Skip to content

Personal Debt Consolidation: How Does It Help?

When you were in a tight situation, you may have applied for several credit cards. It is easy to spend the money on those cards, but it is not nearly as easy to pay them all back in a timely manner. Each card you own could have a different minimum monthly payment and a different due date. Trying to remember how much money to put down on each one by a specific date often becomes stressful and tiring.

In fact, even if you plan to pay the monthly minimum for all of your credit cards, there may come a time when you accidentally forget about one because you have so many of them in your wallet. If you would prefer a much simpler solution, personal debt consolidation is an option. Consolidating your debt would help you avoid making multiple payments on various dates to different creditors.

If you do not know how personal debt consolidation works, the first step involves contacting a consolidation company that is willing to help those who have a lot of debt. These companies are often willing to call the creditors for you to try to get the amount you owe reduced. After they make negotiations with the different creditors, they will give you the money you need to pay back each credit card you currently owe. However, you will have to pay it back to them over a period of time and it may incur an admin fee. Be aware of payment protection insurance (PPI) as this is often included with loans and credit card consolidation but is rarely needed. PPI expert Martin Lewis has lots of info about this and his website is well worth a visit.

You may wonder what the difference is between owing money to the credit card companies and owing money to a debt consolidation company. The difference is you only have to make one payment each month instead of a bunch of payments. The consolidation company gives you a specific date where you can pay a portion of the amount they have loaned to you. There is a good chance the total amount you pay to them on a monthly basis will not be nearly as high as the amount you were paying on your cards each month.

Another good reason to choose debt consolidation is to avoid interest rates. Even if the consolidation company charges a bit of interest, it will not even come close to the amount of interest you would have been paying on all of your different cards during the month. Overall, it will be easier for you to pay the money back that you owe. Something that could have taken you a decade to pay off may now only take you one or two years.

Do Homeowners Insurance Policies Include Flood Coverage?

Homeowners insurance policies, and renters policies, usually do not provide coverage for damages occurred due to flooding. However, in case you want, you can purchase flood cover as an addition from a number of different private providers and the National Flood Insurance Program.

Coverage of a maximum of $250,000 is ensured by the NFIP for your house structure, and of $100,000 to care for your personal belongings. While your house coverage is provided on the basis of replacement cost, personal possession coverage is provided on the basis of actual cash value only.

Replacement cost means that, in case your home suffers damage, you are given enough cover to rebuild it to its original state. But, actual cash value refers to the amount obtained by subtracting the depreciation value from the replacement cost of an item. That means, the older an item the less money you get for it. Also, coverage limit may be imposed on furniture and similar belongings that you can store in the basement.

Both homeowners and renters can obtain flood insurance. In case you reside in a zone that is designated as flood zone, you cannot do without flood insurance. That said, many inland regions which are located at a good distance from primary rivers are also not immune to flooding.

If your home faces the risk of witnessing flood due to melting snow, overflowing pond or creek, water flowing down a hill that is steep, or some other reason, you should go ahead and buy a flood insurance. Waiting for the authorities to give you flood warning to take insurance is not a good idea, as a waiting period of 30 days prevails for your insurance to take effect.

A few private insurance companies offer excess insurance for flooding, too. That is, for those who require more insurance protection than the basics provided by a standard policy.

Excess insurance can prove to be valuable for people who do not have a policy with NFIP. Depending on how much cover is bought, an excess insurance can cover replacement cost for structural damage and provide actual cash value for personal belongings.

In any part of the nation where the federal program can be obtained, excess insurance can be found. You can either purchase excess flood insurance from a regular insurance company that covers flood damage, or from an independent agent.

To understand flood insurance policies in depth and to get affordable home insurance, talk to your agent.