Consolidation Debts take the total of all your individual debts and combines them into one. In theory, if you had six credit card loans with an average interest rate of 18%, a car loan at 12% and you financed your furniture at 11%, you could consolidate all that debt into one loan at a lower interest rate.
These services aim to settle your debts for less than you owe and when successfully completed, it is possible to get out of debt in as little as 12 to 36 months. Usually consolidation loans are taken out against some piece of property, most often your home, through a mortgage refinance or home equity loan,which is the major reason why the interests are usually low.
Sometimes, consolidation companies can discount the amount of the loan. When the debtor is in danger of bankruptcy, the debt consolidator will buy the loan at a discount. A prudent debtor can shop around for consolidation firms that would pass along some of the savings.
However, there are some debt consolidation programs that may do you more harm than good. They may put you into more debts and give you more worries in the long run. So, if you really want to experience a healthy financial relief from your debts, don’t apply for any debt consolidation program until you learn how and where to secure genuine and trustworthy consolidators that will truly satisfy your needs; otherwise, you might end up burning your fingers and get yourself real hurt.
My subsequent posts though will be treating various vital aspects of debt consolidation loans that can help you to make an informed decision on the kind of debt consolidation program that will adequately address your need for debt relief. So, do well to exploit all the resource materials you will find on this blog in your quest for a truly satisfying debt consolidation program.
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