Since all of us are not born with a silver spoon in our mouth, we need to arrange for finances. However, the resources may not be sufficient to meet the present or expected expenses. This is when most of us revert to financial assistance from lending agencies in the form of loans. A loan is neither good nor bad and its overall impact is neutral. But it is the way in which it is handled that makes it good or bad for out financial credibility.
Let us understand with the help of an example. Suppose, there are two individuals A and B, with the same income. 'A' has sound financial knowledge and handles his financial affairs in a decent manner while 'B' is just interested in earning and spending his income and has no financial knowledge. Both of them take loan of an equal amount with equal EMIs of equal loan tenure with an assumption that there is no change in the income or other conditions. 'A' is able to manage his affairs and does not allow the loan EMIs to negatively i mpact his credibility and credit rating. 'B', on the other hand, is unable to manage his affairs and therefore finding it hard to neutralise the impact of the loan EMIs on his credibility and take additional loans to meet the already existent loan EMIs. After the end of the loan tenure, 'A' will be back to a normal life with no debt while 'B' will still be struggling with his affairs and will be burdened with his loans for longer time duration.
If you feel that you are in a position like 'A', then a loan is a perfect solution for you. But if you are in a position like 'B', then you have no option but to take the help of the debt management services to provide an effective solution to your debt loans.
The debt management services can offer you valuable financial counselling by acting as a single point of contact. It will also negotiate with all of your creditors so that the amount owed by you can be reduced to a minimal amount excluding payment arrears and penalti es. Moreover, all the owed debt will be consolidated in a single loan , known as a "consolidation loan". The consolidation loans help you to make a single payment rather than the individual payments to individual creditors.
An agency which specialises in the debt management services receives commission from the creditors. This commission is decided by a percentage of the monthly payments or additional rebates. These agencies usually deal with the unsecured debts.
The consolidation loans do not negatively impact your financial credibility or credit rating if you are the making a regular payment of the consolidated single payment. Since all the debts are organised in a single debt, the debts are easier to be organised. Moreover, the debt is reduced to a significant level with the help of the debt management services.
For more information about loans: Commercial loan rates [http://www.shakespearefinance.co.uk/commercial-loans.html], clear your debts [http://www.shakespearefinance.co.uk/articles/how-avoid-pitfalls-clearing-debt...]
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