A debt consolidation
is the practice of consolidating multiple bills (typically unsecured* debts, but
not always**) and payments into a single payment usually through some form of
debt management or counseling, credit card consolidation, home equity or
personal loan program. Here, we will briefly discuss loans and using a credit
card for consolidation. To learn more about related services and compare
providers, visit one of the following directory pages
on this web site:
- Credit Counseling - Review and compare web sites of non-profit credit counseling companies from the Open Directory Project (ODP).
- Personal Loan - Need a smaller loan? Personal loan financing is most often unsecured. Meaning... your home or personal property is not used as collateral and the loan decision will typically be based upon your credit history and your ability to make the necessary payments. Also, this is often referred to as a signature loan.
- Debt Management Programs - Do you have too many monthly bills and payments to manage them effectively? Visit this directory of sites in order to review and compare different debt management programs that may be able to help.
- Debt Settlement Companies - If you have too many credit cards and other small debts and are unable to make your payments, this form of debt negotiation may be right for you.
Additional Advertiser Directory Listings:
A few important considerations / tips to keep in mind:
* "Unsecured" refers to the type of lending in which no collateral is required to borrow money, or be "secured" to the loan or debt.
Credit counseling / debt management services can help you deal with your
unsecured debts and help you get back on track. However, there are two very
important things to keep in mind: 1) Services or programs that renegotiate the
original terms of the money you borrowed can adversely affect your credit
history / rating and impair your ability to obtain approval for financing in the
future; 2) Unless you are completely committed to following a debt management
plan, or changing your spending habits after the settlement or
consolidation of your debts, you will likely wind out right back where you were
when you started... but, even worse off. --- These programs are
not quick fixes
and will still require your dedication and hard work to complete successfully. Getting help is OK, but
you must also be willing to help yourself. So, unless you are committed to a
program, don't start! Unfortunately, indebtedness is not
unlike any other kind of trouble. It is much easier to get into, than out of.
** The consolidation of secured debts, such as home equity loans or the
remaining balance on a car loan may be secured by a new, larger equity loan.
This may enable you to get a slightly lower interest rate on your obligations,
but this is still not recommended as it uses your home's equity for collateral.
By consolidating and removing an automobile loan payment, you may be able to
reduce your monthly bills by a considerable amount, but unfortunately, this
might only serve as a short-term solution that results in long-term problems. It should be noted, that in addition to placing your house at risk,
the term for repayment of that consolidated debt can be extended by several years.
Any savings you may have gotten with a lower rate is wiped out by your overall
increase in interest costs. Do you really want to be paying for your car long
after it has reached its final resting place on the scrap heap? However, if you do take this route, (as with
all loans and debts) be sure to make additional payment amounts as often as you have the ability to
comfortably do so. Even small extra payments, against the principal on a loan, can shorten the term
substantially and help you get out of debt much quicker.
More Debt Consolidation Information:
In the form of a loan consolidation, this generally results in a longer
repayment term and thus a lower required monthly payment. Interest rates in
consolidation loans can vary based upon a number of factors, including your
credit history. Also important is if the debt the type of debt is being changed
by the consolidation. For example, unsecured debt (credit cards and personal
loans) being consolidated into secured debt, such as
home
equity and
auto loans would
generally (but not always) result in a reduction in interest rate. When
consolidations include a mortgage, they are frequently included in the
refinancing of a first mortgage or the establishment of a second mortgage or
home equity loan to allow a consumer, such as yourself, to take advantage of the
available equity in your home. Even though the you may not actually receive any of the loan proceeds, this is commonly referred to a cash-out loan, because you are paying off debt in addition to the principal balance of your existing mortgage.
In the case of credit card debt consolidation or balance transfer offers, they are often accompanied by some sort of promotional offer with a lower interest rate for a shorter period of time (6 months to a year... "teaser rate"). However,
credit card
issuing banks offering lower
interest rates on balance transfers / debt consolidations that last for the “life of the balance”
are becoming increasingly more common.
One additional advantage of debt
consolidation is the your ability to consolidate smaller payments to many
creditors to a single payment to one creditor in order to make your personal finances easier to manage.
Having multiple credit cards with high balances and different due dates can
simply become overwhelming and very discouraging. Consolidating your debts can
help you get a handle on the situation and ultimately get you back on track
to a secure financial future. Notice that it is mentioned that it can
help you.....
TIP / WARNING: Consolidating your debt will do
absolutely no good if you think the resulting lower payments are a license to go
out and shop. You will only make your financial situation worse. If you do
decide to consolidate your bills, use your new found breathing room to create a
safety net for yourself. Open a savings account at your local bank (Find a
local bank in our
banking directory) and place money in it each week. When an emergency comes up,
or you feel that impulse buy coming on, keep the credit card in your wallet. Use
the money you have already saved! As much as we like you to use the different
debt solution companies on our web site, we would prefer that you only use them
once. Instead, come back to the
Debt Consolidation Loan Directory to shop for other financial services and
save even more money.
Looking for debt solutions, credit card bill consolidation
loans or
credit counseling in a particular state?
Browse the Debt Consolidation Loan Directory by state
Secure |
8930 Stanford Boulevard Columbia, MD 21045. 
4859 W Slauson Ave #405, Los Angeles, CA 90056. 
Main Office Address: 4859 W. Saluson Ave #405 Los Angeles, California 90056
Main Office Address: 8930 Stanford Boulevard Columbia, Maryland
21045