Stay away from debt consolidation loans
The credit card consolidation loan offers can be the most harmful way to clear your debt and should never be done. Never take on some new debt to pay off old debts it simply makes no sense. There are absolutely no positives for anyone when they do this. The debt consolidation loan still holds compound interest which becomes a never ending cycle of minimum payments. First the consumer would need to qualify for the loan and if there is already a debt problems qualifying for more credit will only harm their credit score. Another situation that will arise is that your current credit history will probably not get you a good interest rate. If the lender makes it sound good in the beginning do not fall for it. Within six month the chances that the interest rates as well as the minimum payments will skyrocket and you will find yourself in the same position or worse. Another thing to considering and most harmful part of the debt consolidation loan is that they are secured loans. Taking on a secured debt for unsecured debt is a serious move that should not be done if at all avoidable. Secured debts are debt that have collateral tied to them this means that you have to put up valuable assets in order to be approved. Making ones unsecured debts secured debts by attaching their home or other assets to it is a definite way to lose all that they have worked so hard for. The one and only beneficial program is the debt consolidation program not a debt consolidation loan.
Alternatives to debt consolidation loans, try a consolidation program
The debt consolidation program (also known as the debt management program) is the one and only debt program that can help with this type of debt problem. When doing the debt consolidation program you are not receiving a loan and you are not putting up any type of collateral. It is a debt program that is created for those consumers that need a way to keep up on their debts without harming their credit score.This is the one program that is not reported to the credit bureaus. When doing this type of program the consumer receives a lower minimum payment, as well as a lower interest rate and debt length. The consumer does not negotiate their balances in anyway so all original debts are paid in full just on new terms. When the minimum payments start going towards the principal balances the debts are paid faster and one credit score can improve as well. There is a big miscommunication when it comes to a debt consolidation loan and a debt consolidation program. Do the research and take the time that is needed when deciding your financial future. No one should ever jump into any type of financial situation without the knowledge of what it is that it can do for them financially. We are a trusting nation but asking questions and understanding the situation is our right as Americans.