subject: Debt Consolidation - How This Service Works [print this page] Debt Consolidation - How This Service Works
The Debt Consolidation programs are usually separated into two categories; secured debt consolidation and unsecured debt consolidation. The main difference between these two options lies on the fact whether they are secured by collateral or not. In secured consolidation, the creditor is given further comfort by giving him a chance to recover the money they owe by selling out his property. In unsecured debt consolidation, more risk is placed on the creditor.
If you hope to consolidate a few unsecured loans under this program, you should know how it works. Through this program, you can consolidate several credit card bills into a single loan. It is convenient. It avoids the need of getting several collection calls and notices. Once you consolidated all your liabilities, you will receive only one notice with a fixed monthly payment.
You do not receive discounts like in debt settlement programs but still you can secure a lower interest rate. It greatly helps you in repaying your debts in a continuous speed. Since the government tax breaks also encourage this process, the debtor will enjoy a great relief. But make sure that you have a fair income before you undertake this process. If you skip one monthly payment, it is likely that you will be kicked out of the program. So, this program is best suited for those who have a good income but unable to manage their income.
Apart from your rising amount of debts, which adds to your stress is your inability to choose a genuine service provider. The success of this program not only depends on you but also on the negotiation company as well. Therefore, make sure that you select a debt consolidation company which shows the 'approved' seal of the Federal Trade Commission or the Better Business Bureau. Extreme caution is advisable when you select a debt consolidation service provider.
Finding legitimate debt settlement companies is very important. Unfortunately there are predatory debt settlement companies on the market so consumers need to know how to find legitimate services. To locate the top performing debt settlement companies in your state check out the following link:
