Consolidate Credit Card Debt
In the state of New York as well as in other states across America, many consumers are overwhelmed with high credit card debt and need to consolidate it, and other types of unsecured debts like medical bills, utilities, or department store charges. For many of them, it is a constant struggle to make ends meet, much less make their monthly debt payments. If you are experiencing your own debt crisis, you might be interested in how you can get relief if you consolidate your debts.
Debt consolidation, or a debt management plan (DMP), is a popular debt relief options that allows you to combine multiple high-interest credit card and unsecured debts, and combine them into one, more structured, and more manageable monthly payment made to a credit counseling agency. When followed faithfully, debt consolidation can offer a more predictable and more accelerated path towards reducing one's debts.
While debt consolidation may be a wise move for some consumers, it is certainly not the only debt relief option available. These days, many consumers turn to debt settlement -- an option where they can negotiate with creditors for substantially less than what they owe -- as a form of debt relief. Others may consider taking out a loan to pay for their credit card debts. Just like debt consolidation, debt settlement and debt consolidation loans are popular alternatives to bankruptcy, which is also a form of debt relief, but has a more damaging and longer lasting effect on one's credit rating.
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Why Consolidate Debts?
In this tight economy, credit card debt has certainly become an unfortunate part of life that simply won't just go away...unless one takes steps to resolve it. If you are also looking for a viable option to reduce or manage your debts, you may be interested in how debt consolidation works:
Facilitated by credit counselors, debt consolidation typically begins with a review of your financial situation -- taking into account your income, debts, and other assets/property. When they have a clear picture of how much you owe and how much money you can reasonably allocate to paying off your debts, credit counselors will typically develop a game plan and contact your creditors to submit proposals -- proposals that may include reduced interest rates and the waiving of late fees and penalties.
Creditors that accept the proposals become part of the debt management plan (DMP). Credit counseling agencies, in turn, distribute those funds to creditors that are in the plan. With a more structured and more affordable payment plan in place, you can, ideally, reduce your debts sooner than if you continued to pay only the minimum monthly payment on your credit card bills at higher interest rates.
To find out how consolidating your debts could help you manage -- and pay off -- debts, answer a few simple questions now and get a free debt relief analysis and savings estimate. Start now.
Debt Consolidation vs. Personal Loans?
These days, many consumers in New York consider debt consolidation loans to help pay off their credit card debts and other types of unsecured debts that they have accumulated over time. What they are essentially hoping to do is to combine their high-interest credit card and unsecured debts into one, lower interest personal loan. While personal loans may work for disciplined debtors, it is worth noting the potential risks:
A debt consolidation loan typically involves taking unsecured debt and paying it off with funds that come by way of a "secured" loan. Thus, it is generally a loan where you would have typically put up your home or other property as a form of collateral. If you fail to make your loan payment, you would have essentially put your home at risk. Another risk: In many cases, consumers who get a debt consolidation loan generally end up using their credit cards again and start ringing up new, high-interest charges. In this scenario, many of them will have new, high-interest credit card debts to deal with on top of their loan -- a scenario that one may consider going from "bad to worse.
In comparing debt consolidation to debt consolidation loans, debt consolidation may be preferable for consumers who want a simplified and more predictable path out of debt, which if followed faithfully, can help them pay down debts at an accelerated rate.
If you are ready to take the next step in putting an end to your debt crisis and start managing your debts, request a free debt relief estimate and savings analysis -- at simply no cost to you. Start today!