will the debt settlement company charge for negotiating with your creditors?

Final result

There are significant risks involved in settling debts through a business. Therefore, it is important to weigh potential alternatives, such as debt consolidation or nonprofit credit counseling, before entering into a relationship with a debt settlement company.

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Frequently Asked Questions

What percentage of a debt is generally accepted in a settlement?

Typically, you can expect a creditor to agree to repay around 50% of the total debt owed. In settling your debt, the creditor agrees that it is better to receive partial payment than to risk not receiving payment.

How Does Debt Settlement Affect Your Credit?

Settling debts can drop more than 100 points in your credit score, and it stays on your credit report for seven years. If your creditors close accounts as part of the settlement process, it can lead to increased use of your credit, which also negatively affects your credit score.

Can you negotiate debt settlement yourself?

Yes, you can negotiate your debt settlement on your own, although it may take a long time and patience to get there. You will need to have the necessary cash to make the required payments. And remember that your creditors are not required to agree to a debt settlement.

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Potential for fraud and long-term financial stress due to student loans – SWARK Today Wed, 09 Jun 2021 20:18:10 +0000

LITTLE ROCK – Students in Arkansas are in the early stages of preparing for the school year in August and some are applying for student loans. It’s important to always read the fine print and watch out for scammers who try to take advantage of unsuspecting victims. There are some key things every student should know before accepting a loan that often takes decades to repay.

“A student loan should be a short-term obligation to give students the opportunity to succeed,” said Attorney General Leslie Rutledge. “Unfortunately, these loans are too often carried over for decades and prevent our best and brightest from investing or taking risks as entrepreneurs.”

Attorney General Rutledge gave the following advice to students considering taking out a student loan:

Make sure you understand your loan. Before taking out a loan, make sure you understand the repayment terms and other loan obligations, the interest rates and how they will be applied to the loan, and where to find your balance and your post-payment schedule. ‘graduation. For federal loans, visit the National Student Loans Data System (

Take advantage of the grace period. Often there is a grace period after you graduate or graduate from college or university. It is important to know the length of the grace period and whether interest will be charged during the grace period. Grace periods allow you to have your feet on the ground while making a plan to pay off the loan.

Know your repayment options. Every loan is different and some offer the ability to change payment options based on your income rather than a fixed monthly amount. In some cases, if you are going through financial difficulties, it is possible to temporarily defer payments.

Beware of loan consolidation and refinancing offers. Many companies offer loan refinancing options, but may not provide the service promised or provide services that consumers can access for free. Consumers should know all the details of any loan refinance offer before signing up for an offer.
Check your credit report to see all of your student debt, including federal and private student loans.
Consider part-time work, a work-study program and all the scholarships available to keep student debt as low as possible.

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How To Get Out Of Payday Loan Debt Now Tue, 08 Jun 2021 15:58:45 +0000

Payday loans can be tempting when you need cash right away. These loans are available regardless of your credit score and provide immediate access to cash that you borrow for a short period. Unfortunately, payday loans are also extremely expensive with interest rates that can be around 400% depending on the market. Consumer Financial Protection Bureau.

If you have payday loan debt, you need to get out of it now and avoid this type of loan in the future. It is difficult, but the steps you will need to take to get out of payday loan debt include:

  • Request a repayment plan from your lender
  • Using low-interest debt to pay off a payday loan
  • Commit to no longer borrow
  • Pay extra on your personal loan
  • Consider debt settlement or bankruptcy

To better understand the payday loan debt repayment process, let’s take a look at each of these steps in more detail.

Request a repayment plan

With the interest and fees so high on payday loans, it can be almost impossible to make payments while on a budget. The good news is that you may have options to lower your payments.

Some states require payday lenders to allow an extended repayment plan that gives you more time to pay off payday loans without incurring additional penalties or fees. However, laws vary from state to state, and your lender may have the right to charge you a fee for entering into a repayment plan.

You can find out the laws in your state by consulting the National Conference of State Legislative Assemblies.

Even if your state does not require lenders to provide a payment plan, lenders may be willing to work with you if they are concerned that they will not receive anything otherwise. So it doesn’t hurt to let your lender know that you can’t continue paying as planned and that you need to find a solution.

Asking for a payment plan is much better than taking out more payday loans because too much of your budget is being absorbed by payments on the loans you already have.

Using low-interest debt to pay off a payday loan

There are other types of debt that are much more affordable than payday loans.

Alternative payday loans offered by credit unions are an example of a loan that you could potentially get quickly and use to pay off existing debt. You can also apply for a debt consolidation loan.

A debt consolidation loan is simply a new loan that you can use to pay off other existing debts. Often, debt consolidation loans combine several existing debts into one large loan. But you can decide which debts to include in your consolidation.

While some lenders specifically advertise “debt consolidation loans”, it is possible to consolidate debt with any type of personal loan:

The key is to shop around and find a loan at the most affordable rate and on the most favorable terms possible.

If you are able to get a personal loan, you can significantly reduce the interest rate and the borrowing costs that you pay compared to payday loans. More of your money will be used to pay off your principal balance so that you can actually pay down your debt.

And personal loans come with fixed repayment schedules that typically give you several years to pay off your loan. This extended repayment period can make your monthly payments more affordable. That way, you won’t have to borrow more money when your paycheck doesn’t stretch enough to pay everything you owe and cover expenses.

You can also use other types of loans, such as home equity loans, to consolidate your debt, but these can take longer to qualify, lead to higher closing costs, and put your home at risk. as a guarantee.

Commit to no longer borrow

Once you borrow with a payday loan, the high fees and short repayment period associated with your loan can sometimes make it difficult to stop borrowing. In fact, many people end up taking out one payday loan after another or even taking out multiple payday loans at the same time. It can quickly lead to financial disaster when a large chunk of your paycheck is pledged to lenders before you even get it.

Unfortunately, at the end of the day, you can’t borrow money to get out of debt, especially with high interest loans like payday loans. We must break the cycle by not making more credits. However, it can be very difficult if your paycheck doesn’t extend far enough due to the payments you are already obligated to make.

The best way to make sure you don’t borrow again is to have a detailed budget that you live on. Calculate what your income is each month and add up all your essentials and discretionary expenses. You will need to make sure that your expenses and expenses do not exceed your income. If this is the case, you will have to keep borrowing forever and you will never be able to get rid of your payday loan debt.

If your income doesn’t cover your expenses, start looking for places to cut back on your expenses. This could mean cutting coupons to cut your food budget or finding a roommate to make rent more affordable. If you are running out of money to cover your expenses, you may really need to cut spending to the bone, but it is necessary to do so at least in the short term so that you can get out of debt.

If you really want to pay off your debt as quickly as possible, making additional payments is essential. When you make the extra payments, it will cost you less overall to pay off your debt and lessen the time it takes to get rid of your debt.

Paying extra on your loan will reduce the balance faster because all the extra money is spent on the principal. And the more you reduce your balance, the less interest you will pay since interest is charged on a lower amount.

You can make additional payments by living on a conservative budget that cuts down on expenses. You can also look for additional cash to increase your payout. To find extra money to pay off your payday loans, consider:

  • Doing overtime
  • Work alongside
  • Sell ​​things you don’t need

Consider drastic solutions like bankruptcy

Sometimes you may not be able to agree on a repayment plan that makes payday loans affordable for you, and you may not be able to get a new loan that makes payday loan repayment affordable.

If you find yourself unable to make your payments and continue to cover your essential monthly expenses, you may have no choice but to try to settle your debts or file for bankruptcy.

Debt settlement involves making an agreement with the creditors to pay less than the total owed and have the rest of your debt canceled. Debt settlement attorneys or debt settlement companies can negotiate this type of agreement with payday lenders, but you will have to pay a fee.

You can also try to negotiate this type of agreement yourself by informing payday lenders that you do not have the capacity to pay as promised. If you can offer a lump sum payment of a portion of your debt in exchange for forgetting your debt balance, this approach often works best.

Just be aware that lenders generally won’t take a settlement unless you’ve missed payments – and debt settlement is hurting your credit score. You will also want to get your agreement in writing before paying anything.

If debt settlement doesn’t work and payments are unaffordable, bankruptcy may be your only answer. Bankruptcy will allow you to pay off eligible debts, including payday loan debts.

The process by which debts are discharged depends on whether you file Chapter 7 or Chapter 13. Chapter 7 requires you to assign certain assets to the bankruptcy estate so that creditors can be partially paid. Chapter 13 requires you to make payments on a three to five year payment plan before the debt balance is written off.

Bankruptcy hurts your credit score, but it can get you out of a deep hole if you have a lot of payday loans and other debt that you can’t afford to pay off. Once your debt has been discharged and is no longer collectible, you can start rebuilding your credit. This can be done over time by living within your means and getting a secure credit card that you pay off on time to develop a positive payment history.

How Can You Pay Off Your Personal Loan Debt?

In the end, there is no one right approach to getting payday loan debt repayment.

Finding a repayment plan makes sense if your state requires lenders to authorize them or if your lenders are willing to work with you. Taking out a new loan at a lower rate to pay off payday loan debt may work if you qualify or if a loved one will allow you to borrow. It is possible to pay extra on your loans if you can work more or sell additional items to earn more money.

But if none of these options work for you, debt settlement or bankruptcy may be the only way to finally free yourself from payday loan debt.

Carefully consider each possible option, weigh the pros and cons, determine which solutions are viable, and then act. Start working on your approach today because you absolutely want your payday loans paid off as quickly as possible before they cost you even more.

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Mortgage Coach Adds Debt Consolidation Strategies In Total Cost Analysis To Educate Consumers On Financing Options Using Their Home Equity national Tue, 08 Jun 2021 13:00:32 +0000

CORONA, Calif., June 8, 2021 (SEND2PRESS NEWSWIRE) – Mortgage Coach, the only platform for mortgage lenders to create digital and accurate home loan options for consumers, today announced the addition of detailed debt consolidation strategies in the Total Cost Analysis showcase ( TCA), allowing loan originators to educate consumers on low-interest debt repayment options as advanced securities offer household cash relief.

According to the Federal Reserve’s first quarter data, there is $ 21 trillion in US home equity and around $ 4.6 trillion in non-mortgage consumer debt such as credit cards, loans. automobiles and university loans, with revolving and student debt increasing during the pandemic period. Job Loss. At the same time, mortgage rates remain at historically low levels.

Mortgage lenders use the Mortgage Coach platform nationwide to create millions of multiple option loan comparisons each year. Each personalized TCA presentation is delivered to the borrower via a digital link via email or text, giving the borrower a personalized digital experience and the ability to make an informed decision about their mortgage. The added Mortgage Coach debt consolidation illustrations allow loan originators to easily review detailed consolidation scenarios in presenting a borrower’s total cost analysis including comparisons between a mortgage without debt consolidation , a mortgage consolidating all the consumer’s debts and a mortgage with partial consolidation of debts, offering both short and long term visions of interest savings and the impact on cash flow.

“One of the most powerful elements of a Mortgage Coach debt consolidation strategy is to show borrowers alternatives as to how to apply the funds they would otherwise spend on debt,” said the president of Finance of America, Bill Dallas. “Using Mortgage Coach to present a debt consolidation strategy supports our commitment to helping people make informed decisions about borrowing and their most important life purchases. “

Mortgage lenders who currently use Mortgage Coach will find its easy-to-understand debt consolidation strategies intuitive to their borrowers thanks to its clearly labeled calling position on the Total Cost Analysis Summary.

From the short term tab of the Debt Consolidation Call, the borrower has a view of the interest savings by consolidating the debt based on selected time parameters and can explore how the costs such as the Mortgage insurance were calculated via information windows on each strategy, allowing a comparison of the total cost of each option against each other and net savings for these new options.

In the long-term section, lenders can change the settings for any time horizon aligning with the borrower’s goals, such as planning a children’s college in five years, planning the retirement in 15 years or planning for other life events that allow borrowers to align their goals with parameters meaningful to their particular financial needs.

“We are excited to unveil this innovation at a time when rising home equity offers many borrowers relief from high interest consumer debt or lingering student debt,” said Joseph Puthur, president of Mortgage Coach. “Any lender and borrower can now easily explore refinancing options by leveraging home equity strategies to pay off consumer debt at historically low rates, while still keeping a manageable mortgage. Understanding how to best use home equity is straightforward and accurate for anyone with this addition to our total cost analysis.

About Mortgage Coach

Mortgage Coach is the only platform that allows mortgage lenders to create digital and accurate home loan comparisons for consumers. With the presentation of the total cost analysis, lenders can create a multi-option comparison, providing the borrower with a more personalized digital experience. This level of transparency has revolutionized the pricing and pricing process, allowing borrowers to make faster, more informed mortgage decisions and ultimately increase pipeline production and conversion for lenders of all sizes. . For more information on how to start using borrower education as a competitive advantage, please visit

NEWS SOURCE: Mortgage Coach

This press release was issued on behalf of the information source (Mortgage Coach) who is solely responsible for its accuracy, by Send2Press® press wire. Information is believed to be accurate but is not guaranteed. Story ID: 72480 APDF-R8.2

© 2021 Send2Press®, a press release and electronic marketing service of NEOTROPE®, California, United States.

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IMF Executive Board Concludes 2021 Article IV Consultation with Belize Mon, 07 Jun 2021 21:14:54 +0000

Washington, DC: The Executive Board of the International Monetary Fund (IMF) Concludes Article IV Consultation[1]with Belize.

The COVID-19 pandemic has hit Belize hard. After successful containment of the first wave of the pandemic, the country experienced a second wave from June 2020. This wave was brought under control, but it left Belize with one of the highest numbers of cases and deaths per capita in the Caribbean. The pandemic also led to a 72% drop in tourist arrivals in 2020 and a decline in activity in contact-intensive sectors, causing real GDP to contract 14.1% in 2020. The fiscal position s ” deteriorated markedly, with the primary deficit widening from 1.3% of GDP in fiscal year 2019/20 to 8.4% in fiscal year 2020/21, and public debt falling from 97.5% % of GDP in 2019 to 127.4% in 2020.

The recovery from the pandemic is expected to be extended. Tourist arrivals remain low but are expected to pick up at the end of 2021 when vaccines become more widely available in advanced countries. As a result, real GDP is expected to grow 1.5% in 2021 and 6.2% in 2022, not returning to its pre-pandemic level until 2025. The fiscal position is expected to improve over time. , in line with the fiscal consolidation measures included in the 2021/22 budget, and the expected revenue recovery and outcome of pandemic-related spending. However, public debt is expected to remain high, peaking at 132% of GDP in 2021 and gradually declining thereafter to reach 111% in 2031. External financing is expected to gradually decline over time, worsening reserve adequacy and threatening the sustainability of the economy. anchoring of the currency. Belize’s economic outlook is subject to significant downside risks, especially due to a resurgence of the pandemic and natural disasters.

Board assessment[2]

Directors noted that the pandemic had hit Belize hard, resulting in a high number of deaths and a deep economic recession. The recovery is expected to be prolonged and subject to significant risks. Directors noted that the country faces difficult challenges, including unsustainable public debt, growing external imbalances and vulnerability to natural disasters and climate change. In this context, Directors underscored the urgency of restoring debt sustainability while providing short-term support to the most vulnerable and implementing structural reforms to boost inclusive growth and build resilience.

Directors agreed that restoring debt sustainability requires sufficient debt restructuring and ambitious fiscal consolidation, anchored in a credible medium-term strategy. They welcomed the significant consolidation measures approved this year and encouraged a further gradual increase in the primary balance, building on both revenue and expenditure measures, while strengthening the social safety net. Directors recommended broadening the tax base, strengthening revenue administration and redefining spending priorities. They also encouraged the authorities to draw up contingency plans should downside risks materialize.

Directors stressed that growth-friendly structural reforms would support public debt reduction. They urged measures to improve access to credit, reduce barriers to entry for businesses, improve infrastructure, and strengthen law enforcement and social programs to reduce crime. Directors recommended continuing to build resilience to climate change and natural disasters, including developing a disaster resilience strategy.

Directors noted that restoring debt sustainability would also help reduce external imbalances and strengthen the currency peg. They called on the authorities to limit central bank funding to the government, which, together with fiscal consolidation, would help reduce the current account deficit, improve access to external financing and increase reserves.

Directors stressed the need to preserve financial stability. This requires maintaining appropriate rules for classifying and provisioning loans, phasing out loan forbearance and deferral measures by banks, and strengthening prudential standards as the pandemic recedes. Directors encouraged continued efforts to strengthen the AML / CFT framework, with emphasis on the application of sanctions for non-compliance and reforms to mitigate risks associated with the international financial services sector. .

Table 1. Belize: Selected social and economic indicators

I. Demographic and social indicators

Area (km²)

22 860

Human Development Index (ranking), 2017


Population (thousands), September 2020


Under-five mortality rate (per thousand), 2017


GDP per capita, (current US $), 2020

3 917

Unemployment rate (percentage), September 2020


Life expectancy at birth (years), 2017


Poverty (percentage of total population), 2009


II. Economic indicators











National income and prices

(Annual percentage changes, calendar year)

GDP at constant prices










Consumer price (average)










Central administration 1 /

(As a percentage of fiscal year GDP)

Revenue and grants










Current non-interest expenses










Interest payment










Net investments and loans










Capital expenditure










Net loan










Primary balance










Global balance










Public debt

(As a percentage of calendar year GDP)

Public debt 2 /










Domestic debt










External debt










Main payment






























Money and credit

(Annual percentage changes, calendar year)

Credit to the private sector










Money and quasi-money (M2)










External sector

(Annual percentage changes, unless otherwise indicated)

External current account (percentage of GDP) 3 /










Real effective exchange rate (+ = depreciation)



Gross international reserves (US $ millions)










In months of imports










Memorandum Articles

Nominal GDP (BZ $ million)

3 765


3 302

3 419


3 936


4 260


Sources: Belize authorities; UNDP Human Development Report; World Development Indicators, World Bank; Poverty assessment by country in 2009; and IMF staff estimates.

1 / Fiscal year (April to March).

2 / Public debt includes central government debt as well as financial and non-financial public sector external debt.

3 / Including official subsidies.

[1]Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with its members, usually annually. A team of employees visit the country, collect economic and financial information and discuss with those responsible for the development and economic policies of the country. Back at headquarters, the staff prepare a report which forms the basis for the Board of Directors’ discussion.

[2]At the end of the discussion, the Managing Director, in his capacity as Chairman of the Board, summarizes the points of view of the Executive Directors, and this summary is sent to the country’s authorities. An explanation of all the qualifiers used in the summaries can be found here:

/ Public distribution. This material is from the original organization and may be ad hoc in nature, edited for clarity, style and length. View full here.

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How to Manage Your Money, Get Out of Debt & Achieve Financial Freedom, Consumer News & Top Stories Sun, 06 Jun 2021 20:00:00 +0000

Debts can pile up on you like a thief overnight. It starts off innocently enough – maybe you let your credit card balance roll around for a few months or take out a personal loan to keep you going until payday. Next thing you know, your mailbox is full of invoices.

If you’re juggling multiple credit card bills and / or unsecured loan payments, signing up for a debt consolidation plan can be a nifty way to make paying off your debt a little easier.

What Is Debt Consolidation And How Can It Help You Take Control Of Your Finances? (Watch the video at the top or read on to learn more.)


Whether you are facing a job loss, a pay cut, or multiple mortgage and bill payments, you are not alone in experiencing cash flow issues this year, given the current economic recession.

Turning to credit card debt or personal loans can be a short-term way to deal with day-to-day costs, but the relief they provide can quickly turn sour, especially if you’re not sure you can. pay your bills in full. each month.

To make matters worse, unsecured debt, which refers to loans that are unsecured, can come with high interest rates, causing your debt to grow faster than a hungry teenager.

A good debt consolidation plan can help alleviate all of these pain points.

hsbc debt consolidation plan, consolidate
With debt consolidation, you can consolidate everything you owe into one new loan: a single repayment plan with a much lower interest rate. PHOTO: SPH

First of all, debt consolidation allows you to transfer all of your unsecured debt to one repayment plan. You will only have to pay one bill per month, which means less wasted time and less stress.

Then, debt consolidation allows you to take advantage of attractive interest rates, saving you money instantly. The interest rate charged by the financial institution offering the plan will replace the interest rates you previously paid.

Debt consolidation plans can also come with a longer loan term than your current loans. If you need to, you can pay off your debt at a more comfortable pace without worrying about falling behind on your payments or receiving angry phone calls from your creditors.

When you successfully apply for a debt consolidation plan, you won’t be able to take out new unsecured loans or new credit cards until your debt reaches eight times your monthly salary. But do not worry. This is only a temporary situation that prevents you from accumulating new loans until your existing debt is under control.

By helping you pay off your loans faster, easier, and more cheaply, debt consolidation can be a useful tool in helping you achieve financial freedom.

Just as you shouldn’t buy a new computer without understanding its features, you should know what factors to consider when evaluating a debt consolidation plan. Here are five questions you should ask yourself when choosing a debt consolidation plan.

1) What is the interest rate?

The interest rate is one of the most important factors to consider when choosing a debt consolidation plan. Simply put, a lower interest rate makes the loan cheaper for you. You should therefore try to choose a plan that offers a more competitive interest rate than what you are currently paying on your loans.

An easy hack is to use The HSBC loan calculator to calculate your monthly payments. This information can be useful when selecting a debt consolidation plan.

Banks often use the terms “flat rate” and “EIR” to describe the interest rates on their debt consolidation plans.

Flat rate interest rates are charged based on the amount of your principal. For example, if you borrow $ 10,000 at a fixed annual interest rate of 3.5%, you will pay $ 350 in interest per year.

The effective interest rate, or EIR, is usually higher than the fixed interest rate and measures the actual interest rate you actually pay taking into account all other costs incurred such as processing fees, the cost of compound interest and your repayment schedule.

HSBC’s Debt Consolidation Plan offers fixed interest rates starting at 3.4% per annum. Processing fees are waived, keeping the EIR as low as 6.5% per annum *.

2) How much are the processing fees?

One-off processing fees are charged by some banks at the start of a debt consolidation plan. These fees must be paid in a lump sum or as a percentage of the loan amount.

Processing fees make a plan more expensive for you and increase your EIR. But of course, no one wants to have to pay more money, especially when you are already in debt!

Fortunately, the HSBC Debt Consolidation Plan waives the processing fees so that you don’t have to worry about the hidden costs when transferring your debt to the plan.

3) Are you eligible to subscribe to the plan?

hsbc debt consolidation plan checklist

Singapore debt consolidation plans are generally intended for Singapore citizens and permanent residents only.

You will need to meet certain income requirements to successfully apply for the plan. In the case of HSBC, you must have an annual income of $ 30,000 to $ 120,000 for salaried employees, or $ 40,000 to $ 120,000 for self-employed or commission employees.

Plus, your total credit card and unsecured loan balance should be at least 12 times your monthly income.

4) What is the term of the loan?

The term of the loan is the length of time that the debt consolidation plan will run. If you need more time to pay off your loan, you can opt for a plan with a longer loan term.

Opting for a longer loan term allows you to spread your payments over a longer period. However, note that in some cases you could end up paying more than you would under your existing agreements, even if the interest rate on the new loan is lower than what you are charged by your credit providers. current loan.

Conversely, if you are able to pay off your debt in a shorter period of time, you can opt for a shorter loan term to reduce the total amount of interest paid during the plan.

Before moving on to a debt consolidation plan, you should determine whether you will need to pay prepayment charges to your existing loan providers, and carefully assess whether this new loan deal would be appropriate given your circumstances.

The HSBC Debt Consolidation Plan offers a loan term of up to 10 years, giving you the freedom to pay off your debt as quickly or as slowly as you want.

5) Are there any promotions currently?

A good promotion can sweeten the deal and save you money.

If you currently have a debt consolidation plan with another bank and decide to switch to HSBC, you will receive 5% cash back of your loan amount upon approval of your plan. *

To find out more about your financial health, you can also receive a free copy of your Credit Bureau Report sponsored by HSBC.

HSBC Debt Consolidation Plan can help you manage your debt. To know more, leave your contact details with HSBC here and a loan specialist will contact you within one business day.

* Baths and conditions of application.

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Ireland’s debt-to-equity ratio could drop to pre-covid levels after 2026 due to deficit reduction and strong growth Sun, 06 Jun 2021 07:12:22 +0000

The consolidation of Irish public debt, measured as a percentage of modified gross national income (GNI *) – an indicator of the underlying output of Ireland’s globalized economy – will be slower than that of the nominal debt-to-GDP ratio , with the latter measure set to fall to pre-crisis levels by 2025 in the absence of a significant adverse shock. The GNI benchmark * excludes the economic contribution of multinational pharmaceutical, technology and other companies with operations in Ireland which have performed strongly amid the crisis and could benefit in the longer term from structural economic changes due to the pandemic.

Ireland is among the euro area member states with the greatest capacity to reverse the large debt build-up resulting from the crisis.

Comparatively resilient economic performance

Ireland’s comparatively resilient economic performance, with 3.4% growth in 2020 followed by a high QoQ of 7.8% in the first quarter of 2021, as well as robust growth expected after the crisis, yields to the government a substantial margin to consolidate the surplus budget deficits. We Upgraded Ireland’s sovereign credit ratings to AA- May 21, with Outlook revised to Stable.

The Irish government’s significant fiscal response to the global Covid-19 crisis – equivalent to € 38 billion or 18% of GNI * in 2020 and 2021 – will nonetheless see a budget deficit of around 9% of GNI * this year , about the same as last year. deficit of the year. The correction of Ireland’s budget then begins to take off more significantly from 2022.

A further modest increase in the public debt ratio in 2021, before medium-term reductions

Scope expects a further modest increase in the public debt ratio to 110% of GNI * (62% of GDP) this year, as government support to businesses and households remains in place during the early stages of the recovery economic. Public debt rose to nearly 106% of GNI * (60% of GDP) in 2020 against 95% in 2019 (57% of GDP).

As the recovery takes hold, our expectation of robust growth underpins a forecast of post-crisis public debt reduction: we estimate Ireland’s potential annual growth at 4% in terms of real GDP and at 3% according to a modified definition of real domestic demand. Output growth is expected to accelerate this year, growing at 5% in terms of GDP and 3% in the underlying economy.

Brexit has had a mixed impact on the Irish economy. The consequences of greater friction in trade between the UK and Ireland following Britain’s exit from the single market contrast with the windfall of Brexit for foreign direct investment in Ireland, the latter supporting real growth.

An improvement in the profile of the outstanding public debt

One constructive element is the improvement in the profile of Irish public debt. The official sector holds an increased share of public debt. Public sector loans represented 19% of Ireland’s outstanding debt at the end of 2020, including bailout loans from 2011 to 2013. Almost another 30% of outstanding debt is likely to be held on the balance sheet Eurosystem, after the ECB’s asset purchases, by the end of the year, further reducing the share of Irish taxable debt outstanding held by the private sector. The cost of servicing the debt has moderated, with 10-year financing rates of 0.2%.

Ireland’s National Treasury Management Agency took advantage of favorable borrowing conditions to extend the maturity of debt securities to a weighted average of 11.2 years at end-March, comparing favorably to an average of 7.1 years in the past. advanced economies. Since the start of the year, issues in 2021 have a longer average maturity of 14.6 years. Ireland has raised € 6.1 billion in sovereign green bonds since 2018.

The economy retains significant inherent vulnerabilities

Irish fiscal dynamics will improve over time after the crisis, but we must bear in mind that the economy retains significant inherent vulnerabilities to external and / or internal shocks, given the importance of multinational companies in the private sector, a very open economic structure, high public and private debt stocks and a considerable size of the financial system relative to the size of the real economy. The upcoming changes in international corporate tax policy pose a significant risk to Ireland’s economic comparative advantages.

For an overview of all of today’s economic events, check out our economic calendar.

Dennis Shen is Director of Sovereign and Public Sector Ratings at Scope Ratings GmbH.

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Saving Japan from fiscal collapse Sat, 05 Jun 2021 00:00:56 +0000

Japan’s budget for fiscal 2020 was formulated in December 2019 before COVID-19 hit and pandemic considerations could be taken into account. Spending is expected to reach 102.7 trillion yen ($ 939 billion) and the primary budget deficit-to-GDP ratio is expected to be 2.7 percent.

The government has set itself the objective of achieving a primary surplus in national and local administrations by 2025. These budgetary consolidation objectives were defined within the framework of the “Basic Policy on Economic Management and Reform and Budget 2018 ”.

The pandemic seemed to deprive Japan of the will to continue fiscal discipline. In 2020, the government developed three COVID-19 Supplementary Budgets, and as a result, spending swelled to 175.7 trillion yen (US $ 1.6 trillion). Yet unlike the UK and US – which have already started talks about future tax hikes – there is very little talk in Japan about fiscal consolidation. The lack of debate is problematic because Japan has the world’s worst public debt-to-GDP ratio.

There are three possible reasons why the debate on fiscal consolidation has not progressed in Japan. First, a lot of people don’t care about financial issues. A investigation on public finances and tax burdens revealed that the average rate of consumption tax that citizens considered desirable is changing by around 2 percent with and without a prior explanation of Japan’s fiscal position. The Japanese public seems to ignore the risks associated with debt and the need for fiscal consolidation.

Second, there is confusion about fiscal consolidation measures. The debate over Japan’s fiscal strategy is vast. Some argue that spending cuts are more effective than tax increases. Others propose to increase nominal incomes and nominal GDP by raising prices and stimulating economic growth to reduce real public debt. Raising taxes is another option, although it is unpopular.

The different approaches to reduce real public debt also creates divisions. One view suggests that economic growth increases through structural reforms on the supply side. Another perspective aims to achieve both higher prices and economic growth through monetary easing. Another approach suggests that the fiscal expenditure multiplier is large enough and that fiscal consolidation is possible if fiscal expenditure increases. This confusion prolongs the debate on fiscal consolidation in Japan, resulting in “Consolidation fatigue‘. The longer the period of fiscal consolidation, the greater the likelihood that the chosen fiscal consolidation measure will not be completed sufficiently.

Third, a consumption tax is unpopular with Japanese citizens. Given the shrinking working-age population in Japan and the global competition for corporate tax cuts, a consumption tax should be the last candidate to achieve fiscal consolidation. The regressiveness of the tax burden inherent in a consumption tax is likely to run counter to the maximize the welfare preferences of the Japanese public. A consumption tax hike is the most politically unpopular fiscal consolidation strategy, but remains one of the few remaining options.

Fiscal consolidation in Japan is quite a difficult task. But the consumption tax rate in Japan is still only 10 percent. This figure is low compared to other developed countries – Japan still has a tax room of around 10 percent to increase the consumption tax if the example of other developed countries were followed. A 5 percent increase could fully cover the average primary budget deficit to nominal GDP ratio generated over the past ten years.

Japan is extremely unlikely to face financial collapse short term. Whatever the political difficulty of fiscal consolidation, the government currently has levers to activate if the financial crisis becomes imminent. But the effectiveness of these levers may decrease in the long term. The aging of the Japanese population will continue to reduce fiscal space due to the rising cost of social security and the consequent increase in public debt. The aging process will also reduce the national savings rate, and given the current stagnant economic and fiscal situation in Japan, it is difficult for the Bank of Japan to escape its low interest rate policy.

These factors will lead to future economic turmoil without fiscal consolidation now. Low interest rates will mean that the Japanese economy will face a large domestic and foreign interest rate spread, and the resulting yen carry trade will cause the yen to depreciate. If the overseas holding rate of Japanese government bonds (JGBs) is high enough due to the shortage of domestic savings, combined with significant depreciation for foreign investors, the price of JGBs will collapse.

The Bank of Japan can avoid a sovereign default because it can buy and support JGBs, but this will inevitably lead to further depreciation of the yen. This depreciation will bring great upheavals to the economy through, for example, the rise in oil prices. If this happens in the middle of winter, it could affect the lives of the poor living in the northern regions more severely. Japan’s GDP will also decline in dollars. No one knows how big or small this fall will be, but it could mean that Japan will pull out of the developed world.

As time is running out to avert a fiscal catastrophe, the Japanese government must implement effective fiscal consolidation measures as soon as possible.

Keigo Kameda is Professor of Economics at the School of Policy Studies at Kwansei Gakuin University.

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How to Negotiate a Lower Interest Rate on Your Credit Cards Fri, 04 Jun 2021 19:00:17 +0000

Karolina Grabowska / Pexels

Credit card can be a convenient way to pay for things while mortgage and earn rewards. These advantages, however, can be seriously compromised by a high interest rate. Currently, the average credit card interest rate in the United States is 16.15%, according to At this rate, paying off a balance of $ 10,000 over four years would cost you $ 3,422 more.

An open secret in the industry is that credit card interest rates are negotiable. And we’ll tell you exactly how to do it.

What you should know first

Before you call your credit card company and start a negotiation, we recommend that you do some preparation beforehand.

Calculate your credit score

Some of the first things your credit card company will look at are your payment history and your credit score. You can order a free annual credit report to make sure it’s accurate and to see your payment history and debt-to-income ratio (DTI). Examination of the report – checking for late payments or other defaults – will give you an idea of ​​how assertive you can be when asking for a lower rate.

Read more: The best credit monitoring services

Collect competing offers

You will also want to research the rates offered by competing credit cards. (We recommend that you consult our best credit card lists to see the most competitive deals right now.) Save any pre-approval emails or postcards you receive, or search similar cards with lower prices to find out about other offers available. Coming into the conversation with ammunition of information will give you a stronger negotiating position.

How to ask your credit card provider for a lower interest rate

Once you feel ready to ask for a lower rate, negotiation can begin. Here are four steps you could take to negotiate a lower interest rate.

  1. Call your card provider: Contact your credit card issuer and explain why you want the interest rate reduced. You can start by highlighting your history with the company and mentioning your good credit or on-time payment history. Now is the time to mention the lower credit card rates that you have been offered or found in your research.

  2. Do not settle: The credit card company may initially decline your request or offer a minimum discount, but you don’t have to pay if the resolution doesn’t meet your expectations. You can always ask for more or an explanation of the decision. If you feel like you’re going nowhere on your first phone call, be diligent. Call back another time and try your luck with another representative or ask to speak to a manager and take your case to a higher authority.

  3. Request another benefit: If the company refuses to lower your interest rate, ask what else it could do to keep you as a customer; representatives may offer bonus points or additional incentives.

  4. Request a temporary tariff reduction: If you’re worried about paying off a balance with your current high interest rate, ask for a temporary stay, which may offer you a lower interest rate for a short time.

Alternatives to consider

If your credit card company isn’t giving you the discount you were hoping for, there are alternatives.

  1. Apply for a balance transfer credit card: A lot balance transfer cards have little or no introductory APR for a period of time, after which the APR will increase dramatically. But it might save you time. That said, balance transfer cards still charge a fee for debt transfer – typically between 3% and 5% – so make sure your potential savings outweigh the cost.

  2. Create a debt repayment plan: Start a budget (or tighten up your existing card) and make a plan to pay off your credit card debt faster. If you have multiple card balances, use the avalanche method by making the minimum payment on all cards – using the extra funds first to pay off the card with the highest interest rate. Go down until they’re all paid.

  3. Apply for a debt consolidation loan: A Personal loan can be a convenient way to pay off high interest credit card debt. In the case of a debt consolidation loan, you could consolidate the balances of several cards into one loan with a lower interest rate.

Best Advice: Avoid Credit Card Interest Completely

The best way to avoid high interest rates is to eliminate the interest payment in the first place. Get in the habit of paying off your credit card balance every month, so you never have to worry about your interest rate level. Sign up for automatic payments to pay off your balance in full each month or make payments every time you use your card.

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