Are you already in debt? Do you have more than one debt? You can be worried by high interest credit cards, loans and mortgages. In order to pay off the debt oftentimes we need to borrow from someone else which can create another debt. Without any knowledge this promotes another problem in terms of debt. The solution to this problem is debt consolidation. Learn how to pay less and get out of debt more quickly. You have options when it comes to credit counseling, learn which one is right for you!
Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.
Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, most commonly a house. In this case, a mortgage is secured against the house. The collateralization of the loan allows a lower interest rate than without it, because by collateralizing, the asset owner agrees to allow the forced sale (foreclosure) of the asset to pay back the loan. The risk to the lender is reduced so the interest rate offered is lower.
The benefits to you will be:
- Reduce Interest Rates
- Lower Your Payments
- Stop Collection Calls
- Restore Your Credit Rating
Debt consolidation services are for Credit Cards, Medical Bills and/or Collections Accounts. Only consumers having difficulty meeting monthly payment requirements or are un-able to reduce their balances should apply.
The debt consolidation services and benefits are extended by the credit grantors. Consumer's payments must be made on time or creditors may drop a consumer from a DMP and not allow re-instatement. If this happens then the benefits extended by the creditors will be revoked.
The Debt Management Programs offer several benefits to consumers:
- In making a consistent payment each month throughout the program, the consumer is able to repay the outstanding balance faster. Typically becoming debt free within 3-5 years.
- Once set up into a Debt Management Plan, collection activity on an account will stop.