Basics of Debt Consolidation Services Available

Because large amounts on your credit cards and other bills are very stressful situations. Every penny of your salary is allocated before you even cash it, you have a collection agency that calls you both at home and at work, and you constantly have to worry about making ends meet. At worst, with a very high interest rate that you pay, it could take 15 years or more to pay off your debt. But you can change all that now by utilizing a debt consolidation service.

Debt consolidation services are designed to help you get back up quickly. Although the specifics vary depending on the nature and level of your financial problems and the debt settlement or credit counseling company that you are taking part in, most debt consolidation services operate to get you out of debt quickly. Debt assistance providers will review your financial picture details and explain if, how, and where they can save you money. If you like what you hear and if you agree to pay the fees they charge for their debt consolidation services, the company will go to handle your case.

If you choose a debt settlement company, you can get a negotiated settlement of your credit card debt with significant savings on your current balance. Debt settlement allows you to reduce your monthly payments (sometimes cutting payments in half), free up debt quickly, save up to half of your debt, and avoid bankruptcy. Sounds too good to be true? Yes, there is a trade-off in the debt settlement program: your credit rating will be hit, because you will be reported as a delinquent for the duration of the program (the average time is three years).

On the other hand, credit counseling does not affect your credit score. But be careful, credit counseling will be listed on your credit report, and many lenders don’t like to see you have to seek third-party help for your debt. The great benefit of credit counseling is the reduction in interest rates on your debt which lowers your monthly payments.

Another benefit you will get from a debt consolidation service is the ability to make a single payment every month to pay all your bills, rather than having to juggle ten or more of your own payments. This will be much more convenient for you, and you will always be right on top of your payment, rather than worrying if you send all bills on time.

Many companies that offer debt consolidation services can also help you get a loan to pay off your balance. Loans can be secured or unsecured. Guaranteed loans usually use real estate as collateral, so you can only get this type if you have a house or other property. If you are a renter, you must get an unsecured, or personal loan. Because you will not provide any collateral for this loan, you can expect to pay a higher interest rate than a guaranteed loan.

As you can see, debt consolidation services give you many choices to choose from. A good debt consultant can explore all your alternatives, and help you choose a solution that meets your financial goals. By taking advantage of professional debt consolidation services, you will be able to regain control of your personal finances and end your money problems forever.