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Debt Consolidation
Debt Consolidation Is NOT A Loan
The words “debt consolidation” should mean only one
thing to you: a consolidation of all that you owe, into one debt,
and one payment. Unfortunately, they are often paired with the
word “loan”, so that banks and mortgage institutions
offer you a “debt consolidation loan” as your escape
from the debt pressure you’re experiencing. In reality, some
these debt consolidation loans end up as interest second mortgages
on your home, or exorbitant refinancing of it.
While individuals *may* approach their creditors to try and arrange
lower payments, suspension of interest, and other ways in which
to help relieve their debt load without declaring bankruptcy,
a consumer is best served by using a good debt consolidation service.
Debt consolidation experts are trained professionals with years
of experience, in negotiating a debt consolidation into one low
monthly payment, which in the end will benefit both you and the
creditors. Companies or businesses that are owed money, would
naturally like to see it paid. They are generally more receptive
to the approach of a professional debt consolidation counselor
with a well thought out debt consolidation plan, than the individual
debtor who may not have considered all the angles.
Whether you choose debt consolidation on your own, or though
a counseling agency, be sure to carefully read the terms of the
debt consolidation agreement which is drawn up between you and
your unsecured creditors. Remember, this is NOT a debt consolidation
loan. It is simply a consolidation of all debts into one monthly
payment, which is more manageable with your budget.
Debt consolidation simplifies your financial life by reducing
your debts to one payment, sometimes as much as 50% less than
what you are paying out now. Interest costs are greatly reduced,
and by making one regular monthly payment, you’ll no longer
be plagued by late fees. Past dues accounts can be brought up
to current status, helping to re-establish a good credit record.
Find out if debt consolidation can work for you.
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