Debt Consoldiation: Learn The Pros & Cons
Sunday, November 8th, 2009 Subscribe To Our Feed
There is no shortage these days of debt consolidation companies advertising their debt consolidation programs on TV commercials. The reasons are clear: credit card debt is definitely a big issue at the current time. Even thought financial experts seem nearly unanimous that the U.S. recession has “technically” ended, there are still an awful lot of people who are suffering financial hardships and who continue to struggle.
But is debt consolidation really the answer to credit card debt? Can it help consumers reduce their debt load and greatly improve their quality of life as the TV commercials tell us? Or is debt consolidation not all it’s cracked up to be? And if so, are there better programs and better solutions to the issue of credit card debt in America today?
In order for consumers to be able to make an informed decision, they need to have a good understanding as to what debt consolidation is, and how it works. Debt consolidation is the consolidating (combining) of multiple loan (credit card) payments into one payment. This new single payment is lower than the sum of the previous multiple loans. This is achieved through lower interest rates and better payment terms.
Debt consolidation may often involve a “debt consolidation loan”. This is almost always a home equity loan. But consumer beware: a home equity loan is a secured loan. If the consumer who takes out a home equity loan as part of a debt consolidation plan they risk losing their home if they are unable to make their payments at some time in the future.
What is a better form of debt relief? It is clear than when it comes to debt relief, the one program that achieves the greatest results in the least amount of time is Debt Settlement. This program works with a debt settlement company negotiating with the consumer’s creditors. The goal of these negotiations is to obtain a settlement agreement for a much lower amount than what was originally owed. Debt settlement can almost always achieve debt reductions in the amount of 50%, and very often - 75%.
It can truly be a debilitating and demoralizing thing. The good news is that there are indeed debt relief programs that help consumers reduce and eliminate credit card debt, and in fact - kiss it goodbye, once and for all.
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