Debt Consolidation and Debt Consolidation Programs
Getting into bad debt can happen to anyone and once it happens to you, you will be looking for a way out of your predicament.
This is why we will be looking at one of the ways you can get yourself out of multiple huge debts with very high interests.
Debt consolidation involves taking a new loan to clear out your multiple debts and then focus on repaying the new single loan.
The new loan will come will a low-interest rate, low monthly payment, or both as the case may be. You can use debt consolidation to pay off credit card debts, student loan debts, and other debts.
How debt consolidation works
To get the loan that will be used to pay off your old debts, you can run to your bank, credit card company, or credit union.
As long as you have an amazing relationship with your financial institution, you can go to them first. If you get turned down, don’t relent.
You can also visit lenders or private mortgage companies to help you out. Furthermore, there are a few specialized debt consolidation companies out there who also offer these services to those who need them.
Debt Consolidation vs. Debt settlement
You must understand the difference between the two so you don’t get confused.
Debt consolidation loans will not make your original debt disappear. What it does is to transfer your debts to a different lender.
In essence, you take a new loan from a lender and use the funds to settle your old debts and be left with the news loan to contend with.
Hope that was clear…
For Debt settlement, this is for those who did not qualify for debt consolidation loans. So if you did not qualify for a loan, debt settlement is the best route for you.
Types of debt consolidation
The two comprehensive types of debt consolidation loans are secured and unsecured loans and here is how they are used.
Secured Loans: These are loans that you can back with one of your valuable assets. It could be a house, car, etc.
The asset will serve as collateral for the loan.
Unsecured Loan: For this type of loan, it is hard to get it without collateral. The qualifying amount is usually low and their interest rate is high.
Regardless of the type of loan you choose, the interest rates are low compared to that of credit cards. In some cases, you can enjoy fixed rates as you repay the loan.
Here are some ways you can consolidate your debts into a single payment
Debt consolidation loans
These are peer to peer lenders and traditional banks that provide debt consolidation loans to people like you who can no longer handle their multiple debts.
It is made for those who want to pay off multiple debts with huge interest rates.
You can also leverage on Home equity line of credit or Home equity loans to consolidate debts.
You can also consolidate your multiple credit card debts into a new credit card. This can be a good choice if the new card charges little interest or none whatsoever.
The Bottom Line
Getting yourself into a huge pile of debt isn’t the end of the world, there is always a way out.
Get in touch with Debt Relief Association for a Free Debt Review and be rest assured that there are No Up-front Fees.
We help people regain their financial freedom.
Contact us Today!