Consumer Credit Card Debt Consolidation - a Solution

By: Apurva Shree

If you find yourself trapped in credit card debts, the best solution is to go in for consumer credit card debt consolidation. Too much debt on credit cards can however take the magic away from this loan.

Debt consolidation is to combine all your existing loans into one single manageable loan. This can pay off your debts, save your money on interest rates, stop those harassing phone calls, and help you get out of your debt, without declaring bankruptcy. Debt consolidation helps to restructure your loan, plan your monthly installment, and save the dollars on interest rates. Such timely payments will also improve your credit score.

Advantages Of A Consumer Credit Card Debt Consolidation Loan

Getting a consolidation loan is easier for those with a property. The consumers can use the property as security and avail a secured credit card debt consolidation loan. However, this is not useful for non-property owners, as they usually end up with higher interest rates.
Unsecured debt consolidation is convenient in its own way.

The consumer need not place any security against the loan and have the fear of losing it for he fails to return the loan. Though it carries a higher interest rate than a secured loan, this is however lower than his credit card debts. This unsecured debt consolidation is very effective tool to make the payments on time. By gradually paying off the loan with the interest, the borrower will soon erode the entire loan and become debt free. The unsecured loan is however given for a smaller amount. If the amount of the debt is not very large, this unsecured loan will be very effective.

Consolidation Companies

Many consolidation companies and banks provide debt consolidation. It is important to do a study and find out which company offers the lowest rate of interest. It is also essential to understand your feasibility with monthly payments.

There is also the option of taking a debt consolidation package offered by these companies. They will assign a debt counselor, who will review your financial situation for you. This will give you a clear understanding of your debt situation and can you can then avail the various debt reduction programs offered by them. There are also non-profit options offered by the credit card debt consolidation companies, if you cannot afford the fees charged by the experts.

The counselors, after devising a debt reduction program, will negotiate with the creditors and obtain better terms and rates for you. They might ask you to make a single payment to them, covering the total amount of debts at lower interest rate. The company then pays the various creditors as per their shares. Hence, it is important to identify the right company, who can help you bring your entire debt burden down.

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