DEBT CONSOLIDATION
Debt consolidation loans are for the purpose of combining
your outstanding debts into one loan and one payment.
Reasons to consolidate all your debt
-One monthly payment creates convenience.
- Many people have payment problems. Some of the consolidation
programs help you reduce your monthly payments.
- Certain programs help you manage debt like credit cards. In some
cases you can reduce payments and interest rates.
Things to consider
Be aware that these programs do not reduce your
current debt
- A few people think, with lower monthly payments they can add
more debt. This is a big danger to avoid.
- Also be aware some programs can actually raise your total
interest paid.
- Many times lenders will require you to get a home equity loan to
qualify. If you're already having payment issues this could be
another pitfall. You could actually lose your home if you do not
manage your payment properly.
Finding the right consolidation program
- If you have a good relationship with your local bank or credit union,
this is your best option.
- If you don't have a good relationship with a local lender, look for
other lenders who do not know you.
- Watch for offers by mail and television. (Be careful many of these
companies are just fishing for someone to trap.)
- Search the internet.