Credit consolidation is becoming increasingly popular by Americans as our economy continues to spiral down a path that none of us wish to travel. Without the economic growth we keep on waiting for, more and more of these services are being opened every week within our country today. For those people out their struggling with debt, stick around, as we will be discussing the 4 various ways being used today to help consumers get back on solid ground once again.
Let’s start right out of the chute by discussing refinancing or HELOC (home equity line of credit) in order to achieve credit consolidation. It wasn’t that long ago that this was arguably the front-runner in strategies used by consumers, my how times have changed. Homeowners found it to be an extremely viable option when home prices were skyrocketing and loans were not difficult to obtain. Talk about crashing and burning, wow. It seems as though we did a complete 360 in record time. With home values decreasing and loan requirements becoming more stringent, this option is not as viable as it once was. I suppose now would be a good time to tell you something about this that does make people worry even if they would have no problem securing a loan (you just knew this was coming, didn’t you). Using this method could ultimately put you in danger of losing your home if something unfortunate should happen to you, as well as ruining your credit along the way. If you are considering this as an option please look at the whole picture before deciding.
Relax everyone, the next method of credit consolidation will not hurt a bit, I promise (does debt settlement sound familiar to anyone). The relative ease of joining them compared to some of the other credit consolidation services makes this one a very attractive alternative. Consumers will be granted several outstanding benefits after they have enrolled into a program. You know those stinking late fees and interest charges that have been adding up on your account, they will be cancelled, meaning a big part of your debt will simply disappear into thin air. Just that alone will cause a ripple effect that you will appreciate. Lets see now, lower and more manageable payments every month to start with, that will work. Which of course means you get out of debt much sooner than you ever dreamed possible, I think that will work as well. Are you starting to see the big picture here? Good, now lets move on. Unfortunately, it is that time again. There is a downside to this as well. As long as you are in the program and have not actually completed it, you can expect to take a hit on your credit rating. It is not as bad as the alternatives though, meaning bankruptcy. There is a light at the end of that tunnel. After the successful completion of your obligations, your credit rating will go back up to a happier time.
Another way people are using credit consolidation to help with their finances is through a DMP or debt management plan. The following are just a few of benefits you should receive. They include a reduction with your interest rates, those phone calls you have been getting will end, and your debt will be combined so you will only be responsible for making a single monthly payment. It’s also important to note that while you are employing these types of credit consolidation services your credit will not suffer (meaning your rating or worthiness). In case you are wondering, consumers usually are debt free within a 5 year period.
Now it’s time to talk about a way of credit consolidation that many people just don’t like for many reasons. Personal loans would be what I am talking about here. People just don’t clamor to this one because of the difficulties involved in obtaining one, plus since they are unsecured you cant always get the amount you need. It’s riskier for the lender with this since you are not going to be putting your house up for collateral. The consumer will pay higher interest rates as a way of off-setting this. It’s not to difficult to understand why I put this method last and why it’s probably dead last as far as which ways are the most consumer friendly. Although not having to use your home as collateral is a pretty big advantage though. If you’re trying to regain control of your finances then you may want to check out at least one of the 4 credit consolidation services or methods we just discussed.