Debt Consolidation * Debt
Negotiation
Consumers
Info USA
knows that mounting debt is a
major concern for many Americans today.
If you are concerned about your current debt situation, constantly trying to
eliminate debt from your life, you are not alone. In fact, over half of all
American households have trouble meeting their minimum monthly obligations,
driving them further and further into debt.
With the average household
having 14 credit cards, its no wonder that credit card debt elimination is a big
concern for most families. Finding a way to eliminate debt however seems almost
impossible at times. But, if you are in this situation, then understand that
you do have options when it comes to debt consolidation and elimination.
Once you take the time to
understand these options it is easier to choose the one that best suits you.
Debt Consolidation
versus Debt Negotiation
No doubt you hear a lot
of names and terms thrown around when it come to the subject of debt
consolidation. Often they are used interchangeably, but they all essentially
fall into two basic categories. Debt Consolidation… this is basically is
getting one loan at a lower interest rate to pay off all the other loans. And
Debt Negotiation… often called Debt Settlement in which an attempt is made with
the creditors for a lump sum payoff, or renegotiation of the terms and reduction
of the interest rate.
Debt Consolidation
Debt Consolidation
Companies offer consolidation loans that people use to combine all existing
consumer debts or credit card debts into one single loan and one monthly
payment. Some form of collateral, usually the family home, is often required to
secure these loans. A co-signer may also be required
The are also options to obtain an unsecured loans for bill consolidation, but
often the high interest rate associated with them could be even greater than
what you have now which would defeat the purpose.
A debt consolidation loan allows borrowers to make payments to a single creditor
rather than to many creditors who compete for loan repayment. You get one loan,
and pay off the other entire loan. The concept is that the one large monthly
payment will be much less than the total of all those other separate payments.
And it simplifies things.
Debt simplification is appealing to many people whose personal finances have
become complicated and unmanageable, but true debt reduction is usually NOT a
benefit of such a consolidation loan.
A disadvantage is that consolidation loans, transform unsecured debt, which is
not backed by any collateral, into secured debt, which is. Since most people use
the family home as collateral, it could place the home at risk if they become
unable to meet the conditions of the consolidation loan agreement.
Debt consolidation lenders are willing to work with their clients. However… if
for any reason, you fall behind on monthly payments or become unable to make
payments at all, the lender could take whatever was used as the collateral
asset.
Debt Negotiation
Debt negotiation is
sometimes referred to as debt settlement. This is most often offered to people
who can't handle a debt consolidation loan program. This
consolidated debt plan is much different. If you qualify for such a plan, you
may restructure your debt with existing creditors without transforming unsecured
debt into secured debt.
In fact, secured debt such as a home mortgage or automobile loan is generally
NOT included this type of plan. Unsecured debts, usually credit cards, student
loans, bank lines of credit, medical bills, department store credit cards and
collection agency accounts, are more typically the kinds of obligations
considered for a consolidated debt plan.
Under a consolidation plan, loans are NOT made at all… which is why you usually
you can’t include any debt that has collateral attached to it. (car loans,
home loans, etc.)
All existing creditors remain the same. However, interest payments due creditors
may be re-negotiated, lowered or completely eliminated to allow more principal
to be paid to your debt each month.
In fact, debtors may cut their monthly interest costs by as much as half what it
had been before the implementation of the consolidation plan. This is the
primary reason why someone pursuing quick debt reduction may be able to get out
of debt in only 3 to 5 years on average – much preferable to the 10 or 15 years
a consolidation loan may have taken to pay off.
A debt consolidation plan will allow you to manage your finances without any
additional loans and without declaring bankruptcy. If you are having trouble
meeting the minimum monthly payments on your debts or you feel you are slipping
further behind each month, let a Debt Consolidation and Debt Management
professional go to work for you.
Now you have a basic
understanding of a debt consolidation loan program versus debt negotiation, or
settlement, program. You will continue to hear then general term debt
consolidation used both ways all the time by many people. It is important that
you know the difference. Usually it takes one simple question: Is there a
loan involved with your program?
Consumers Info USA wants to
remind you...
that you are never obligated to accept and agree to
participate in
any debt consolidation program simply
because you completed an application.
Before you accept and agree to enroll in a program make sure you understand the
terms. Will there be a loan involved, what are the rates, and exactly what your
total monthly payments are. Then you decide if you can comfortably afford to
make the payment!
Or is it a debt negotiation and restructuring program, and how much will those
total payments be? How would the monthly payments be reflected on the credit
report?
The
companies listed below offer both options! You decide what is best for your
personal circumstances.
Whether you have fair credit, bad credit, no credit, or are rebuilding your
credit after a bankruptcy... the companies below have been rated the best in
this debt consolidation category by consumer surveys, and past customer
feedback.
Simply click on the links below. You can quickly submit a
Free, No
Obligation, Online Application!
We recommend that you take the time to submit an application to each company.
Once they reply back to you, compare each of their offers... and then decide
which one you feel most comfortable with. Then you choose which offer you
would like to accept:
