If you have to ask if revolving debt or pay off your mortgage is better, your debt has become a problem in your life. You are wise to assess your situation, prioritize your debts and take care of the most important debts first. If you have too much debt, you can minimize the damage by taking the right approach.

 

Meaning Home Mortgage

 

If you miss a payment, it should not be your mortgage. If you stop paying your mortgage, you could lose your home. If you miss a payment, it is better to miss your payment by credit card then your mortgage payment.

 

Effects

 

Do not pay revolving debt, such as credit cards, do more damage to your credit report that do not pay installment loans such as your mortgage. If you want to prioritize your debt after you pay your mortgage, you must repay any credit cards that may help you save your credit. You are already taking a hit on your credit score due to lack of payment by credit card. You can at least reduce the extent of your score drop even more by keeping some available credit on your card.

 

Potential

 

If you decide to miss a payment by credit card, and if this is the first time you’ve done that, ask your lender to not report the missed payment to the Office of credit reports. If you’ve been a good customer, your lender might agree that it happens once.

 

Considerations

 

It is important to pay your mortgage each month, but do not make the mistake of trying to pay the mortgage off sooner than you owe. Your mortgage is usually the debt with an interest rate lower than the debt of your credit card. The interest you pay is tax deductible. Only pay for what you owe on your mortgage and not more.

 

Solution and Prevention

 

You can change your mortgage payment more affordable modification program. If you have trouble making your mortgage payment, you may be eligible. Typical reasons to qualify for a modification if your mortgage payment is increased or decreased your income if you suffered a recent strain. If you can reduce your monthly mortgage payment, you may be able to pay your mortgage and your revolving credit. You can also talk to a credit counselor.

 

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Credit ScoreIf your credit score needs a boost, you can rebuild it without professional help that you already know the report is the most important thing that affects your score. Learn what you can do today to improve your score? The repayment of your installment loans (mortgage, auto, student, etc.) can help your scores but typically not as dramatically as the repayment – or pay – revolving debt.

 

You can order a free copy of your report from credit bureaus. The Federal Trade Commission mandates that every person is entitled to one free credit report each year. If you have been refused for a loan or employment based on information in your credit report, you can request a free report after each impact.

 

How you can improve your credit score?

 

Credit scores fluctuate depending on how you manage your available credit. Measures to improve your score include:

 

• Pay your bills on time. The recent payment history is more important to potential creditors that payments several years ago. Maintain a timely strategy bill payment for at least six months to see an improvement in your credit score. The more your payments are on time, the higher your score will increase.

 

• Reduce your debt. This does not mean to go down the debt interest credit cards, it means to reduce or gain, existing revolving debt accounts.

 

• Reactivate an old credit card to improve your history. Credit history, or how long you have been using credit accounts, plays a role in the overall credit score. If you have an old account open without activity, chances are that the creditor is not reporting information to credit bureaus. The longer you have been using credit responsibly, the more worthy than you seem.

 

• Use more than one type of credit account. A combination of loans (car payments) and revolving debt accounts show your ability to handle different types of credit.

 

• Stop the demand for loans. New credit inquiries (hard pulls) may have an impact on your credit score. Traction pulls is when a potential creditor evaluates your credit report for a loan and, in some cases, a savings account. Pulls hard remain on your credit report and can lower your credit score by five points for a maximum of six months. Soft pulls do not affect your credit score card solicitations and certain mortgage pre-approvals are examples of soft inquiries.

 

 

 

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Paid DebtAs in all areas of personal finance, have a plan automating our process makes things easier. This automation leads to an assured wealth. Today I want to show you the plan I put in place when I want to pay my debts.

A very simple plan to pay revolving debts; be on autopilot mode moves us forward in small steps, but we moved forward anyway. So we can put aside our emotions and achieve our financial goals more easily.

 

A good plan to repay debts

 

I’ll show you a method.  Nicknamed “the pyramid levels”; It is in fact paying the minimum due on each of your debts. And by paying the minimum, you will have a surplus of money at the end of the month. This surplus, you must apply it to the debt interest with high rates.

 

You understand that the most expensive debt will quickly disappear. Once this debt eliminated, you start the ride. All amounts that you use to pay off that debt with high rates must now be paid to the second debt with the highest rate, while maintaining the minimum payment on the other debts.

 

By dint of applying the method of the pyramid levels, you will have less interest to pay on your debt while eliminating debts one by one … until you no longer have any debt.

 

My method of pyramid levels requires patience because the “number” of debt in your possession will fall slowly, since you spend most of your savings to pay off a large debt. So, you can reduce your payments, but not the number of your debts. By cons, it is the most profitable in the long run because you will save many interest payments.

So if you want to reduce the number of your debts to encourage you to persevere, a variant of methods can be applied.

 

In fact, you perform the same trick on the minimum refund of your payments on each of your debts, but you use your surplus to the debt with the lowest amount, instead of the highest interest rates. Therefore, this debt will disappear quickly … and you have a debt to pay less. Thereafter, you are reusing this debt for other debt to pay the lowest, etc…

One way or another; the important thing is to pay its debts automatically.

That is the explanation of the pyramid rates method. Like what, have a good plan automating personal finances can enrich us long term.

 

 

 

 

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When we talk about ways to build credit; it’s the opportunity to discuss the advantages and disadvantages of using a line of credit.

 

Advantage 1: Flexibility of access Line Of Credit

 

A line of credit is a way of borrowing which is very flexible. It provides the money you need, when you need it. Its real benefit comes when we do not know exactly how much money you want, or when we will really need. This is actually the money that is available at all times, “just in case”. In this way, you pay interest on the borrowed funds only when it is used.

Margin differs significantly from a traditional loan where you stop paying interest only when the loan is repaid in full after the agreed period of time.

 

In the case where you would need cash, you can also withdraw funds directly to the ATM. This option is more advantageous than using a credit card.

 

Advantage 2: Flexible repayment

 

You can choose to pay more during the month, without limitation or penalty. Obviously you can imagine this is really an intention. This debt will melt like snow in the sun!

 

Advantage 3: No fee

 

The money is available, and margin costs nothing until you do not use it. It pays to use, and you only pay interest charges.

 

Obviously each has its downside. Let’s talk about disadvantages. The line of credit has the defects of its benefits, and more. If you do not know how to use or how to manage it, you can easily fall into large traps and get to live on credit. After all, there is the word “credit” in its name, it should awaken instincts! As in everything, or almost, you must exercise discipline and common sense when you decide to use its margin.

 

Disadvantage 1: Ease of access

 

Yes, this problem is very close to advantage 1 cited above. One can easily fall into the trap and use its line of credit to “supplement his income.” The problem is that very soon we find ourselves living beyond our means.

 

We should not use a line of credit when the situation lends itself really. The line of credit is used optimally when it is not known how much money will be needed and when. This can be very dangerous because almost all impulsive spending can fit in this category! It must therefore be wary. Some use their line of credit as an emergency fund.

 

Disadvantage 2: Variable interest rate, unsecured

 

With a line of credit, the interest rate is not guaranteed, unlike a conventional loan where the interest rate is fixed and where we know in advance the amount of reimbursement. In many ways, we can simply “forget” a traditional loan once it has incorporated in its repayments to financial routine. With a line of credit it depends on its bank. It can change the rate at its discretion, it is sufficient to notify you by letter one month in advance.

 

Disadvantage 3: Far flexible repayment

 

It overlaps with the advantage number 2, but be aware that without discipline it is easy to get into debt quickly and without realizing it. With a line of credit we may decide to pay the interest on debt, and therefore not to repay the principal.

 

Pay only the interest on margin can lead to very dangerous situations. Margin account may increase slowly to cap credit limit. With a line of credit; it is essential to make regular repayments of capital in order to avoid financial problems.

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  • Before making a loan application, order a copy of your credit report and make sure there are no errors. If so, please correct them. A well prepared application, reasonable from the point of view of the credit limit requested and discussed with the agent of your financial institution prior to limit the chances of rejection and avoid a negative note attached to a refusal. Credit bureaus handle millions of transactions per year and errors do frequently.

 

  • Avoid multiple requests for credit from creditors. Refusals are very harmful to your score.Credit Score

 

  • Before meeting with your financial institution, calculate your own debt ratio if it is too high (more than 40%, you may well be refused) and thus negatively affect your score.

 

  • Do not pay your accounts late. Regardless of the amount outstanding is high or not, a delay is a delay.

 

  • Keep your credit card balances and lines of credit low (ideally 25% or less of the balance allowed). This is the percentage that increases your score the most. From 25% to 50%; it increases but less. If your balance is more than 50% of the limit, it negatively affects your score.

 

  • Accounts (credit cards / line of credit / loan) old open accounts are “paying” for your score than newly opened accounts. Keep them open, if possible.

 

  • If you need to reduce your revolving debt, always start first by reducing the amount owed on your credit cards for two reasons: They typically cost you more expensive in interest than other loans and further increase your score if you reduce your auto loan or your mortgage.

 

  • Be wary of ads that promise to repair your credit quickly. Costs that will be required are often very high and there is no magic solution. As for injuries, time and patience are the best remedies to win the trust of your new creditors.

 

  • Apart from the secured credit card, in the first two years of your bankruptcy, avoid loan application to financial institutions that were included in your bankruptcy or proposal. Given their loss, they will be less willing to give you credit again.

 

  • Avoid the traps of revolving debt. You have learned to live without credit for your bankruptcy or proposal. Of course, you’ll need when you change your car or if you buy a house, but keep your borrowing capacity for that rather than for furniture, travel etc… !

 

  • Remember that it is not because a financial institution offers you the revolving debt you must accept it.

 

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Money To Finance Your NeedsWith a revolving debt you finance all types of expenditures without evidence. After validating your file and open your credit, borrowed money is available in the form of payment to your account within 48 hours (after the expiration of the withdrawal period in force).

 

A revolving debt is a loan available for one year tacitly renewable. This revolving loan can have a liquidity facility between 500 dollars and 4500 dollars throughout the year and it is renewable at the end of each year.

 

It is advisable to opt for formula revolving debt to finance various expenditures amounting undefined. The money can be allocated to all expenses desired by the user: no proof of purchase or quotation is requested.

 

A revolving credit can be used both to fund current spending (autumn, decorating clothes, etc…) to fund a passion (sports) or trip.

 

The formula allows you to manage payments and loans to finance only those needs.

 

Revolving debt: flexibility and transparency

 

  • You get a service “pause” that allows you to suspend your payments for a month each year.

 

  • You receive a monthly statement that informs you of the cost of the debt and interest rate applied to your loan,

 

  • You choose at your convenience sampling date reimbursements,

 

  • You can increase the amount of your repayments without charge to shorten the duration of debt,

 

  • Once the line of credit, you pay no interest on the money that you do not use.

 

Revolving debt: Refunds and credit costs

 

After validating your file, the revolving loan offers flexibility of use: it can borrow money available throughout the year and get the desired payment within 48 hours, subject to outstanding stock.

 

You repay your loan according to a schedule established minimum monthly payments in advance. With your repayments, you rebuild the credit every month. In general, when you pay quickly; the cost of credit is reduced.

 

Rates and the cost of revolving debt vary depending on amount borrowed and the amounts remaining to pay, on a scale that is given to you at the time of signing the credit.

 

Throughout the year, you can manage your account, and focus on your repayments and borrowings, taking an appointment with a financial advisor.

 

 

 

 

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Clearly identify your needs Personal Loan

 

Before comparing the proposed credit available on the market, the potential borrower must first clearly identify the use of the money that he wants to receive:

 

  • If this amount is used to finance a project defined as a renovation of apartment, buying a car or a trip, he may turn to the “traditional personal loan”.

 

  • If this money can be used in a non-defined or for multiple expenses, then it is best that he turned to the “revolving debt”.

 

The flexibility of the revolving debt

 

Revolving debt (formerly called reserve money or credit reserve) allows the borrower to have a sum of money or loan available that can be used without proof of use. It is a credit available against which he may draw without proof of use, subject to sufficient credit and subject to acceptance of the application. As he does not use it, it costs him nothing. If he uses all or part of this amount, he must repay the amount in installments also defined at the outset. This revolving debt reconstitutes gradually, that is why this type of loan is also called credit rebuild.

 

It is possible to use the Revolving debt: purchases of consumer, small amounts, specific occasions (back to school, holidays), hardware, decorative items, pay rent, etc…

 

Classic Personal Loan

 

To know exactly what you are going to pay if the proposed purchase is determined as the purchase of a vehicle, a kitchen, a home theater, etc.., it is better opt for personal loans. And for even more security, choose the traditional loans, which allow in some cases to cancel the sale if the borrower does not receive funding.

 

In summary, if you have a defined project, opt for classic personal loan, if you do not yet know how the purchase will affect money or if you just want to have an amount available “just in case”, choose revolving debt.

 

Finally, once the choice has been made between one and the other possibility, when credit is in progress, there remains the possibility for the borrower, if he wishes to renegotiate its loans.

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Here are five ways to pay your mortgage and other debts faster

 

Accelerate Your PaymentsClimb Out Of Debt

 

If your mortgage allows you to make additional payments, consider applying your annual performance bonus, your tax refund or your gift money to pay your capital. Better yet, plan a few extra mortgage payments right from your payment schedule. A simple solution that payments every two weeks instead of every month you will shorten the repayment of your loan by several years.

 

Pay Your Debts First

 

You wonder if you should put money aside or pay off your mortgage? Here’s what you need to know: If your mortgage comes with an interest rate of 5%, the refund will be equal to a yield of 5% for your money. Your gains will be even more significant if you pay off the balance on your credit card interest rates. In most cases, you will receive a guaranteed return of 19%.

 

Reduce Your Expenses

 

Looking for ways to reduce your household budget and use the savings to pay down your mortgage and other debts. Start by slashing expenditure on luxuries. The few hundred dollars you save on restaurant bills, clothing, haircuts, manicures and the trips will give you a significant boost to reduce your debt.

 

Adjust Your High Debt Rate

 

If you have accumulated a long-term debt combined with a high rate of interest, for example a large balance on your credit card, your priority should be to repay. Consider obtaining a line of credit with a low interest rate to pay off your debt at high rate.

 

Require a Better Rate

 

Call the company that issued your credit card to negotiate a lower interest rate. Once you have liquidated the balance on your card, be sure to use the savings to make additional payments on your mortgage.

 

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The repayment of revolving debt Paid Debt

 

When you use your line of credit, a sample is taken from your bank account each month until the reserve is fully restored.

 

The amount of the monthly payment is contractually fixed, but some banks allow modulations. The monthly payment is used both to repay the borrowed capital – and thus replenish the reserve – to pay the insurance premium in time, and to pay the interest due for the month.

 

The level of the monthly must be set at a level high enough so that the loan repayment is made on a reasonable time. If the amount of credit used – that is to say, the outstanding balance after the last operation – is less than or equal to a determinate amount, the repayment shall be made in a number of years; it’s depend on the amount borrowed.

 

Each month you will receive a specifying account statement:

 

– The closing date of the statement and the date of payment;

 

– The fraction of available capital;

 

– The amount of maturity, the part corresponding to the interest;

 

– The rate of the period;

 

– Where appropriate, the costs of assurance;

 

– The total amount due;

 

– The amount of payments already made since the last renewal, highlighting the share paid on capital borrowed and that paid in interest and miscellaneous fees related to the credit transaction;

 

– The possibility for the borrower at any time to reduce its credit reserve, the suspension of the right to use or termination of the contract;

 

– The fact that at any time, the borrower can pay cash for all or part of the outstanding amount, without limiting the amount of one final installment;

 

– Estimating the number of months remaining due to reach to a full refund of the amount actually borrowed estimate prepared in accordance with the agreed repayment terms.

 

Despite all this information, it is difficult for the customer to verify the correct amount of interest, which is calculated daily and the closing dates do not necessarily coincide with the dates of collection of monthly payments. More, which complicates things further, each credit institution has its own method of calculation of interest. Do not hesitate to contact the lender if you have a question or if you do not understand any of the information on your statement.

 

Finally, remember that you can perform a prepayment at any time of your revolving debt, at least equal to three times the amount of your monthly payment. No fees or penalties may be requested at this time.

 

 

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Revolving debt Man Holding Credit Cards

 

Revolving debt will be (even) more framed. It will be recalled that the law intended to prohibit. This proposal was not discussed, but it demonstrates the distrust government to carry this type of credit. The main provisions of these guidelines are:

 

Revolving Debt Object

When the consumer is offered a revolving debt at the point of sale or through a means of distance selling (internet, phone, mail…) for the acquisition of a good or service, and if the credit amount is greater than a fixed threshold, the consumer must be able to conclude a credit agreement depreciable instead of a revolving debt agreement.

 

Obligation to study the enhanced solvency

 

In the case of revolving debt, the lender must

  • Every three years, check the creditworthiness of the borrower in the conditions for the granting of new credit (from verification of sufficient information, including information provided by the borrower to the lender’s request).

 

Distance selling of revolving credit

 

In the case of distance selling (mail, telephone, Internet, …) or in case of credit extended to the point of sale (through intermediaries) if a credit agreement to finance the purchase of goods or services particular service is offered for an amount greater than a threshold set, the lender or intermediary must offer the borrower the option of purchasing a credit agreement depreciable instead of a revolving credit agreement.

 

Minimum capital repayment by maturity

 

In the case of a renewable contract, each payment must include a minimum repayment of borrowed capital, which varies according to the total amount of credit granted.

 

Non-use of credit

 

Today, when the revolving credit or bank card associated is not used for three years, the lender must, at the renewal of the contract, send a separate document containing a number of mandatory (amount available, amount of repayment in installments).

 

 

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