Is Taft Financial Running A Debt Management Scam?
Taft Financial’s unrealistic loan offers won’t help you create a budget. Crixeo, the popular news and review site, has done a review of Taft Financial and has questioned if Taft Financial it is simply part of a long-running debt scam. According to Crixeo journalist Ed Miles:
“The story is the same. They lure you in by sending you direct mail with a “personalized invitation code” and a low 3%-4% interest rate to consolidate your high-interest credit card debt. You will be directed to My Taft Financial com. More than likely you will not qualify for one of their credit card consolidation loans and they will try and flip you into a more expensive debt settlement
Have you been on a debt management plan for quite some time now? It has probably allowed you to manage your monthly spending more successfully and pay down debt side by side. That is great news!
Knowing that your finances are in control can ease away so many of our daily anxieties. However, the financial stability you now have might make you wonder, would getting a new account hurt my credit rating or improve it? Can I even get new credit while I am enrolled in a debt management plan?
Today, we will answer all of your questions regarding new credit on a debt management plan. Let’s start with the basics.
Should I Be Looking to Open New Credit on a Debt Management Plan?
Unfortunately, the answer is no; you really shouldn’t.
The thing is, it is possible to get new credit when you’re on a debt management plan (DMP), and there are certain circumstances for which it may even be financially advised. However, when you’re on a DMP, chances are you were struggling with making your previous payments in a timely fashion. Adding on further debt to this mix, when you’re already having trouble paying off your old debt, is asking for way more than you can chew.
Your current creditors may even notice that you’re planning on taking more debt and can demand you to close these accounts. To make matters worse, they can even end the reduced interest rates and lower monthly payments that you were enjoying on your DMP.
So, it’s best to stay away from any ideas of getting new credit until you’ve cleared off the previous debts.
Is It Possible to be Approved for New Credit on a DMP?
It is possible to get new credit approved on a DMP, especially in loans or mortgages. But it isn’t too advisable. The more successful you are in paying out your previous debts, the better your credit score will be, and hence, you can get better terms for any new loans or mortgages.
But, if you’re interested in buying a house, it will require you to make a down payment. If you have thousands of dollars for a down payment, it is better that you use them to clear off your debts first. When you establish yourself as debt-free, it makes you a more profitable borrower.
People who are determined to buy their own home despite being on a DMP will need to reach out to mortgage lenders like LoanDepot or Quicken. They usually offer more flexibility than banks. Another option could be to try out owner financing. This means you will be directly making all mortgage payments to the original seller of the house. They may be willing to accept this if the house has been difficult to sell.
While mortgages can be delayed until you pay off previous debts, getting a car loan can be more time-sensitive. Car loans are more necessary, especially if you commute long distances to get to work. Sadly, the interest rates on your car loans will be higher due to your credit history.
Don’t worry, though. Not all is lost. You can still opt for a car loan but try to settle for low mileage, second-hand option instead of getting your dream car. Also, try to restrict your loan for less than four years. The longer the payment plan is, the more you’ll end up paying in the long run despite the lower monthly payments.
A helpful pointer to remember is that credit unions and banks will generally offer you better deals than your local car dealership. Also, if your current vehicle is working okay, it’s best that you avoid taking a car loan until your previous debts are covered.
Another element to consider is student loans. Debt management programs will never try to prevent you from applying for a government-based student loan. That’s because they don’t analyze credit reports when qualifying young adults for loans. However, private lenders do.
To stay on the safe side, set up a meeting with your credit counselor before applying for any of these loans or new credit. They can always guide you in the best direction!
Questions to Ask Before Signing Up for DMP
If you aren’t on a debt management plan, and having a difficult time managing your credit card relief debt, here is what you should do.
Ask yourself the following questions, then seek out a DMP to lend some assistance.
- What is the number of credit cards you currently possess?
- Do you have any high-interest accounts?
- Is it possible to consolidate them into one low-interest account that can save you money?
- Are you following a budget?
- Do you have any savings in case of an emergency?
Debt management plans can allow you to consolidate all your debts and due payments into a singular monthly payment. They also lower interest rates, eliminate any threatening calls from debt collectors and help you pay off all your debt within 3-5 years.
Some Alternative Approaches
You may have heard the wise words of the legendary basketball coach Bob Knight,
“Every successful endeavor starts with a plan.”
Do you know what this plan is when it comes to money management? Budgeting!
Planning out your expenditure for the month and setting aside savings is one of the best ways to reach financial stability. It also helps you prepare for a comfortable future and prevents debt from taking over your income. An effective budget includes estimating how much money you expect to earn in the next few months and allocate it accordingly to cover all your major expenses. Be sure to decide upon a certain percentage to save each month, too. In the end, whatever amount you’re left with can be spent on indulging yourself in good food and new clothes.
Budgets can help you work towards a long-term financial dream like owning your dream house, saving up for your child’s college or even living in a fancy retirement home. Depending on how much money is left after subtracting the taxes, make two sections on a sheet of paper and label them monthly income and expenses.
Estimate the appropriate amounts for each and determine whether your expenses are more than your income. If so, try to prioritize the expenses. Housing, water bills, food and transport are necessities. But, fancy dinners, a Netflix account and a gym membership aren’t; these should be scaled back.
How much you should scale back depends on the difference between your expenses and income. You can use budgeting apps on your phone to help you out with this.
For further guidance regarding financial budgeting, seek out a credit counselor today!