Finding The Right Debt Consolidation Company

For the consumer who is in a panic about an increasingly bad financial situation

, finding the right debt consolidation company can seem like looking for a needle in a haystack. There are thousands of television ads and online sites, and it is difficult to even know where to start.

The most important thing a consumer can understand is that a debt consolidation company can offer different type programs. There's traditional debt consolidation, which means taking all credit accounts and rolling them into one monthly payment. As they are paid off, accounts are closed. Depending on the consumer's amount of debt, this can be a workable solution, but the amount needs to be low enough that a consolidation loan isn't required. To take out a loan, it will be collateral, and that's either a second mortgage or a home equity loan. These types of loans can take years to pay off, and if the interest and risk factors are considered, it is a long term situation and a default can mean the loss of property through default.

To find a debt consolidation company that offers more than one solution is wise. Many debt relief organizations will also offer debt settlement and debt management as options. They are also types of consolidation and work without the necessity of a loan. In these cases, the consumer works with a company, who provides expert negotiators to interface with creditors. Principle balances are reduced to up to 50% off the original sum owed. The consumer pays into a monthly account which is managed by the company, and in 12-48 months can find themselves debt free.

By working with a debt consolidation company, the consumer can expect that their credit rating will drop. In reality, it already has if payments have been missed or debts have been defaulted on, but both debt settlement and debt management offer much faster ways to get out of debt than traditional consolidation and secured loans. Because these programs work more quickly, the consumer can start to rebuild both their credit rating and their lives sooner.

A debt consolidation company choice should not be confusing. It should be well researched and the consumer should be prepared with pertinent questions and have all their financial details in order. Good consultants will be able to advise what the most appropriate plan of action might be, and can get the consumer started in a debt relief plan very quickly.

by: Vicki Hall

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