Tips For Unsecured Debt Consolidation

Debt is pretty common in this country these days and the current economy hasn't helped things

. A few years ago the credit card industry threw credit cards at people and some of these people used them, but now all that has changed. As long as you did not go too crazy, your expenses did not increase significantly and you are still employed, you are probably all right. But for many people one of those things changed and they are dealing with more debt than they can handle.

There are two ways that unsecured debt consolidation can be done. One is with a home equity loan and the other is through a nonprofit credit counseling organization. A HELOC is not something that you should give serious consideration to unless you are sure you are disciplined enough to not charge on the credit cards that you are paying off. If there is even an outside chance that you will carry balances on these cards again, this is not the option for you.

This options still remains risky, because it is securing your credit card debt with your home. If for some reason you cannot make the payments, your home could be foreclosed on. You will have to be credit worthy for this to be a debt relief alternative that will work for you. And truthfully, many major lenders are not doing a whole lot of lending right now, even if you have a good credit score.

Credit counseling is an option that most people can use. You will need to be employed, but 90% of people that apply for this program can be helped. You cannot place any secured debt, student loans or tax debt in this program. But consumer debt can be consolidated through this plan. The consolidation is not a loan, but it allows you to make one payment a month to cover all the debts in the program. You will pay the credit counseling company and they will take care of disbursing your payment to your lenders.

This debt relief plan reduces all of interest rates and eliminates your fees. With this being the case, you should be looking a 3 to 5 year repayment period. A 2% payment will be what will be required. Enrolling in a debt management program can eliminate the stress that you had been dealing with in the past months. Once you get enrolled, you will want to begin to plan for your future and make the necessary changes to make your life financially stable.

by: Marjorie Salada

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