For some individuals, credit cards are like a bag of chips; it is hard to stop at just one. Those same individuals who aren’t likely to be happy with just one credit card are likely to find themselves in debt. If you owe money to more than one credit card company, you are an ideal candidate for a debt relief procedure known as debt consolidation. What is debt consolidation? What do you need to know about it? Are there any pros and cons? Keep reading on to find out.
When you opt for consolidation, all your bills are brought together into one loan. Here is what you need to do. You find a good debt relief company online; you submit your information or application into their program. You need to gather information on your past debts and your current income. If you are admitted into their debt relief program, they will payoff your overdue credit card bills. Then, they create a new consolidated loan for you. Basically, the total of those bills was used to determine your new loan amount.
For most individuals, consolidation is much better than owing the credit card companies directly. For starters, you are in a legitimate debt relief program. There is no better help than expert help. Second, they paid off your creditors for you. This means that all those collection calls and letters you were getting will stop! Unless you fall behind on your consolidated loan payments (which you shouldn’t) those collection calls and letters are nothing more than a past memory.
It is hard to find a con or a downside to the debt relief process known as settlement. On your credit report, people or organizations who run a check will be able to see that you got a loan. They will notice that all your debts were paid off at the same time and that a new loan was created with basically the same total. With that said, you really don’t notice an impact on your overall credit score provided you make on time loan payments. This is very good news for you!
In short, you have a handful of debt relief options to choose from and most will accomplish your goal of improving your credit and getting your personal finances back in order. With that said, consolidation should always be examined if you owe money to more than one creditor. If you are in debt over your head, the best solution at this point is to obtain a financial settlement. However, you need a great deal of research before going with the first company willing to deal with your debts. Remember that it is imperative to get rid of your debt as soon as possible, since you never know what the economy will bring and when will it be too late to change anything.