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Advice on debt consolidation

advice on debt consolidation

Definition

Debt consolidation is the bundling of several payments into a single, typically lower, payment. There are two ways to do this. One is to incorporate all your payments into a single loan that pays off the outstanding balances. The other is to go through a debt consolidation or credit counseling service. You then pay the service one monthly payment, which they distribute for you.

Services

Debt consolidation or credit counseling services are solid options for those who do not own a home or have credit issues that would prevent them from qualifying for a loan. These services negotiate better terms with your creditors, such as lower interest rates, lower payments or an extended payment period, which they get in

return for assuring the creditors that they will get their payments on time. To ensure your cooperation with the negotiated payment schedule, you send a payment that covers all the negotiated payment plus a small monthly fee to the service. They then make the on-time payments for you on your behalf. These payments are typically lower than the combined original payments due to the service's negotiations.

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Debt can have a negative affect on every aspect of your life. The stress of being in debt can overwhelm your family.

There are many creative ideas for debt consolidation. Get debt consolidation ideas from a registered financial consultant (RFC) in this free personal.

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