Debt Consolidation

Debt consolidation is a combination process of all unsecured debts into a single loan. Debt consolidation however is called as debt management or debt settlement. The purpose of debt consolidation is to reduce the interest rate and monthly payment. When one suffering in a financial crisis, it is the most responsible way to seek debt relief.
Many credit counseling programs provide debt management programs that allow you to make a single monthly payment each month. While they don’t actually pay off your debt into a single loan, as the consumer you are making a single monthly payment to the credit counseling agency (who then pays your creditors on your behalf), so it is very similar to paying off debts with debt consolidation loans as far as your monthly payments are concerned.
For example, let’s say you have $30,000 in unsecured debt, including a 2-year loan for $10,000 at 12%, and a 4-year loan for $20,000 at 10%. Your monthly payment on the $10,000 loan is $517 and $583 on the $20,000 loan, for a total payment of $1,100 per month. The debt consolidation company tells you they have been able to lower your payment to $640 per month and your interest rate to 9% by negotiating with your creditors and rolling the loans together into one. Sounds great, doesn’t it? Who wouldn’t want to pay $460 less per month in payments?
Don’t wait for your creditors to drive you into bankruptcy. Feel good about yourself by beginning a debt consolidation program today. Get additional information about how Debt consolidation loans will relieve your monthly payments, reduce your debt, and help you forge a better relationship with your creditors.