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The debt consolidation program
The program credit counseling has always sparked interest in consumers in regards to debt relief. The mere thought of having all credit card bills consolidated into one easy payment, with a lower interest rate, while reducing the payment amount and becoming debt free in just a few short years almost seemed too good to be true. After enrolling in one of these programs, I soon found out that this solution had a great deal of benefits. As both a journalist and a client, I will explain to you a few of these benefits and how consolidate debt may be able to help you manage your credit cards a bit better.
Remember, the credit counseling programs (also known as debt relief, or debt consolidation) has grown increasingly popular over the years, especially with today’s economic situation. When enrolling into credit counseling, you will find lower interest rates, lower monthly payments, reduced or even eliminates fees and most importantly debt relief in just a few short years (as opposed to two years for every thousand dollars you owe).
Here are a few key benefits to consolidating
- One monthly payment.
- Reduced or even eliminated interest rates.
- Reduced monthly payments.
- Debt freedom in just a few short years.
- Of debt settlement, debt elimination, and all the other programs it’s the only solution that is not factored into your FICO (credit) score.
A break down of consolidation
- What is a credit counseling program?
Also known as a credit counseling program, it involves the use of a third party that redirects your monthly payment to your creditors but on new terms. By going this route, you will obtain a lower monthly payment, lower interest rate and become debt free in just a few short years. Usually, those administering these types of services are 501(c)3 nonprofit agencies. Unlike debt settlement, debt elimination, or other debt relief type programs, to consolidate through credit counseling is one of the only programs not determined into the consumers credit score.
- When is it good to enroll into a debt consolidation program?
Are you struggling to keep current? Do you constantly fall behind? Let's say your current every month and never miss a payment, do you feel like your balances are NOT moving? If this is the case, then the time to receive a debt consolidation quote is now. It doesn't matter how great, or how poor your credit is. If you feel like your trapped, you probably are. Receiving a quote is fairly quick, and confidential.
- What bills can you include, and what bills must you exclude?
You can include the following types of debts:
- Credit card debts
- Unsecured loans
- REPO's
- Personal loans
You cannot include the following types of debts:
- IRS / Federal, State or Property tax debts
- Student loans
- Collection accounts (this requires debt settlement, review our debt settlement section)
- Secured loans (mortgage, car payment, etc)
- How do you benefit from a consolidation?
The major key benefits to debt consolidation, would be that of obtaining a lower monthly payment, lower interest rate which in turn helps the consumer become debt free in just a few short years - as opposed to two years for every thousand you owe (example; $10k = 20 years). The credit counseling programs, are by far the most beneficial program of all debt relief programs in the debt industry. We urge you, to obtain a free debt consolidation quote and see what could be done in order to help you become debt free.
- How do you find the right company, to consolidate this debt?
Companies such as consolidate debt, pride themselves on providing such in depth information as you can see here. We have nothing to hide, and feel the best decision is an education decision. If we had to think of a downside to this program, it would be the monthly fee. But when consumers are paying $200, $400, $600 or more in credit card debts per month and 50 to 80% of these payments are going toward finance charges and fees - this shouldn't make or break the decision making process.
In addition, finding a company that requires such in depth information such as account numbers, requires statements, etc. is a good sign. After all, some people write fours to look like nines, or fives to look like sixes on the creditor information forms. Having your statements on file, eliminate the possibility of rejection and increases accuracy. The last thing you would want, is to have your file boarded at servicing only to be rejected due to a minor flaw in paperwork. If you have your statements (or can obtain them within a few weeks), your transition into a credit counseling program will be an easy one.
- What should you expect in a debt consolidation program?
Do expect to gather, or request your statements as they will be required by the company to eliminate any possibility of rejection. Do expect to see lower interest rates, lower minimum payments, and debt freedom become a possibility in just a few short years.
- How does debt consolidation, differ from debt settlement and other programs?
Debt consolidation (again, also known as debt management or credit counseling) differs from debt settlement in the way that your creditors are kept current. Debt consolidation lowers your monthly payments, interest rates, and helps you become debt free in just a few short years. Debt consolidation, works on paying your balance in full. Debt settlement, and other similar programs work on having your balance cut in half. As you make minimum payments in those type of programs, they go into a trust account. As they accumulate in value, it is at that point when your creditors are settled. So for example; if you had a credit card at $10,000 when the payments you made accumulated $5,000 in trust that is when the company would propose the offer to that lender. Debt Settlement, should be avoided if your current with credit card debt. Debt consolidation, is by far a more reputable solution and again works to pay off your entire balances while maintaining your credit.
- What other options do I have?
Well, several solutions do exist. Above, we've explained how both debt consolidation and debt settlement work. Other options such as Chapter 7 or Chapter 13 bankruptcy can be considered. But with the new laws passed on October 17th, it's more difficult to pursue those routes. Most consumers, often have mortgages and get loans against their home (also known as a debt consolidation loan). To be honest, you couldn't make a bigger mistake. Why turn unsecured debt, into secured debt (through your home) and put your home at risk? So not only would you still not get anywhere, but the possibility of losing your home is extremely high.
- Do I even qualify?
To qualify for a debt consolidation, you must have at least $3,000 in unsecured debt, preferably credit cards. The average interest rate must be at 12% or greater. Most consumers are usually in the high teens, or high twenties. So given you hit this criteria, give consolidate debt a chance and see what could be done in order to help you become debt free.
Hopefully this article has been informative. Should you have any questions pertaining to debt consolidation (debt management / credit counseling), feel free to contact consolidate-debt by filling out the form above or below this article. I hope this program would be as useful, and successful as it was me.
Additional resources to debt consolidation
- Debt Consolidation Benefits
- Frequently asked questions (comparison)
- The top 5 questions about debt consolidation
Additional Resources:
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