Debt Consolidation

Consolidate debt and free yourself

If you have past due, delinquent or outstanding accounts with multiple creditors, you know just how difficult it can be to keep your head above water. It can be hard to keep track of who you owe, what you owe them and when you owe it by, to say nothing of the hundreds or thousands of extra dollars you're racking up in interest charges and late payment penalties from multiple sources. If this sounds like the kind of situation you're in, debt consolidation may be an option to consider.

A consolidation loan is a debt relief instrument which allows you to resolve your outstanding debts into a single account. They are offered by specialized financial institutions to help people get out of debt faster than most other available options.

How to Consolidate Debt

In this type of debt relief program, you will work with a debt counseling service to reach an agreement with all of your creditors. Your creditors will accept less than the total amount you owe them in exchange for immediate payment of the agreed-upon amount. When agreements have been reached with all of your creditors, a debt consolidation company pays your creditors off. You then become responsible to that company for the total amount of the consolidated debt, plus interest.

You then pay off the consolidation loan in monthly installments, which include both principal payments as well as interest charges. Once you have paid off the entire amount of your debt consolidation loan, you are free of obligations to all your creditors. With this strategy, you can become debt free much faster than you would if you paid down your individual debts over time. It gives you more financial freedom and the chance to rebuild your credit rating without resorting to bankruptcy.

Companies sometimes generate debt consolidation leads through consumer information research, and you may be contacted with opportunities to consolidate debt. However, it is imperative that you carefully select the company you work with, as you can be trapped in equally bad terms if you errantly choose an unscrupulous lender. Always research the lenders thoroughly to make sure they're on the "up and up" and can be trusted to stand by their claims.