Debt consolidation has confused many consumers because there are actually two types of debt consolidation programs out there that are very different from one another. Debt consolidation run by a credit counseling company (read more about credit counseling) and debt consolidation loans
Debt consolidation loans. A debt consolidation loan is a strategy where the person in debt takes out a loan usually against their home in order to pay off high interest credit cards. There are a number of dangers with using a debt consolidation loan. If you are unable to pay your monthly loan minimum the lender will repossess the asset backing the loan - YOUR HOME! Foreclosure proceedings can start in as little as 30 days of being late on your payment. Now you have just turned a credit card debt problem into a nightmare. Debt consolidation loans will only work if you can qualify for a low interest loan. If your interest rate is fairly high then you will see very little savings. If the repayment terms of you debt consolidation loan is over 15-30 years then you will ultimately pay MORE for your debt! If you take out a loan, but continue to run up your credit cards you may be back in the exact same credit card debt situation within a couple years, but this time you wont have any equity in your home to take out a loan on. Debt consolidation loans are only a good strategy for people who have solid employment, the loan only uses up less than 10% of the equity in the home, and they have learned their lesson about credit card debt and will change their spending habits. Hopefully they will rip up all but one LOW limit credit card that can be used for emergency purposes only. If a debt consolidation loan is not for you, you should consider solving your debt problems head on and immediately. Our debt relief program can reduce the amount of debt you owe by up to 50% sometimes more so that you can pay it off completely! This is real debt relief.
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