Credit Consolidation Information

Credit ConsolidationA credit consolidation can be a great way for individuals to get themselves out of debt.  And while it may not provide an immediate fix, it does offer a responsible and an effective one.  When an individual chooses to consolidate their debt, they work with a third party to lump all of their debt together and negotiate lower interest rates. This does two things. It lowers one’s monthly payments and it also helps them pay off their debt faster.  However, credit consolidation isn't the only way to deal with debt.  There are some other ways, such as bankruptcy, debt negotiation, refinance and a home equity loan.

Refinancing one’s home has been a popular way to a get rid of debt.  An individual takes out the equity out in their home and uses it to pay off their credit cards.  The credit card debt becomes a part of the home loan.  An equity line of credit is simply an open credit account that individuals can borrow against.  The problems with these two methods, is this that you have not done away with the debt. It is still there and you are still paying for it. You are just enveloping it in more debt.   Also, because these are secured loans, if you aren't able to pay back what you owe, you can lose your home. 

A debt consolidation loan is a similar way to deal with debt.  I'm these cases you take out a loan, pay off your existing debt and then pay back the lender who gave you the money.  Again, you are just taking on new debt and transferring it from one company to another.  Debt negotiation or debt settlement is another option.  This is a little bit different from the other three.  A debt settlement company will contact your creditors and ask them to take a settlement amount. For example, if you owe $10,000, they will offer to settle your account for only $5,000.  You have to pay the settlement all at one-time.  You don't get to make payments like you would if you worked with a credit counseling or bill consolidation company.  Instead, you'll pay the debt negotiation company every month until they have saved up enough to go to your creditors and ask them to accept a settlement offer.   During this time, you're not paying your creditors.  You're paying the debt negotiation company, so that they can save up enough money to make a settlement offer.  Because you're not paying your bills, your credit report continues to take a hit and you won't know until after you offer to settle your account, whether or not a company will accept it.  This can be a risky way to deal with debt.

 A bill consolidation or credit counseling works little bit different. These types of organizations will contact your creditors, negotiate lower interest payments and perhaps even lower payment amounts. You will pay your creditors every month so that they are never, not getting paid.  They have also agreed upfront to any arrangements, which makes for a much safer and credit friendly option.

To learn more about the process of credit consolidation and what it can do for you, fill out the form above.

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Benefits of Credit Consolidation

  • Make ONE payment per month
  • Reduce your payments by up to 55%
  • Stop creditors harrassment with Credit Consolidation
  • You will only speak with a certified credit consolidation counselor
  • Absolutely no credit checks or obligations