Debt Consolidation Reviews
In this economy, chances are, you or someone you know may be struggling with an unmanageable amount of debt and looking for relief by reading reviews of such solutions as debt consolidation. In many states across the country, including Texas, many consumers have accumulated too much debt from credit cards or even unsecured debts, such as medical bills, utilities, or department store charges. The good news is, you may qualify for debt relief that can help you pay off your debts sooner.
Some of the popular debt relief options out there include debt consolidation, debt settlement, consolidation loans, or even bankruptcy. Debt consolidation typically involves combining all your debts into one, more structured, and more manageable payment made to a credit counseling agency. On the other hand, debt settlement allows you to negotiate with creditors for a substantially reduced amount to what you originally owe. Both options have become popular alternatives to bankruptcy - which has a more damaging and longer lasting impact on your credit.
If you're in search of the right debt relief option for you, it is a smart move to always to review the pros and cons of debt consolidation and all solutions, and find out how long it will take for you to pay off your debts and how much you can save. To get started, request a free debt relief analysis along with a savings estimate - at no obligation to you. Start now.
Debt Consolidation Benefits
Given the choice of dealing with multiple payments every month or having just one payment to worry about, many consumers choose the latter. That is generally the idea behind debt consolidation or what is also known in the industry as a debt management plan (or DMP). When you enroll in a debt consolidation plan, you can combine, or "consolidate," multiple credit card and unsecured debts into one, more structured, and more manageable monthly payment made to a credit counseling agency.
When you enroll in a debt consolidation program, credit counselors review your finances - taking into account your debts and sources of income. Once they determine how much money you can reasonably dedicate to paying off your debts, they will typically develop a strategy, submitting proposals to creditors asking for reduced interest rates, or the waiving or elimination of any late fees or penalties. Creditors that agree to the proposals are placed into the debt management plan.
Should You Take Out a Personal Loan?
Many consumers struggling with debt apply for debt consolidation loans to help pay off their credit card debts and other types of unsecured debts (such as medical bills, retail store charges, or even utilities). With typically reduced interest rates, debt consolidation loans can certainly help many individuals cut their debts because they have, ideally, combined all their high-interest debts into one, lower interest loan.
However, debt consolidation loans are generally risky and can harm one's credit--here's why: Debt consolidation loans typically involve taking unsecured debt and paying it off with funds that come by way of a "secured" loan, meaning, it is generally a loan where you would have typically put up your home or other asset to get approved. If you fail to make your loan payment, you would have essentially put your home at risk.
In many cases, consumers who get debt consolidation loans start using their credit cards again - and end up accumulating additional debt. As a result, many of them will have new, high-interest credit card debts to deal with on top of their loan. As one can imagine, under this scenario, a debt consolidation loan has generally made their debt situation go from bad to worse. So, it is critical to compare all your debt relief options and review the differences between debt consolidation and debt consolidation loans before taking action.
Debt Relief to Help You Become Debt-Free
While debt consolidation and debt consolidation loans can both provide relief, the process in which they help you pay off your debts certainly vary. As mentioned earlier, with a loan, the goal is to combine high-interest credit card and unsecured debts into one, lower interest loan. Since it generally means taking unsecured debt and paying it off with funds that come by way of a "secured" loan, you could be putting your home or assets at risk - if you default on the terms of your loan agreement.
In contrast, with debt consolidation, you are typically combining or consolidating credit card and unsecured debts into one, more structured, and more lenient monthly payment made to a credit counseling agency. The goal of debt consolidation is, with a single, more structured, and more affordable payment plan, you can, ideally, reduce your debts sooner than if you continued making the monthly payments on your credit card debts at higher interest rates. It stands to reason then that for many consumers, debt consolidation, if followed faithfully, may be a preferred way to pay down debts at a more predictable pace.
To find out how debt relief can help you become debt-free, request a free debt relief analysis along with a savings estimate - at no cost to you. Start today.