Consolidation Debt

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Some Dangers of Loan consolidation Debt Strategies

Although a lot of people believe that paying down their debts by the use of a consolidation debt technique is the best route to obtaining themselves out of a poor situation others believe there are just as numerous dangers to that answer as there are benefits. Everybody is trying to consolidate debts they have accrued because the interest rates are currently so low. They believe that by getting a loan to pay off past bad debts, which are likely at a higher interest rate, they’ll pay off the new loan while freeing themselves of previous debt. The problem is that even if your goal is to consolidate as well as pay off your debts you may get lost in your try to payout

One of the biggest risks when trying to combine debt is using your home, and its value, because security against this brand new loan. If you get into trouble and find that you are having trouble in making the new payments you could have your home obtained by the bank. Many people are sold on this thought after being told that they can secure their particular loan with their home and obtain tax breaks at the same time. This is an appealing idea to a lot of people who are looking for a way to avoid it from the weight of enormous debts and think this will be their solution. It is an answer, simply not necessarily a good one.

Other available choices to consider when you must pay back money to several different resources and are trying to pay back these outstanding financial obligations, at several different excessive charges, is a debt consolidation loan. It is indeed much more convenient to make one payment monthly as opposed to several spread throughout the month. The question is will you save money applying this consolidation debt strategy or are you merely making it easier to remember to pay for one place. If this sounds like the choice you are going to help make be sure to look around and obtain the best rates using the best terms. Examine what you are paying out month to month and how much a person’s eye is costing a person. If there is no security, you have not used your home to secure the actual loan, and then the interest rate is going to be higher so investigation this option carefully before making your decision.

Comments: 55

  1. Orlando March 22, 2013 at 8:48 pm Reply

    I have several small laons, and I would like a debt consolidation loan, but I have bad credit and no collateral. Can anyone recommend a service or program?

  2. Lesley April 2, 2013 at 12:40 pm Reply

    What are the reason or factors of someone to get denied for debt consolidation. With all the bills, by doing the math it is clearly that money coming in, is not enough for the money coming out. I’m thinking of applying for debt consolidation, but what if they don’t accept it. I’m running out of options. Bankruptcy would be last on my list. Please I need help/ advice. Thank you.

  3. Carrie July 5, 2013 at 9:23 pm Reply

    Can you use a debt consolidation company if the credit card companies have already sold your accounts to collection agencies?

  4. Rey July 20, 2013 at 6:35 pm Reply

    In a debt consolidation program is it likely that you will be able to obtain additional credit?

  5. Willena August 17, 2013 at 7:26 am Reply

    I have $7,000 in debt and I have heard about debt consolidation. Does this negatively affect your credit rating? Do you get to choose how much you pay monthly or is there a set amount they make you pay? I live in Canada, if that matters.

  6. Joycelyn September 6, 2013 at 3:24 am Reply

    I have two credit cards that I have used over 5 years ago and never paid back. The total of the two cards FIVE YEARS AGO was $1000. Of course, by now, it should be close to $3000 because of all the interests.

    What does debt consolidation do? More importantly, can it REALLY remove or reduce the interest that built up over the last 5 years?

    When doing a search for debt consolidation services, I get THOUSANDS of results. Which debt consolidation services are better?

    Detailed answers would be appreciated.
    Update: Am I correct to assume that if I leave the debt as it is, I can have it completely wiped off my credit card two years from now as if it never happened?

  7. Sidney September 27, 2013 at 1:16 am Reply

    I would like to know what types of places will help with a consolidation loan of debt?

  8. Deedee October 6, 2013 at 7:36 pm Reply

    I am planning for a debt consolidation loan. I want to know the benefits of the debt consolidation loan.

  9. Chas December 23, 2013 at 3:07 am Reply

    If anyone has any experiences with good or bad in dealing with a debt consolidation company let me know. Would it be a good idea to have one help me if I have about 4,000 dollars in debt?

  10. Brett February 2, 2014 at 8:57 pm Reply

    Over the last few years I have accumulated about $6000 in debts from student loans and a credit card. For medical reasons I have been unable to make the minimum payments on both and am now being pursued by collection agencies.

    I approached one company regarding debt consolidation, whereby they would negotiate payments with both agencies. They quoted a reasonable settlement and it does seem to be a good way to end this, however, they request I sign over ‘ limited power of attorney’ to them.

    I’m wondering if this is an established, safe and wise way to deal with my debts, or if there are other options that I don’t know about ?

    Thanks for any advice offered,

    A
    I appreciate the responses, thank you for taking the time to give me advice. However, I should add that I live in Canada.

  11. Eboni February 2, 2014 at 8:58 pm Reply

    Can anyone gine me ideas on the best companies to get a debt consolidation loan with? I’ve also thought about doing the credit counseling thing. Which one is a better option??

  12. Virgil February 22, 2014 at 1:19 am Reply

    Can anyone recommend a good, legit credit card debt consolidation for the state of NJ. I need to consolidate a few cards and I always hear bad things about these services but i really need one payment for all cards. Any recommendations in NJ?

  13. Irwin February 22, 2014 at 1:19 am Reply

    i have approx $5000.00 work of credit card debt and i want to get rid of it. can anyone tell me a good company to use that has no fee. all that i have found tell me i need to have between $7500.00 & 10000.00

  14. Tessie February 22, 2014 at 1:53 am Reply

    My boyfriend lost his job recently and im falling behind on my credit cards, there is no way that i can pay rent, utilities and all of my credit cards, im already falling behind, can someone expalin how does debt consolidation works, Pros and Cons? what if i dont own a home, can i still qualify for debt solution? Any suggestions, im stressing, im already getting collection calls

  15. Brandon February 22, 2014 at 8:53 am Reply

    The programs that say you can eliminate up to 20,000 or so of ones debt.

  16. Steven February 22, 2014 at 8:53 am Reply

    I’ve been researching online and am interested in finding out if anyone else has used or can suggest a safe debt consolidation company. My mother in law isn’t sure where ot begin and frankly with all the scams I just want to be sure that the company I pair her with is a good one. So does anyone have a one that they previously used?

  17. Ronald February 25, 2014 at 3:37 am Reply

    is debt consolidation really works?
    i have 25k debts and decided call consolidation agency.
    is anyone out there used those agency before please give me advices. thank you.

  18. Eboni February 28, 2014 at 11:02 pm Reply

    I recently wed in Sept 08` since financial obligations to my ex-wife have taken their toll on my income thus affecting my ability to provide an even contribution to my new life. We have not been faced with this sort of debt… quite frankly never.I`m trying to do everything possible to save our home,I work 2 full time jobs,my wife works full time. between credit cards around 60-70k and a mortgage around $2200/mo ($329k owed),my wifes`DTI ratio to high,my credit score down around 610 thanks to my ex-wife, & not to mention we just found out we are 8 weeks pregnant (something we wanted but didnt think would happen without intervention, though I`m crazy happy about a baby). I just want to know if anyone has any ideas on debt consolidation vs. chapter7 or 13 or just anything anyone might be able to suggest.

  19. Domingo March 1, 2014 at 3:31 am Reply

    I have tried everything to control and consolidate my debt. Personal finance loans, switching credit card balances to low apr cards. I was out of work for about 5 months and now my debt/credit ratio is in the crapper. Now I cannot do anything. I tried a personal finance loan, signing up to switch cards, and no one will touch me. I have a good credit score, I never miss a payment and when you look at how much I dole out a month compared to what I would be paying on a loan, I would pass LESS on a loan than I pay a month now. What else can I do? I am drowing under the interest.

  20. Bryce March 1, 2014 at 7:48 pm Reply

    I have 10grand in credit card debt, plus about 25grand in car loan debt. I have heard that debt consolidation is actually worse for your credit than bankruptcy, is this true?

  21. Errol March 2, 2014 at 1:08 am Reply

    I was just wondering which route has been proven to be the most effective for debt relief i recent years. I’m just really undecided and would like to try something that really works instead of some time wasting scam program.

  22. Pedro March 4, 2014 at 6:11 am Reply

    Is this a good way to lower my debt and still have a good credit score?

    Thanks!!

  23. Roger March 4, 2014 at 10:50 am Reply

    why in all of america there is not one debt consolidation company that can combine payday loans, do they have the sopranos protecting them

  24. Ty March 4, 2014 at 12:52 pm Reply

    I am thinking about doing debt consolidation, but am confused by all the different companies out there. I have heard that there are a lot of shady companies. Does anyone have some helpful advice. My debt is not a huge amount ($6000), but I am tired of paying and paying on them and never seeing a difference on the balances.

  25. Carlotta March 5, 2014 at 6:27 pm Reply

    I’m looking for a way to consolidate my debt by either using a debt consolidation company or going to the bank for a loan. I am about 20,000 in debt and need help! Does anyone have any good companies they could recommend??

  26. Perry March 6, 2014 at 3:03 pm Reply

    I have about $7,000 – $8,000 in unsecured debt and I’m in desperate need of help.

    Can anyone recommend a Real Company that could help me out of debt?

  27. Fabiola March 6, 2014 at 4:41 pm Reply

    any debt consolidation companies that will combine payday loans under one umbrella or any lender

  28. Lee March 6, 2014 at 4:42 pm Reply

    I am trying to hunt down a well trusted debt collection consolidation company. The type where they run all 3 of your credit scores to see who you owe, & consolidate it into one lump sum for an afforable monthly payment. I have heard of many of them being scams, people “paying off their debt” and not actually paying it just paying the company money that supposedly consolidated it. Which in case sickens me that people can sleep at night knowing they screw over all of their customers. Anyways, if anyone knows of a real, scam free debt consildation service it would be much appreciated.

  29. Deana March 6, 2014 at 11:02 pm Reply

    My GF has a few accounts that have went into collections. Accounts that she had prior to us getting together. We have both fell into a little bit of financial trouble seeing as how our condo (that we are renting) has went into foreclosure right from under our feet. She was told from one of her friends to contact a debt consolidation company and they will help her to take care of the $5k worth of debt that she has that has went to collections. i have found other things online (please see following link)

    http://www.creditinfocenter.com/debt/DebtConsolCompanies.shtml

    that advise against such things BUT there is no real reason WHY… we would both like a chance to breathe and would like a 2nd chance to get our credit back into a respectable boundary. I dont care if the consolidation company is going to make money off of us as long as we can start paying down these bills a little at a time and get back on track with the rest of society. Neither of us have and repositions or bankruptcies she just has some credit card issues and a “cosmetic” 😉 medical bill that needs to get paid off…

    thanks in advance for any info.

  30. Leilani March 8, 2014 at 11:12 pm Reply

    I’m working with a Debt consolidation law firm and one of the debt collectors have threatened civil action unless I pay them in full or 3 payments. Can they do this and do I have any rights

  31. Barrett March 9, 2014 at 7:58 pm Reply

    What are trustworthy debt consolidation lenders that I can consolidate my credit card debt with?

  32. Izetta March 9, 2014 at 7:58 pm Reply

    Has anyone had any success with those debt consolidations that they advertise on tv? If so which one did you go with? & are there any catches? Thanks so much!

  33. Gregory March 11, 2014 at 10:42 pm Reply

    I have about $2600 in debt, I thinking about doing a debt consolidation. I don’t want one of those with the loans. I just want them to get it all into one payment. Is this a good idea? If so who should I use? Will it affect my credit also?

  34. Brittaney March 12, 2014 at 11:39 am Reply

    I have a revolving balance on 4 cards of about $14,000 and I am stressing out. I pride myself on having a good credit score and I have always made double or triple the amount of the minimum payment due but I just had a baby and we are living on just my husband’s income right now and I was wondering if anyone has consolidated their debt or has any advice. It would be greatly appreciated. We are starting to struggle with just the minimum payment due. Thank you so much.

  35. Son March 13, 2014 at 11:12 am Reply

    My husband and I have recently been thinking about debt consolidation. I don’t really understand it all so I was hoping somebody could explain the process, what it does to our credit, and is it really worth it in the long run. PLEASE HELP!!!

  36. Damian March 13, 2014 at 9:46 pm Reply

    how do debt consolidation places work
    IF you are against them. What are my options? I don’t want to do bankruptcy

  37. Tiffanie March 14, 2014 at 11:01 pm Reply

    What is Debt Consolidation? How can you tell its not a scam? And whats the difference between that and Credit Counseling?

  38. Traci March 15, 2014 at 11:13 am Reply

    I don’t have a lot of debt, but I am almost two years behind on a single credit card, have two other credit cards, medical bills, school loans, and currently my wife is pregnant and her medical bills are beginning to pile up. It is somewhere in the range of $7,000-$10,000, we want to get a loan for our first house, but I don’t have good credit and she has mediocre credit.

    I was wondering if anyone knew of some good debt consolidation websites or counselors to help us out or anybody who knows really anything about debt consolidation at all.

    Thank you.
    If I declare bankruptcy now I can’t get any loans or credit for seven years and I live in an apartment and that will definitely hurt my chances of singing a new lease.

    I also have car loans.

  39. Emmitt March 16, 2014 at 5:07 am Reply

    Do debt consolidation companies really help you? What is the best one and how does it work?

  40. Samatha March 16, 2014 at 1:50 pm Reply

    I have a bit of debt and I keep getting nowhere cause my finance charges are as much as I can pay each month. does anyone have any experience with a debt consolidation Company.
    Thanks

  41. Jame March 17, 2014 at 10:58 am Reply

    I’ve gotten myself into a bit of a bind and don’t know what to do. I’m working two jobs, but the balances for my credit cards just don’t seem to be going down. I feel like at this rate I will be working the rest of my life without solving my debt problem. So, I’ve been considering debt consolidation. However, I don’t know a thing about it. Someone said I should go to a non profit one. I don’t know how it works. Can anyone guide me through the process? Any experiences or recommendations you can give me would be so appreciate.

    Desperately seeking help!

  42. Charlyn March 21, 2014 at 6:51 pm Reply

    Debt consolidation help?
    I have two credit cards, the balance on the first card is $3,598.22 and the balance on the second card is $11,005.89. I want to transfer the balance on the first card to the second card but the credit limit on my second card is not enough to accomodate the balance on my first card. They just raised my credit limit a few months ago and I have a feeling that they would deny another increase. They would not let me talk to their credit department to explain my situation. What should I do? My credit is good. Any suggestions on how I should consolidate them and not pay too much monthly. I’m currently paying $400 on the first card and $200 on the second card.

  43. Donella April 7, 2014 at 4:49 am Reply

    Which one is better and less stressful? Bankruptcy or Debt settlement? what about debt consolidation? what are the difference between all those?

  44. Danial April 7, 2014 at 9:30 am Reply

    I’m considering getting a consolidated loan but have a couple concerns. I have heard that once you get it they close you credit card accounts, Doesn’t this hurt your credit score? Does getting the loan its self hurt your score? and How do i find a consolidation loan company?

  45. Dave April 12, 2014 at 4:49 pm Reply

    Hi,

    My partner owes around 20k to misc creditors as unsecured debt with some overdue etc. He has a steady job and has his budget under control now since his family situation changed and could provide a $200 monthly payment. His credit rating needs improvement but turns around 533 which isn’t too bad.

    Avoiding the bankruptcy path, what other solutions could you guys recommend for him to consolidate and renegotiate his debts into a single monthly payment or something without going into sky-high interest rates institutions?

    I may be interested by pro offers too but please I am mainly looking for real people advice.

    Thanks you all!!!

    Andie
    Comment for iceman: OMG thanks for the ‘terrible’ part, that sure helps dude 😛

    To the others, thank you so much and I look forward to more suggestions 🙂
    Please Angela D

    Could you let me know more about your experience with creditsolutions.com??

    You may also contact me directly through my profile.

    Thank you so much!

  46. Curtis April 16, 2014 at 1:09 pm Reply

    I’m seeking opinions on debt consolidation.
    I’m thinking of buying a home in next year or two. I have about 43,000 saved, but a credit score of 530. I’m a business owner and ruined my credit when I first started in 08. I currently pay 900 for rent on house and 450 on my store.
    My question is do debt consolidation company’s actually send off the pay/delete letters and follow up if paid/erogenous are applied? I know that most people don’t really finish the program or have bad habits and ruin their credit after. I only have about 4000 TOTAL debt on my report with four cc’s that are below 30% and a 16,000 car note that has never been late . I’m asking because payments would help a lot if its applied one debt at a time. And not split evenly. And shouldn’t take more than year to pay off at rate that won’t affect much.

  47. Mari May 8, 2014 at 5:14 pm Reply

    Has anyone had any personal experiences with debt consolidation?

  48. Justin May 28, 2014 at 8:41 am Reply

    Can someone please recommend a good credit card debt consolidation company? My husband and I would like to lower our APR and pay just one larger payment to a consolidation company and get rid of our credit cards. We need an honest company that won’t charge an arm and a leg for their services. FYI, we are in debt about $10k. Thanks for your help!

  49. Carrie May 31, 2014 at 5:47 am Reply

    What effect will it have if I get a debt consolidation loan. I am not in any financial trouble but I am tired of just paying multiple collectors each month. Will this have any effect on my credit score or cause any problem in the future when I try to purchase a home. I have hear that it can cause problems like that and can make it difficult to get a home loan…..Does anyone have any personal experiences with doing this??

  50. Nicolas May 31, 2014 at 5:47 am Reply

    I’m looking to consolidate my debt with a trusted credit counseling business. I only have about $8,500 so it won’t be too much. I tried to speak with National Debt Relief but I don’t like the process they use. Any trusted and good companies out there?

  51. Kelsey May 31, 2014 at 5:47 am Reply

    How good are those debit consolidations I see on TV? I saw one the other day that said if you own $10K or more you qualify for a free debt consolidation and I want to how good they are and should I trust them? Now I know what some what some of you will say just pay more then the minimum payments well I don’t have any extra money to do that.

  52. Denver May 31, 2014 at 5:47 am Reply

    My husband and I have bad credit. Not because we don’t pay our bills now, but because we were dumb in our past. Now we would like to buy a house but paying off our debt little by little every month isn’t getting us anywhere credit wise. All debt consolidation places we have researched just sets up payments for what we owe and then we also pay that company. That’s not helping. We want to find a company or business that will give us a total loan for our debt. Let us clear our credit history. We really don’t care how high the interest is. That’s the price we have to pay for our screw ups. Please help us!

  53. Hugo May 31, 2014 at 8:43 am Reply

    Is it true that debt consolidation (asking a company to combine your debts so that you only pay one bill per month) can go on your credit and affect it as a bankruptcy would?

  54. Robin June 13, 2014 at 11:03 am Reply

    Okay, I really need advice. My credit is going down the sh*thole right before my eyes. I’m really too young for this…

    I have a few credit cards that are maxed out. I am a junior in college, and am getting by on financial aid (grants and loans). These credit cards are killing me. I thought it’d be easy, and was irresponsible with them, and now here I am, in debt.

    My first question is what should I consider? Withdrawing from college (I have already withdrew for one semester; I had gone for 2, withdrew for 1, and returned for 1, now I am expected to return in the Fall) I have a fulltime job now where I work 40 hours a week, making 7.75 an hour. I use my paychecks in their entirity towards paying my mom rent to live at home, and towards my credit card bills. I do not use these cards at all, obviously, because they are maxed. My goal is to just pay them off.

    OR…should I consider debt consolidation? I’m really not sure what I’m getting into and am confused on what to do… 🙁

  55. King June 14, 2014 at 3:59 am Reply

    I have various written off debts – including old cc’s, school loans in collections and my car is on the verge of being of repossessed. Does debt consolidation cover written off / repo’d items? What company’s out there would you recommend? Thanks so much!

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