DEBT CONSOLIDATION

If you find yourself in a financial crisis or are trying to prevent one from happening, a debt consolidation can help you regain control of your financial situation and get out of debt. 

Debt consolidation is a process by which we negotiate with all of your creditors to obtain the lowest monthly obligation needed to satisfy all of your current accounts.

So you pay one "lump" sum monthly which is in turn portioned out to your creditors. This monthly payment will in almost all cases be lower (perhaps by as much as 50%) than the sum of your individual account obligations.

If your objective is to reduce interest rates and lower your monthly payments, avoid bankruptcy, consolidate bills and have one monthly payment, or simply get out of debt the fastest way possible, debt consolidation can help you achieve your goal and save thousands of dollars at the same time.

Debt consolidation loans also serve as positive factors in your credit history. Making a commitment to repay your debts will often help you earn more credit. Your credit history stays with you the rest of your life - a debt consolidation loan will get your credit back on the right track quickly.

Debt consolidation can help you: 

• Get back on track with consistent payments
• Keep current on your bills
• Get you out of debt one month at a time
• Communicate with your creditors
• Work toward accomplishing your financial goals

Debts that qualify for a debt consolidation are:

• Unsecured Debt such as credit cards, medical bills, department store cards, lines of credit, collection accounts and taxes.
• Secured Debts such as your house and car always stay in your budget because you need them to live.

Things you should ask before getting a debt consolidation loan:

• What fees apply to the loan? Small service fees are typical, large commissions should not be paid. Be wary of any company that claims it can reduce your debt, and avoid any company that wants to charge you a large commission to reduce your debt.
• What is the interest rate on the loan? This should be much less than your credit card rates. A high interest rate will prevent you from paying the consolidation loan off. Try to get a fixed interest rate so your payments do not change.
• What are the payments on the loan? The payment should be lower than the amount you were paying before the consolidation.
• Will the loan adversely affect my credit rating? Make sure the loan procedures are explained to you before you sign the loan. Avoid lenders that are not clear on this issue. Obviously, companies that claim they can reduce your debts have a greater chance of causing harm to your credit rating.

A debt consolidation loan should be used when your credit card payments become unmanageable by normal budgeting methods.
Debt consolidation loans are one of many solutions that can temporarily reduce debts. To prevent further debt from accumulating you will need to change your buying habits.