What is debt consolidation and how does it differ from debt settlement?If you have asked yourself that question, then you may be facing a mountain of debts, credit card bills, or other loans that are making your life very difficult. You should think about paying it all off by taking out a debt consolidation loan.Perhaps you should consider a debt consolidation loan. Debt consolidation means obtaining one loan to pay off several other loans.
Here's the way it works; borrow a sum of money from a bank, and you use that loan to pay off all your outstanding loans. Be sure that the consolidation loan has a lower interest rate than the biggest loans that you're paying off. That should make your monthly loan payments smaller.
But you do have alternatives. Apart from a debt consolidation loan, there are important changes you can make to reduce your overall debt.An initial step is to stop incurring credit card debt. Cut up the credit cards; at least put them out of sight.
You can also hire an attorney or a debt settlement company to do the negotiating for you. But with these companies, you never eliminate the debt completely, and you may find your credit rating suffers from the experience.A debt consolidation loan is a great way to take charge of your own finances and manage your own way out of debt.
Also, a home equity loan is much more difficult to discharge in bankruptcy, because the loan is secured against your house. If you are considering bankruptcy at all, a debt consolidation loan is probably not a good idea, and a home equity loan would be the worst idea.
Here's the way it works; borrow a sum of money from a bank, and you use that loan to pay off all your outstanding loans. Be sure that the consolidation loan has a lower interest rate than the biggest loans that you're paying off. That should make your monthly loan payments smaller.
But you do have alternatives. Apart from a debt consolidation loan, there are important changes you can make to reduce your overall debt.An initial step is to stop incurring credit card debt. Cut up the credit cards; at least put them out of sight.
You can also hire an attorney or a debt settlement company to do the negotiating for you. But with these companies, you never eliminate the debt completely, and you may find your credit rating suffers from the experience.A debt consolidation loan is a great way to take charge of your own finances and manage your own way out of debt.
Also, a home equity loan is much more difficult to discharge in bankruptcy, because the loan is secured against your house. If you are considering bankruptcy at all, a debt consolidation loan is probably not a good idea, and a home equity loan would be the worst idea.
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