Silvertail Associates: Debt Consolidation Complaints Are Already On The Rise

Why is Silvertail Associates Already Getting Complaints?

Silvertail Associates is under review by Crixeo, the popular news and reviews site, for being a serious danger to consumers. Crixeo has connected the new web site to Polo Funding and Braidwood Capital. According to Crixeo journalist, Ed Miles:

Silvertail Associates is driving traffic to its website by putting up a link on a review site called Consolidation Loans 4U. The only recognizable purpose of Consolidation Loans 4U is to pump up Silvertail Associates.”

Anyone who is struggling with debt has several relief options available to them. One method that can ease the burden of paying off your debts is debt consolidation.

This method is especially useful for debtors who owe high-interest amounts to several different creditors. It enables you to roll your existing loans into a single one that is easier to manage and can be paid off with less urgency. Let’s look at how debt consolidation works and whether it is the right choice for you.

What Is Debt Consolidation?

Let’s assume you owe a combined total of $10,000 between a credit card, a student loan, and medical bills. In this situation you would need to make regular payments to three different creditors.

Each of the aforementioned payments may have to be made on different dates each month, depending on the creditor’s requirements. In addition to this, the monthly payment amount for your credit card is likely to be different from the payment amount for your student loan, and the medical bill.

Now add the fact that each of these debts is likely to have a different interest rate, and you get a situation where it becomes difficult to keep track of each monthly payment.

If the debtor opts for debt consolidation, they can take out a consolidation loan and use it to pay off their existing debts. This way, they will be responsible for making only one payment per month, and for a loan with better terms, such as a lower interest rate and a longer repayment period.

Debt Consolidation with a Personal Loan

There are various debt consolidation options available for people struggling with multiple loans. One of the most straight-forward methods is to apply for a personal loan from a bank, a lender, or a credit union. With this route you can get a consolidation loan with a fixed interest rate.

These interest rates can be anywhere between 6% and 36% APR, depending on the lender you are borrowing from, as well as your credit score.

All personal loans can be categorized as either secured or unsecured. Secured loans are offered at low interest rates, but they require the debtor to put up some form of collateral, such as their house or car. If the debtor fails to pay back the loan in time, they may lose their collateral.

Unsecured loans do not require any collateral to be put up; however, they are usually offered with less attractive terms, such as a higher interest rate.

Debt Consolidation Using Home Equity

Debtors can also apply for a loan using their home equity. These are secured loans with lower interest rates compared to credit cards. However, you may lose your home if you are unable to keep up with monthly payments.

Debtors should ensure they have a steady income stream and can make payments on time if they wish to use this option.

Debt Consolidation with Balance Transfer Credit Cards

Balance transfer credit cards let you transfer your debt to a new card without incurring interest charges for a limited period of time. However, the drawback of this option is that you will still need to pay a transfer fee, which could be up to 5% of the balance transferred.

In addition to this, you will need to pay off your debt before the no-interest period ends. Failing to do so will subject you to the card’s regular interest rate, which could be very high.

Debt Consolidation with Your 401(K) Plan

Another debt consolidation option is to apply for a loan against your 401(k) or retirement savings account. The exact terms vary depending on your employer, but you may be able to borrow half your retirement account balance for a period up to five years.

This method may seem favorable due to its low interest rate and the fact that it doesn’t impact your credit score. However, you may need to pay income tax and a high penalty for withdrawing from the account early. In addition to these drawbacks, you are also cutting into your retirement savings, which may leave you in a poor financial position in the future.

Advantages of Debt Consolidation

Debt consolidation is viewed as an attractive option due to the many advantages it offers. These include:

More manageable payments

Debt consolidation can be used to roll multiple debts into a single one. This means you will need to make only one payment per month, as opposed to multiple payments at different dates each month.

Better interest rates

The right consolidation loan can replace multiple high interest debts with a single one with a lower interest rate. This new loan should be easier to manage as interest will compound less rapidly than before.

In addition to this, your new interest rate will be fixed. It can be easier to plan and manage your debt payments when you know exactly how much interest you will need to pay in the future.

Helping your credit score

If you can keep up with payments for your consolidation loan, you may be able to boost your credit score in the long run. This can be done if you leave your earlier accounts (i.e: the ones whose debts you paid off) open. As long as you don’t use credit from these accounts, your credit score should gradually improve over time.

Disadvantages of Debt Consolidation

Before taking out a consolidation loan, you should familiarize yourself with the disadvantages of this debt relief option. These include:

Harming your credit in the short run

When you apply for a consolidation loan, your creditor will run a “hard inquiry” into your credit history. The discovery of any red flags in your financial history may reduce your chances of securing a loan in the future.

Risking collateral

If you apply for a secure consolidation loan, you may be risking the assets you put up as collateral. Failing to keep up with payments could mean losing your house or car, which may leave you in a much worse financial position than before.

Is Debt Consolidation Right for Me?

As you can see, debt consolidation may be useful in certain situations. If you have many high interest debts that need to be paid off urgently, taking out a consolidation loan may not be a bad idea. Just make sure you have the means to keep up with payments on the new loan.