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Business firms often sell goods on credit to facilitate sales. It is valuable to customers as it augments their resources, and it is particularly appealing to customers who cannot borrow from other sources or find it very expensive or cumbersome to do so.

The credit period extended by business firms usually ranges from 15 days to 45 days. When goods are sold on credit, finished goods get converted (from the point of view of the selling firm) into receivables (book debts). Receivables, when realized, generate cash.

The important dimensions of a firm’s credit policy are credit standards, credit period, cash discount and collection effort. These variables are related and have a bearing on the level of sales, bad debt loss, discounts taken by customers, and collection expenses.

A pivotal question in the credit policy of a firm is: What standard should be applied in accepting or rejecting an account for credit granting? A firm has a wide range of choice in this respect. At one end of the spectrum, it may decide not to extend credit to any customer, however strong his credit rating may be. At the other end, it may decide to grant credit to all customers irrespective of their credit rating.

In general, liberal credit standards tend to push sales up by attracting more customers. This is, however, accompanied by a higher incidence of bad debt loss, a larger investment in receivables and a higher cost of collection. Stiff credit standards have opposite effects. They tend to depress sales, reduce the incidence of bad debt loss, decrease the investment in receivables and lower the collection cost. Firms generally offer cash discounts to induce customers to make prompt payments. The percentage discount and the period during which it is available are reflected in the credit terms.

Bad Credit Debt Consolidation Loans

Sometimes individuals having large multiple debts may find it difficult to meet their payment obligations. The debt repayment may arise from credit card bills, bills from department stores, and medical bills. In cases like this, many seek the assistance of a finance company to consolidate their debt with a debt consolidation loan. The objective is to pay off all the debts carrying a high interest rate with a single loan obtained from a finance company offering a lower interest rate. Once the debts are paid off, an individual deals with one single loan amount with a low interest rate.

Debt consolidation loans may be secured or unsecured loans. An individual who owns a house or property may apply for a secured loan or a home equity loan. Secured loans get a quicker sanction and fees are negligible. Personal loans or unsecured loans are processed on the basis of an individual’s credit ratings and past and present earnings. To qualify for a loan, the local bank or finance company may ask for a monthly income and expenditure statement, an assurance of a steady income, a co-signer and a collateral security.

Debt consolidation loans have a number of advantages. Finance companies offer loans with a lower rate of interest, and the loans are spread over a longer period of time. This results in lower expenses and a manageable monthly repayment of the loan. Debt consolidation loans help to repay the debt without much negative impact on the credit rating of an individual. The interest paid on a debt consolidation loan is eligible for tax deductions. More importantly, there is only a single creditor an individual has to deal rather than several creditors.

Debt consolidation loans also have a negative side. Depending upon the nature of consolidated loan, an individual may end up paying more than his existing debt in terms of higher interest and longer period of repayment. Obtaining loan to pay off credit may sometimes result in classifying an individual as a credit risk.

Before finalizing, it is important to consider some aspects of the loan. Some organization offer fixed or an adjustable rate of interest. Adjustable rates starts with lower rates. Fixed rate ensure that the payment do not change. Also, the terms of payment are shorter or longer. Longer period of repayment increases the total cost of the loan.

An individual should weigh all the pros and cons before seeking debt consolidation loans. The options offered by lenders, the impact of loan on the credit rating, cost of the loan, and the consequences of missing a payment are some of the aspects that require careful consideration.

Bad Credit Debt Consolidation Help

It is very likely that many individuals may face unmanageable debts owing to unpaid credit card bills, medical bills and department store bills. A financial crisis of this nature calls for immediate remedial measures to keep the debts under manageable limits. An individual facing such a situation can seek help through a reputable credit counselor, obtain a debt consolidation loan, enroll in a debt consolidation service or declare bankruptcy.

Credit Counseling

Reputable credit counseling organizations offer non-biased advice on debt management. They have certified counselors who help individuals manage their money and debts. They discuss the financial situations in detail and suggest the best plan suited to an individual.

Debt Consolidation Loan

An individual can lower his debt burden by consolidating all the debts and repaying with a debt consolidation loan. Obtaining a debt consolidation loan allows an individual to deal with only one creditor and a single lower monthly installment. The loan can be secured or unsecured. Secured loans can be had in the form of home equity loans or by providing one’s property as a collateral security. Unsecured loans are personal loans that are given on the basis of an individual’s credit standing and his income history. Before finalizing the loan, an individual must consider the cost of consolidation of loans and its impact on his/her credit ratings.

Debt Consolidation Services

Debt consolidation services also called debt management plans involve restructuring debts in a way that can be comfortably managed by an individual. The debt management company negotiates with the creditors to reduce the interest rate or waive certain fees. Thus, the debt burden is lower, as well as the monthly expenses of the customer. The debt management company charges fees and commissions for their service.

Bankruptcy

Bankruptcy is the last measure for people who cannot fulfill their payment obligations. People who declare bankruptcy are discharged of their debts by the order of the court. The consequences of declaring bankruptcy are far reaching, as it checks an individual’s ability to obtain any credit for 10 years. An individual has to file in a federal bankruptcy court personal bankruptcy: chapter 7 or chapter 13.

Bad Credit Debt Consolidation Advice

Depending upon the financial situation, the level of debt and the future prospects, every individual in personal debt may require a different approach to the debt repayment. An individual will have to choose a debt repayment plan that is best suited to his/her present financial situation.

There are various programs available and choosing the right solution to debt problems may be difficult for some. It is better to take professional advice from reputable credit counseling organizations. These organizations have trained professionals or certified credit counselors who are experts in the field of consumer credit and debt management.

Credit counselors first study the current financial situation of the customer. After understanding the payment abilities, the customers are given various options of managing money and debts. Each option is discussed along with their pros and cons. A debt management program is then developed and a plan is worked for the customer to follow.

Selecting a reputed credit counseling organization is important. A legitimate organization charges a flat fee per month or a small fee on every individual debt account handled. Their counselors study the financial situation thoroughly and educate the customers on budgeting and money management skills before suggesting or enrolling them in any debt management program.

Any credit counseling organization asking for financial data before sending information about their services should be avoided. The customers should insist that the credit counselor takes all the necessary steps to minimize the damage to their credit standing.

Credit counselors normally offer their services through the Internet or on telephones. Some counselors offer in person counseling. Financial institutions, credit unions, U.S. Cooperative Extension Service, local consumer protection agencies and many universities offer credit-counseling services on a non-profit basis.

Bad Credit Credit Cards

For someone who never had the responsibility in stewardship of financial matters, a credit card seems like a dream come true. Possessing a credit card allows the user to make transactions in the absence of physical money. But the dream can easily become a nightmare if the credit card holder does not have enough money to pay for the monthly dues.

The common mistake of credit card holders is to make purchases beyond their financial capacity. They use the credit card indiscriminately without properly monitoring the charges made to the credit card. As a result, the dues eventually accumulate to an amount that the card owner can no longer afford.

Charges

Although credit card billing statements include a minimum amount due in the event that the card holder cannot afford to pay the whole amount, there are interest charges that would apply. Either the card owner is uninformed or do not have a clear amount of the interest fee, but even after paying for the minimum amount required for payment, interest rates are charged to the whole amount due for the month and not just the balance. Meaning if the bill for the month is $151.00 and the minimum amount due is $100, even after paying for the $100, but because the whole amount was not paid, the interest fee is applied on the whole $151.00 not just the remaining $51.00. Some banks charge as high as 30% in late charges.

Credit cards has corresponding credit limit. In the event that usage has exceeded the limit allowable, there are also corresponding charges that would apply.

Eventually, if the credit card holder maintains only the minimum amount due, the credit can bloat out of proportion making the credit much harder to pay in the end. The person would end up paying for the interests rather than the actual amount that was owed.

After unable to pay the balance on a regular basis, credit records would eventually be sent to a regulating body keeping track of people with bad credits.

Bad Credit Consolidation Loans

Attempting to get a loan saddled with bad credit can be a particularly tough experience. Though bad credit does hamper one’s chances of getting a loan that comes packaged with a perfect interest rate, there is still f hope.

Just like any other loan, in order to obtain a loan that will allow consolidation of debt into one single payment, you must first qualify for the loan. This may be easier for homeowners, who can get an equity loan using the equity of the house, or opt for a loan that is a certain amount over and above the appraised value of the house. However, there are consolidation loans available for those whose credit scores are less than perfect, those with credit blemishes, late payment history, bankruptcy, low income and for people who are non-homeowners or renters.

When it comes to bad credit consolidation loans, the interest rate plays an important role. The lower the credit score of the borrower, the greater the risk assumed by the lender in loaning the money. To offset this risk, lenders charge higher interest rates for people with poor credit scores. This interest rate is usually connected in some way to the prime lending rate, often about 2 to 3 percentage points higher. When applying for a bad credit consolidation loan, the wisest option is to shop around before coming to a decision, since interest rates vary widely from lender to lender.

Whether a bad credit consolidation loan actually helps is often determined by the actual terms of the loan. The loan could be a fixed interest rate loan or a variable interest rate loan, the term can be anywhere from 10 to 20 years, etc. One obvious benefit of these loans is that they help the debtor pay lower monthly payments besides having to make only one payment each month.

Bad Credit College Loans

Your bad credit rating need not stop you from putting your finances back on track and getting the best refinancing deals, such as college-loan consolidation. Yes, even with less-than-perfect credit, many companies are willing to help you simplify your college loan repayment terms and enjoy lower interest rates

Consolidation can work wonders in getting your finances back on track. By combining all your loans and paying them with from your different creditors, loan consolidation companies simplify your payment terms so that you only have to deal with one creditor (them) and one interest rate. And because you now only have one creditor, your overall FICO credit rating significantly improves.

With consolidation, you can decrease your monthly payables by as much as fifty percent by extending the standard repayment plan to up to thirty years, so that you can slowly rebuild your credit. Interest rates imposed by consolidation companies are now as low as ever – and even with bad credit, you can qualify for as low as 3.50%!

Before you apply, it is best to personally talk to representatives from consolidation companies in order to get answers to your specific questions, such as how much you can actually save monthly, deference and forbearance terms, and special conditions for individuals with bad credit.

Be prepared with a list of your concerns and demand straight facts, not sugarcoated marketing statements. It is a good idea to ask for a detailed payment schedule before you sign up for anything. Finally, compare the terms and conditions imposed by different consolidation companies until you arrive at the best one.

Remember that college loan consolidation should help you manage your debt and avoid loan default, not make your life even harder. Do not immediately sign up for consolidation if you do not know how it works and what implications it has on your long-term financial health. Consult several experts before making a decision

Bad Credit Bank Accounts

Bad credit bank accounts are perfect for those who have a poor credit history, have been bankrupt, or have a county court judgment registered against them. This helps them to repair their credit history without being caught in a fraud net. For the best services with a bad credit bank account, people should check the policies of the banks because different banks have different policies regarding bad credit bank accounts.

Repairing credit history is the first step to getting back into business. With careful planning and skilled help and patience, it can be done. It is very important to know what is owed and to whom. Current copies of credit reports should be obtained from all major credit bureaus. People should check the accuracy of the information provided in these reports to avoid further inconvenience. Paying bills on time to upgrade credit is also advisable, as is assessing the credit situation regularly to avoid any mistakes. Consolidating debt by paying minimum amounts.

People should maintain their credit accounts so that they can use credit when in financial need. They should go for a secured bank credit card that is backed by money deposited in a bank account while reducing the number of credit cards they have.

It is advisable to always pay the minimum dues on credit cards and get a copy of a credit report yearly to catch any errors. People should avoid things that can limit their credit such as high balances on credit cards, too many applications for credit, and low credit scores.

Bad Credit Auto Refinancing

Contrary to what you might think, your bad credit does not disqualify you from auto refinancing. In fact, auto loans may be the easiest to secure even after bankruptcy. Read on to know more about auto refinancing, how it can help you, and whether you should apply for it.

Auto refinancing works much like mortgage refinancing x96 ideally, a new lender who offers a lower annual percentage rate (APR) gives you money to pay off your current car loan. Your loan is therefore transferred to and restructured by the new lender. Your monthly payment should become significantly smaller, and in some cases even the interest drops. Some people are able to pay off the loan faster because of these incentives.

Auto refinancing became popular in 2001, when many consumers learned to take advantage of the flexibility that the scheme offers. Auto refinancing companies have since been competing with each other, slashing interest rates (as low as 6 percent) and offering better terms of payment. Auto refinancing is good not only for people with bad credit x96 the majority of people who avail of it have good credit scores, but would like to bend their car payment method to their advantage.

Getting back to financial stability is ultimately dependent on how you manage your cash flow, and while securing an auto refinance loan will not solve all your problems, it will certainly ease your burden. Auto refinancing lowers the monthly payments you have to make for your car, so you can use the extra money to pay high-interest loans like credit card loans, or to start building your savings account again. And because you get to keep your car, you can continue using it productively. Whether it’s to go to and from work or take your kids to soccer practice, you can afford the convenience of mobility even when you have bad credit.

The decision to apply for auto refinancing is up to you. If you decide to restructure your auto loan, though, do not hurry. Take time to shop around and see which lender can provide you the best rates. If you can, you should arrange a meeting with financial counselors (most lenders give this service for free) and compare notes.

Bad Credit Auto Refinance

Bad credit auto refinancing is a relatively easy process. There is still a large possibility for getting auto refinances even when the applicant has a bad credit standing. In the end, the results may be as beneficial as a good credit auto refinance.

The idea of providing auto refinancing even to those with bad credit standing came with the lenders’ realization that the reasons for having such a credit standing are oftentimes out of control. But this is not to say that all lenders no longer filter who among the applicants with bad credit standing are eligible for auto loan refinancing. Depending on the history they have gathered regarding the applicant with a bad credit standing, lenders may choose to deny or approve the auto loan refinancing. The information they collect usually includes the financial history of the applicant. They also analyze trends of both national and international financial records to determine the types of reasons that make certain applicants incapable of paying of their bills. All these information are accumulated to rate each applicant; the scores given to them will determine their eligibility for auto refinancing.

For applicants with bad credit standing, it is advisable not to open new or close existing accounts. This could be counted as a demerit and could disqualify them from getting an auto loan refinancing. It would be better to focus on spreading the debts across these accounts or eliminating a fraction of these debts. It would also be better to determine their car’s value. This way, it would be easier for them to gauge if the auto refinance benefits they could get are really worth it. To ensure that they will still get the best offer despite their bad credit standing, it would also help to research available lenders. While the applicant’s current lender may be open to refinancing their auto loan, there may still be other lenders who can offer better deals. The criteria should be a lender that can give the lowest interest rates while refinancing the smallest amount possible. The optimum combination of these two conditions can result to the lowest monthly payments for the applicant.