Consolidating Your Debt

Many people turn to debt consolidation to help them get out from under the heavy burdens of financial debt.  This process happens when numerous outstanding debts are consolidated into one amount, usually with a lower or fixed interest rate.  Essentially, you are taking on one new debt to pay down the numerous debts you had in existence prior to going through the consolidation process. 

Repayment is simpler after consolidation, as you will only have one bill a month to deal with.  Typically, debt consolidation is advised for those who have very high amounts of credit card debt because interest rates on such debts are usually high.  Be sure you know the basic stats on a company before agreeing to consolidate through their organization.  Being informed is one of your greatest weapons in fighting down debt.

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Avoiding Debt Consolidation Scams

Unfortunately, many companies who advertise assistance in debt consolidation are hoping to take advantage of you and your situation.  In some cases, companies will charge extremely high fees to take you through the consolidation process.  The practice of predatory lending is also common. This occurs when a consumer goes to a company to consolidate his or her debt but is not aware of common practices regarding debt consolidation.  The consumer may not know of other lenders or companies with lower rates or what the industry standards are.

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Effective Debt Consolidation Techniques and Outcomes

There are ways to reduce and consolidate your debt without ruining your credit score.  The easiest way is to be sure you will be able to make the minimum monthly payments on your newly consolidated debt.  Consistently making your monthly payments is the first step to improving your credit score.  Legal experts, like debt reduction attorney Leslie H. Tayne in New York, emphasize the importance of being able to improve your credit score while reducing debt through consolidation.  By meeting your new, lower monthly payments after consolidation, you will pay less over time, repay your debt(s) faster, get rid of high interest rates and late fees, and finally free yourself from the stresses of debt.

Another debt consolidation technique is a balance transfer.  With a balance transfer, you negotiate to move all the debts from your credit cards onto one with the lowest interest rate. 

You can also consider taking out a home equity loan to consolidate your debt, turning your home into collateral during the repayment process.  This is a risky option, but if you meet your repayments (both for the debt and the loan) on time, you will be able to avoid an accumulation of interest. 

Turning to a credit counseling company is also another option to consolidate your debt.  In paying them, they will help you distribute the payments to your creditor(s) while providing you with healthy spending instructions at the same time.  When you’re struggling with the burdens and turmoil of skyrocketing debt, know that you do have options for help.  Getting yourself on the road to financial freedom and independence is possible, and by working to reduce and consolidate your debt, you are working in the right direction to making your debt-free dreams a reality.

Debt Consolidation Companies:

1. California Consumer Credit, Los Angeles, CA (323) 667-9999
2. Credit Card Management Services, West Palm Beach, FL (561) 472-8000
3. Johnson & Associates, Ingleside, IL (847) 546-1077
4. First Home Equity Mortgage, LLC, Irwin, PA (724) 864-3267
5. Debt Cleaners, Metairie, LA (504) 454-6548
6. Universal Collection & Debt, Albany, NY (518) 452-3402
7. Atlantic Federal Credit Union, Richardson, TX (972) 509-3995
8. Consumer Debt Counseling, Memphis, TN (877) 877-1995
9. Heartland Home Financial, Cincinnati, OH (513)771-7811
10. Countrywide Home Loans, Portsmouth, NH (603) 334-4600