Debt consolidation and Credit Counseling

Debt consolidationDebt consolidation can help you to replace multiple debts with a single loan or debt consolidation program. If you join a debt consolidation counseling program, you will get personalized advice from a certified advisor, who will help you to gain control over your finances.

The debt consolidation company will try to negotiate lower interest rates and longer repayment periods with your creditors, and you can make a single payment every month, instead of several small payments.

Debt consolidation services claim that they can help you to reduce the interest you pay or reduce your monthly payments. Many people think that credit debt consolidation services can somehow reduce the amount of money they owe, though this is not true.

A debt consolidation service will deduct a fee from every monthly payment you make. You will be responsible if the lenders are not paid on time, and you may end up in a worse position after some time. Many people feel that debt consolidation companies are in the business to make money, and they make you pay for doing something you can do yourself.

Use an online debt consolidation calculator to assess your options and talk to several debt consolidation services. Take time to check their credentials and reputation, and call up references to find out about the quality of service provided by them.

A debt consolidation loan can help you combine several debts into a single new loan with a low, fixed interest rate. If you have a home in which you have equity, you can get a home equity debt consolidation loan with a low interest rate.

You can also consider cash-out refinancing, which involves refinancing your mortgage for more than you owe. While a home equity loan is separate from your mortgage, cash-out refinancing replaces your mortgage. Cash-out refinancing usually has a lower interest rate than the original mortgage, though it involves closing costs, which may not be applicable on home equity loans.

Bear in mind that you risk losing your home if you not able to keep up with the monthly payments. Use an online debt consolidation loan calculator to assess your options.

You can get debt management counseling offered by the member agencies of the National Foundation for Credit Counseling (NFCC), a non-profit organization that provides free or low-cost debt management advice. The counseling services are confidential and can be offered in person, over the telephone, by mail, or online.

An online monthly budget planner can help you to gain control over your finances. Make sure that payments relating to necessities are covered and then pay off high-interest debts first. Avoid making impulsive purchases with your credit card and stay well within your credit limits.

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