Debt consolidation is the process of consolidating all of ones credit card payments, medical bills, and payday loans or personal loans into one low monthly payment. Because this is a negotiation process with the creditors, usually no new loans are needed.
Consolidate debt can be done in a number of ways. The most common among them is the home equity loan in which you can use your home as collateral to get a loan. As this is a secured loan, its interest rates are low. If you want a loan without security or collateral, i.e., an unsecured loan, the job gets tougher and the interest rates become higher. You can use credit card transfers as well but you must repay your outstanding debt within the time frame of the low introductory rate. Retirement funds and life insurance are also worth a try. You can also approach credit unions that offer loans usually at lower interest rates and fees. If you are not yet a member, find out if you are eligible to join one.
One great option is a no-profit counseling agency, which can negotiate with your creditors to get your late fees waived as well as have your interest rates reduced. You can also try to renegotiate the credit conditions with your primary lender. Although many advise against it, personal loan from family and friends can be a real option if the situation so demands. Just carefully choose any one from the above mentioned debt consolidation options and get out of debt as quickly as you can.
In case your debt is quite large, it is better to seek debt settlement advice than negotiating with creditors on your own. In fact, creditors themselves will prefer the intervention of a debt settlement company if the amount you owe is quite big. As the market seems full of such companies, you will have to choose the right one from them that suits your budget and requirements. While there are some companies for profit, there are non-profit ones as well in the market.
One of the debt services team is a 501(c)(3) Non-Profit Organization offering free counseling services to consumers even if they are not enrolled in any of the debt consolidation plans. Free seminars are available to the public on how to control your debt. For more information call 1-877-994-0998.
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Debt consolidation involves tackling one major issue at a time. If you attempt to service all of your debt simultaneously with a limited amount of funds, you could stretch yourself too thin, leaving you without enough money to buy month-to-month essentials.
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