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Credit 9 Gets Bad Review For Debt Consolidation Loans

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Have You Received A Loan Offer In The Mail From Credit 9?

If you have been thinking about it and you just received a “too good to be true” loan offer in the mail from Credit 9, Tripoint Lending, Simple Path Financial, or SPF Saves or – listen to your gut instinct. Do you really think you qualify for a 3% interest rate? Do you really think that reservation code is especially for you? Check Crixeo and find out the truth.

Is Credit 9 A Scam?

Credit9 is affiliated with Americor Funding, a debt resolution company.

It appears that Credit 9 is operating a typical bait and switch scheme. They lure you in by sending you direct mail with a “personalized reservation code” and a low 4%-5% interest rate to consolidate your high-interest credit card debt.

Credit9 doesn’t tell you that you need excellent credit to qualify for a loan with that low-interest rate (which you have been supposedly preapproved for).

While the Credit 9 Nine mailer offers incredibly low rates, the licensing information on their site discloses that “typical” rates for most states they include in their disclosure are 18-24% APR.

Interestingly, while having sample rates for the State of Pennsylvania, the Credit 9 website also discloses that “These products/services are not offered to Pennsylvania residents.”

When it comes to debt-consolidation loans, you’ll find varying interest rates that may be different from one lender to another.

Debt consolidation programs cover several types of loans, including home equity loans, personal loans, and balance transfer credit. The main reason for taking out a personal loan is the consolidation of existing debt. Interest rates may vary, but they are less expensive, convenient, and easier to manage than other types of debts – such as medical bills and credit cards.

The average interest rate depends on the type of personal loan you’re applying for, your credit score, and other factors. In most cases, the better your credit, a better credit will get you approved for a more affordable interest rate.

Factors That Influence Debt Consolidation Loan

Lending Tree also reported that the annual percentage rate (APR) for a personal loan was also heavily influenced by the credit score of the borrower.

For a credit score of 720 or higher, the APR was 7.63% at its lowest. And for a credit score of 560 or lower, the APR was a whopping 113.62% at its highest.

This means that personal loans favor buyers with strong credits, while borrowers with a bad credit face extremely high interest rates. It is worth shopping around, no matter how bad your credit score.

Doing research will give you an idea about the rates available to you from different lenders and your options. It is worth noting that each application could trigger a hard pull on your credit report, which will hurt your credit score for a few months. This is why it is better to submit multiple applications in quick succession so that your credit score only goes through a single hard inquiry throughout your shopping period.

What is the Average Loan Legnth for Debt Consolidation?

The average loan length varies, but most borrowers are able to secure a repayment term of between 2 to 5 years. While it is within the realm of possibility to negotiate a higher repayment term, it will come at the cost of a higher interest rate. Not to mention the fact that you’ll be paying the interest rate for longer. Lenders do this to offset the risk of default on their loans.

Factors That Affect the Average Debt-Consolidation Loan Rate

The actual loan rate depends on the type of solution you’re looking for. For instance, home equity loans have the lowest average interest rates This is because it’s a secured loan, meaning your home becomes collateral, and you can secure a lower rate that is more feasible for you. The average home equity loan for a 15 year term at fixed rates is well within the range of 3% to 9%.

By contrast, unsecured personal debt accrues some of the highest interest rates. They are unsecured, which means there’s no collateral for lenders to recoup their investments should the borrower default. These are known as personal loans and they often come with an average loan rate of about 11.91%.

Other than the type of product you’re looking for, there are few other factors to consider.

Credit Scores

As a general rule, a strong credit score can help you secure lower interest rates. But if your credit report shows a history of late or missed payments, you should try to improve your credit before applying for debt-consolidation loan.

The Lender

You’ll find debt-consolidation loans at credit unions, online lenders, and traditional banks – among others. Every lender will charge a different rate. You’ll get lower APRs at credit unions compared to traditional banks. Some online lenders offer loans to individuals with low credit scores. But their interest rates are often extremely bloated – often hovering within the ranges of 6% to over 30%.

Debt to Income Ratio

The Debt-to-Income ratio is the ratio of your debt owed each month to your earnings. Lenders often equate high DTIs as a high risk. A high DTI, usually above 40% will make it difficult to secure a lower interest rate.

Loan term

The loan term is the period over which you repay your loan. A shorter-term loan offers lower interest rates and reduces your overall cost. Longer loan terms come with high APRs and a higher cost, but they usually translate to lower monthly payments.

Fixed vs. Variable PR

A fixed interest rate might mean a higher interest rate, but it will likely remain the same during the length of your term. Variable interest rates often start lower but increase over time based on market changes.

The Bottom Line

Now that you know more about debt-consolidation loans, you can strategize the best financial outcome for your situation.

Finding a good interest rate requires two basic elements:

  1. The loan you receive should have a lower interest rate than your existing debt
  2. You should change your spending habits to get out of debt without paying.

Despite the glaring issues (for individuals with lower credit scores), consolidation loans can be extremely useful with the right tools. Provided you’re astute with your finances, you should be able to clear out your other debts with relative ease. It’s always prudent to do your research when it comes to any major financial decision, and this holds true for debt consolidation.

As always, make sure to read the terms and conditions to learn as many details about the loan as possible – otherwise it could end up being something like a natural disaster.

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Martin Lewis issues guidance on using credit cards to build ratings – best deals | Personal Finance | Finance

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Martin Lewis regularly urges savers to use caution when utilising debt themed products but at the same time, he acknowledges the need for a decent credit rating to get by financially. Today, the Money Saving Expert was questioned by viewer Miranda on how one can build their credit rating in difficult circumstances.

“What I’d then like you to do is go and do £50 a month of normal spending on it, things you’d buy anyway.

“[Then] Make sure you pay the card off in full every month, preferably by direct debit so you’re never missing it because the interest rate is hideous.

“That way you won’t pay any interest.

“You do that for a year, you’ll start to build that credit history, showing them you’re a good credit citizen.

“Then you’ll be able to move into the sort of more normal credit card range.

“So, bizarrely, to get credit you need credit. What credit will you get? Bad credit, go get the bad credit just make sure it doesn’t cost you.”

Consumers of all kinds may not have the best options at the moment as recent analysis from moneyfacts.co.uk revealed.

In mid-November, they detailed that a number of high street banks have cut the perks and interest on a number of their current account deals.

On top of this, the Bank of Scotland and Lloyds Bank made credit interest cuts of up to 0.5 percent.

Rachel Springall, a Finance Expert at moneyfacts.co.uk commented on the few options consumers and savers currently have available: “Clearly, it is vital consumers decide carefully if now is the time to switch, but if they wait too long, they may well miss out on a free cash switching perk.

“At present, providers will be assessing how they can sustain any lucrative offers in light of the pandemic.

“With this in mind, we could well see more changes in the months to come and if this does indeed occur, consumers would be wise to review whether their account is still worth keeping.”



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Should you use a balance transfer to pay off debt?

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Should you use a balance transfer to pay off debt?
Image source: Getty Images.


A balance transfer might be the solution if you have debts and want to gain control over your finances. But whether a balance transfer is right for you will depend on a number of factors.

Things to consider before using a balance transfer

The size of your debt

If you want to apply for a balance transfer credit card, be aware that most providers will allow you to transfer up to 90% of your credit limit.

Your credit limit will be dependent on your own personal circumstances, including your salary, your credit history and your residential status (homeowner or renter).

Be realistic about your debt. For example, if you earn £25,000 per year and you have a debt of more than £15,000, a balance transfer might not be cheapest way to pay the debt.

The time taken to pay the debt

The main advantage of a balance transfer credit card is that many offer an interest-free period on the balance. So, if you can pay off your balance in that period, you won’t accrue any further interest charges.

However, these periods typically range from 18 to 24 months, so if you think you will need more time to pay the debt, you may need to factor in additional interest charges when the interest-free period ends.

Whether or not a balance transfer is the right debt payment solution will depend on your personal circumstances. Check our balance transfer calculator if you want to work out how much a balance transfer could save you in interest payments.

Your credit score

The advantage of a good credit score cannot be underestimated in this situation.

When applying for a balance transfer credit card, the company will check your credit score. Based on this score, they could refuse your application.

Even if you are accepted, if you have a bad credit score they could reduce your credit limit. Ultimately, this will determine the benefit of a balance transfer as a suitable debt payment solution.

If you think your credit score might be a problem, it’s worth checking with the credit reference agencies before applying. That way you can avoid any nasty surprises.

There are three main consumer credit reference agencies in the UK. They are Equifax, Experian and TransUnion (Noodle).

Alternative solutions to balance transfers

You could still use a balance transfer even if the size of your debt is bigger than the credit limit.

Transferring part of the debt would enable you to benefit from any interest-free period, where applicable.

Alternatively, if you have multiple debts, you could consolidate all of your debts so that you can make a single regular payment. If necessary, you could do this using an unsecured personal loan over a period longer than 24 months.

Take home

Look at your own personal circumstances with a critical eye. Remember that you need to factor in living expenses when thinking about how long it will take you to pay off your debt.

Balance transfers are a useful method for debt repayment, but be aware that credit cards are an expensive way to borrow money. Take full advantage of any 0% deals wherever possible. Check out our list of the best 0% credit cards.


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Turn credit declines into a win-win | 2020-11-20

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The pandemic has left millions of people needing credit at a time when lending standards are tightening. The result is a lose-lose situation—the consumer gets a bad credit decline experience and the credit union misses out on a lending opportunity. How can this be turned into a win-win?

The case for coaching

Let’s start by deconstructing the credit decline process: The consumer is first encouraged to apply. The application process can be invasive, requiring significant time commitment and thoughtful inputs from the applicant.

After all that, many consumers are declined with a form letter with little to no advice on actions the applicant can take to improve their credit strength. It is no wonder that credit declines receive a poor Net Promoter Score (NPS) of 50 or often much worse.

On the flip side, forward-looking credit unions provide post-decline credit advice. This is a compelling opportunity for several reasons:

  • Improved customer satisfaction. One financial institution learned that simply offering personalized coaching, regardless of whether or not consumers used it, increased their customer satisfaction by double digits.
  • Future lending opportunities. Post-decline financial coaching can position members for borrowing needs even beyond the product for which they were initially declined.
  • Increased trust. Quality financial advice helps build trust. A J.D. Power study noted that, of the 58% of customers who desire advice from financial institutions, only 12% receive it. When consumers do receive helpful advice, more than 90% report a high level of trust in their financial institution.

Provide cost-effective, high-quality advice

AI-powered virtual coaching tools can help credit unions turn declines into opportunities. Such coaches can deliver step-by-step guidance and personalized advice experiences. The added benefit is easy and consistent compliance, enabled by automation.

AI-based solutions are even more powerful when they follow coaching best practices:

  • Bite-sized simplicity. Advice is most effective when it is reinforced with small action steps to gradually nurture members without overwhelming them. This approach helps the member build momentum and confidence.
  • Plain language. Deliver advice in friendly, jargon-free language.
  • Behavioral nudges. Best-practice nudges help customers make progress on their action plan. These nudges emulate a human coach, providing motivational reminders and celebrating progress.
  • Gamification. A digital coach can infuse fun into the financial wellness journey with challenges and rewards like contests, badges, and gifts.

Virtual financial coaching, starting with reversing credit declines, represents a huge market opportunity for credit unions. To help credit unions tap into that opportunity, eGain, an award-winning AI and digital engagement pioneer, and GreenPath, a leading financial wellness nonprofit, have partnered to create the industry’s first virtual financial coach. To learn more, visit egain.com.

EVAN SIEGEL is vice president of financial services AI at eGain.

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