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Before you decide to consolidate your debt, you should know that not all loans are created equally.
Some types of debt are better suited for consolidation than others.
As a disclaimer, we offer ads from lenders, but we make sure that doesn’t impact the advice we give.
Credit card consolidation is the process of taking several outstanding credit cards and merging them into one single loan.
The goals for consolidating debt would be the simplify the payment process (having to only pay one lender instead of dozens), and hopefully reduce your overall interest expenses by getting a new loan with interest rates lower than any of the individual loans you’ve consolidated.
As a debt counselor, I receive many calls from people looking to escape a bad debt situation by seeking a new loan.
Chances are good if you’re reading this article, you’re trying to regain control over your debt situation.
And if your experience resembles mine in any way, then you’ve also realized when you Google Credit Card consolidation, most online content comes from biased companies peddling you their services–something that just doesn’t inspire much confidence in their advice.
Please note that an individual can settle his/her debt on their own as well. They then negotiate with your creditors to reduce your overall debt amount, and use the money they have been saving up for you to pay off that debt.Mortgage – Mortgages are considered secured loans, which means that the bank is using your house as collateral for giving you the loan.If you don’t make your monthly payments, then they repossess your house.Pros: You can get out of debt within 2 years and pay as little as 27% of your original debt, although it averages out to be around a 55% discount Cons: In order to get your creditors to be willing to negotiate, you’ll have to let your bill payments fall behind.If they aren’t already behind, this could have a big impact on your credit score.