Debt consolidation is the process of combining all of your unsecured debts into a single monthly payment by obtaining a debt consolidation loan. The loan is used to pay off your debts, then you pay off the new consolidation loan rather than dividing your payments to your creditors. You may be able to take out a debt consolidation on your own using a home equity loan or a debt consolidation loan from a bank.
It Does Not Reduce Your Debt
After consolidating your debt, you may feel like your debt burden has been lifted. However, it’s important to remember that you still have the same amount of debt as before. Now, instead of having multiple accounts to pay, you have just one. This may ease the stress of managing multiple payments, but it doesn’t mean your debt has lessened.
Be Alert
It’s easy to run into a debt consolidation company that may push you to get a high-interest-rate loan that costs more in the long run than paying your debts off on your own. Other companies pocket your monthly payment instead of sending it to your creditors, leaving you with damaged credit. It’s important that you evaluate debt consolidation companies and their products carefully so that you don’t end up in a worse situation than when you started.
Many people who consolidate their debt often end up with new debt within a short period after consolidating. What’s worse is they have this new debt on top of the debt they’ve consolidated, which compounds the debt problem. It happens because consolidating debt often frees up available credit, and many people cannot resist using it. If you consolidate your debt, it’s better to close your old credit card accounts and focus only on paying off your consolidated debt.
VS – DEBT SETTLEMENT OPTION
With the option of debt settlement, your debt settlement company negotiates with the lender to agree upon a settlement balance often less than what is owed, to repay the debt. This form of relief is less harmful to your credit score than bankruptcy and can offer some immediate relief from financial pressure drastically lowering your monthly payments.
Which debt relief option is best for you? For many, the answer is debt settlement. But is that the best option for relieving credit card debt? It’s important to review all your options and make the best decision based on your financial reality. Getting a Free Debt Analysis of your financial situation is important in understand which option might be best for you.
National Financial Relief is one of the most dependable debt settlement companies in the nation. We are made up of smart, compassionate and energetic people who genuinely want to help you get out of debt.
Clients who are able to stay with the program and get all their debt settled realize approximate savings of 50% before fees, or 30% including our fees, over 24 to 48 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete our program for various reasons, including their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. Read and understand all program materials prior to enrollment, including potential adverse impact on credit rating.
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See how much you can save every month — with your personalized plan from National Financial Relief.
See how much you can save every month — with your personalized plan from National Financial Relief.
