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Right Now Is the Best Time Ever to Take Out a Debt Consolidation Personal Loan

[Dec 15, 2009.]

 

Right now may be the best time ever in the history of the world to take out a personal loan and use that personal loan for the purpose of debt consolidation or debt settlement.

Here are three reasons why, if you've ever thought about taking out a personal loan to pay off other unsecured debts, such as credit cards, now is the time to do that deed.

1. By All Means, Kick the Banks When They're Down

If you've gotten yourself in trouble with credit cards, you know how brutal the interest and penalties can be.

Good news: those banks are now in desperate mode because they hope and pray that the millions of people in your exact situation pay back all or part of those outstanding credit card bills. With the U.S. job market still struggling, those paybacks have not exactly been flowing like Niagara into bank bank accounts.

On the contrary, Bank of America is enduring a charge-off rate of 13 percent. Charge-off occurs when a bank declares a loan dead and gone as far as recoverability is concerned.

In such an environment, imagine yourself being the "good borrower" who takes out a personal loan and makes the bank an offer they can refuse, but might as well take because what are the other options?

2. Credit Card Companies Under Severe Political Pressure

Banks and credit card companies are under incredible pressure to discontinue the predatory lending attitudes regarding credit cards that have proved so profitable to them over recent years.

As this Bloomberg column describes, the "party is over" for credit card companies.

This political environment can't help but enhance the appeal of your (relatively) generous offer to pay the credit card company a portion of what you owe in return for a cancellation of the remainder of the debt.

3. Data About "Collectability" Starting to Become Available

If you do choose to take out a personal loan in order to do some form of debt consolidation or debt settlement, you obviously want to know what payback percentage is going to be accepted. That sort of data is starting to emerge, thanks to the thousands of individual consumers and debt settlement companies that have completed or are currently engaged in debt settlement negotiation.

According to this insightful story about credit card collections agencies, paying 10 percent on what you owe may not be too much to ask. By that math, you may be able to settle $20,000 in credit card debt with a $2,000 personal loan. Math like that doesn't come around every day--and won't last forever, either.

Get it while it's hot!

 

About Author:

Andrew Freiburghouse is a writer and businessman. He has worked as a magazine reporter, tax preparer, screenwriter, copywriter, and loan officer. He graduated from Santa Clara University in 1999 with a B.A. in English. Andrew was born and raised in the City of Los Angeles.

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