Frequently Asked Questions

Q. I have spent beyond my affordability and cannot manage my debts. What should I do to manage my wayward finances?

A. Don't sit brooding too much and doing nothing. Immediately consult your friend, family members and, if possible, a financial expert. Remember! You cannot get rid of debt by yourself. You have to proceed under the guidance of a consultant.

Q. Should I talk to my lender?

A. Yes, you should talk to your lender. A number of lenders are sympathetic to borrowers; you should ask them to suggest a company that arranges debt management and consolidation plans. All finance companies are willing to arrange debt managers so that borrowers can pay back their loans.

Q. Is a debt consolidation loan better than a conventional loan?

A. Yes! Debt management is always better than a loan. Going for another loan to pay back an old loan can be suicidal and should be avoided at all costs.

Q. How does a debt program work?

A. If you find a mismatch between your income and expenditures due to heavy expenses on shopping and other type of outgoing bills, companies arranging debt management take care of your outgoing bills and ask you to make out a single cheque every month. You save a substantial amount of money as you have a chance for fee waivers also.

Q. Should I take a consolidation loan?

A. Debt consolidation loans can be helpful in the settlement of the debts; but even these can damage your finances further if you default on payments and do not control your finances. The proposal is that debts settlement will be simpler if they are "consolidated" into one payment. This may seem like a dream to the debt-weary, but debt counsellors advise people to take them with caution. The interest rates charged on these loans are normally higher. They often come with payment protection insurance with unfair terms which may not cover you if you fall ill or are made redundant. They also tend to be "secured" loans. This means that if you are unable to keep up repayments you will lose the roof over your head.

Q. What bills should I prioritise?

A. Debt experts counsel people to prioritise repayments on essential services such as mortgages and utility bills. If you are paying off a range of credit cards and store cards, you should pay off those with the highest rate of interest first. You could also switch your balance to a credit card that charges a lower rate of interest.

Q. Should I consider a debt management program?

A. Yes, you should certainly consider a debt management program- loans or mortgages. We at Easy-Debt-Consolidations negotiate on your behalf to help reduce your outgoing payments. We also ensure strict compliance of our commitment to confidentiality in your deal.

Q. How can I determine if a debt consolidation loan is right for me?

A. You have to start by understanding what a debt consolidation loan is and how it fits into solving your personal debt situation. If you find it difficult to do this yourself, then there are companies that undertake this task for you and suggest the best deal.

Q. Is there any legal difference between a debt consolidation loan and a home equity loan?

A. Not in most cases. A debt consolidation loan in legal parlance generally does not differ in any way from what one might call a home equity loan or a second mortgage loan. However, the way in which a debt consolidation loan provider functions may differentiate the home equity loans from them.

Q. Are debt consolidation loans tax-deductible?

A. In some cases, depending on the cost o your home, the interest portions may be tax-deductible. Potential borrowers should check with their tax advisors to explore what portion, if any, would be tax-deductible for them.

Q. If things get better, can I pay off a debt consolidation loan early?

A. In most cases there is no prepayment penalty with these loans, but read your documents carefully. Some loans will indeed penalise you with an extra-pre-payment fee if you pay the loan early.