Debt Consolidation

Debt consolidation is the replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. In other words it is a loan used to repay several loans.

Any type of loan can be wrapped into the debt consolidation process. Common types include finance charges, overdraft charges, personal loans, credit cards, late fees, medical bills, back taxes, utility bills and store cards. There are thousands of people every week who recognize that their credit situation is less than desirable. Many of these people seek out a solution and find it in debt consolidation. It allows you to reduce your monthly payments into a single, simple bill, while lowering your interest rates and helping you pay down your debts more quickly and easily. Debt consolidation loans are essentially a type of refinancing. With your debt consolidated and restructured into a single monthly loan payment, you’ll see, your debts disappear, your monthly payments go down, and have the chance you deserve to turn over a new financial leaf.

A good debt consolidation service can help you get back on your feet, and that is something you may already know and be ready to look at. Many people are not even aware of what a debt consolidation service does. In order to get your debt under control, the best thing you can do is call all of your creditors and let them know that you are having trouble. That is where a debt consolidation service steps in.

Benefits of Debt Consolidation


  • Lower your monthly payment 30% – 50%
  • Stop the late fees and over limit charges
  • Can put an end to the harassing phone calls
  • Extremely convenient – especially for individuals with several creditors


Dangers of Debt Consolidation


  • If you have poor credit you can expect to pay a higher rate.
  • Consolidation may not be a smart move because monthly savings are marginal




  • Search for the debt consolidation service that is right for you.
  • Make sure you take time to educate yourself and get comfortable with any service you choose to use.
  • Budgeting may also be an area in which improvements can be made.
  • It may require giving up all credit cards and learning instead to save money for purchases, emergencies and retirement.
  • Prior to obtaining a debt consolidation loan you should calculate the savings.


Before signing for a loan, make sure you read and understand the loan agreement.

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