Lending Resource

Managing Over $10000 In Debt

Debt management is something that everyone must practice, yet many overlook. This is especially important when your unsecured debts have exceeded the $10,000.00 mark. Many statistics have shown that this key level of debt can signal financial success or failure. Managing your debt is crucial to financial independence and can be accomplished quite simply.

Debt Management

First Steps To Debt Management

As everyone is well aware, credit scores play a very significant role in debt and debt management. Borrowing money, either secured or unsecured, becomes more expensive when scores are low. Managing your credit score so that it remains high is your first step to money management.

Credit scores are affected by high balances on credit card debt, late bill payments, and charged off debt. All credit card balances should never exceed the range between 50 and 60% of the available credit. Credit card utilization should ideally be much lower in the 0 to 20% range.

Bill payments should be placed on auto-pay for monthly payments, and scheduled two days prior to the due date. Never schedule a payment for the due date, processing errors can cause the payment to be late. Applications for new credit should be limited to no more than two applications in any 30 day period.

Next Step For Debt Management

If you have high interest credit cards with large balances, you need to pay these cards down or off first. Utilize low interest balance transfers to other credit cards, home equity lines of credit or personal loans to take care of these debts. When you are making minimum payments on high interest credit cards you are, in a way, paying for nothing. These cards are designed to take as long as a mortgage to pay off, something many consumers do not realize.

Final Step For Debt Management

Once you have began paying down your debt you must commit to keep your spending under control. Many people will follow through with the first two steps of debt management only to charge-up the high interest credit cards again.

Debt management is a three step process. You must keep a good credit score to reduce borrowing costs, you must reduce high interest debt and you must control spending. If you are able to do this, your debt, regardless of size, will be manageable.

Preparing For a Loan Interview

Preparing for loan interviews can be a nerve-wracking experience. However, if you know what to expect and are properly prepared, the process becomes a lot less daunting. Here are some helpful tips and guidelines to prepare you for a loan interview.

Good Relationships with Banks

Before you even get to that interview, the most important thing for you to know is that one of the most helpful ways to get a loan is to have an existing, positive relationship with the bank who is issuing the loan. The more positive business history you have with that bank, the more likely the bank will lend you the money.

Once you have that relationship in place, it helps to have some ideas of what questions to expect at the actual loan interview. Here are some questions to help you prepare and of what to expect.

Loan Interview Questions

• What do you need the money for?
• What are your name, address, and telephone number? (Protip: if you rent, you’ll also be asked to provide the same information, but for your landlord)
• Have you lived at your place of residence for more than two years? (If not, be prepared to give your previous address)
• Where are you employed?
• Do you have any other income sources?

Of course, for some questions, these banks can’t just go on your word alone; they require proper documentation. Here’s what you absolutely need, along with a few helpful suggestions:

• Proof of employment that includes your employer’s name, address, and telephone number: usually a recent pay stub satisfies this, a letter from your employer that verifies your employment also satisfies this requirement.
• Documentation of any other income sources, such as rental income, dividends or proofs of collateral.
• Helpful: Proof of address.
• Helpful: If the loan is for a business, projected cash flow statements are a good idea.

A loan interview, whether it is an auto loan interview, personal loan interview or home loan interview, can be difficult, but being prepared helps. Having a history with the bank, having an idea of the questions, and knowing the proper documentation to bring will help ease your worries. So now that you know what to expect, take a deep breath and get prepared!