Debt Crisis

Credit consolidation is the method ofis all about educating consumers on reducing credit card debt. Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, most commonly a house. In this case, a mortgage is secured against the house. The collateralization of the loan allows a lower interest rate than without it, because by collateralizing, the asset owner agrees to allow the forced sale(forclosure)of the asset to pay back the loan. The risk to the lender is reduced so the interest rate offered is lower.

Sometimes, debt consolidation companies can discount the amount of the loan. When the debtor is in danger of bankruptcy, the debt consolidator will buy the loan at a discount. A prudent debtor can shop around for consolidators who will pass along some of the savings. Consolidation can affect the ability of the debtor to discharge debts in bankruptcy, so the decision to consolidate must be weighed carefully.

Debt consolidation is often advisable in theory when someone is paying credit card debt. Credit cards can carry a much higher interest rate than even an unsecured loan from a bank. (They usually do) Debtors with property such as a home or car may get a lower rate through a secured loan using their property as collateral.Then the total interest and the total cash flow paid towards the debt is lower allowing the debt to be paid off sooner, incurring less interest.

Because of the theoretical advantage that debt consolidation offers a consumer that has high interest debt balances, companies can take advantage of that benefit of refinancing to charge very high fees in the debt consolidation loan. Sometimes these fees are near the state maximum for mortgage fees. In addition, some unscrupulous companies will knowingly wait until a client has backed themselves into a corner and must refinance in order to consolidate and pay off bills that they are behind on the payments. If the client does not refinance they may lose their house, so they are willing to pay any allowable fee to complete the debt consolidation. In some cases the situation is that the client does not have enough time to shop for another lender with lower fees and may not even be fully aware of them.

However our program does not issue a loan. Each creditor is willing to drop the interest rates on a case by case basis. Our consultations lead you to smarter budgeting, debt management plan, or if you are behind on payments and considering bankruptcy, debt settlement may be the cheapest and most effective solution for you. Debt Management plans are simply consumer credit counseling programs. You may one monthly payment where your money is distributed to your creditors. You continue to receive statements from your creditors as the payments are being applied so you can track it.

Consumer credit counseling is the exact same program of going over your expenses and income to determine how you can begin to resolve getting out of debt. If you are considering bankruptcy, you are required to under go credit counseling prior to filing.

The Debt Management Guys and girls are happy to provide a free consultation to determine if you need to enroll in a debt management plan. Many times we will tell you to simply work on budgeting better and send you on your way. Debt management plans are not for everyone, and sometimes debt settlement is a smarter alternative if you are already behind on your payments. The key to managing your debt is having a plan and sticking to it. Setting aside an emergency fund of $1000 is critical to anticipate unexpected events.

Our Debt Solution is our ultimate goal to help you get on the right track to financial freedom. With pre-negotiated interest rates as low as 5.9% depending upon the bank, we can help. Our debt management for credit card (s) is the exact way to help you get out of debt.

Do you bank with any of these creditors? Look what we can get your interest rate down to:

  • Capital One 7.4%
  • Bank of America 9.9%
  • Chase 6%
  • Juniper 5.9%
  • HSBC (Household Bank) 9%
  • Wells Fargo 7.3%
  • US Bank 7.4%
  • and many more! Contact us to find out how low your rate can go.

It doesnt' matter how you got into debt. We can help you eliminate your debt in a time frame that works for you. Our Debt Management Program can help you do exactly that. For a no cost, no obligation quote on your financial situation, contact us now.


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