Debt consolidation is a great way to gain control over your finances once again. You can use debt consolidation to pay off all your other debt obligations such as credit cards, store cards, medical bills, and unsecured loans like gas and store credit cards. It is also the fastest and most efficient way to obtain debt relief. There are basically two kinds of debt loans, you could apply for debt consolidation purposes: secured and unsecured. An unsecured debt consolidation loan is one in which you are able to obtain approval for a larger amount of money, usually with lower interest rates than with a secured debt consolidation loan.
The most popular form of debt consolidation loans is a HELOC (Home Equity Line of Credit). A HELOC is a revolving credit in which you make a one time payment each month on a certain amount of money. The money is held in an account and paid out when you make your monthly payment. This is a good credit score debt consolidation when you are unable to come up with the cash to make all your monthly minimum payments. The negative is that the interest rate can go up to very high levels if you are making poor payments.
Another popular form of debt consolidation loan is to use a debt management program. In a debt management program, you hire a debt consolidation company who works directly with creditors to lower your monthly payments, reduce interest rates, and eliminate fees and penalties on your outstanding accounts. The debt management program will make your monthly payment to the company and they will distribute the funds to your creditors in predetermined amounts. This is a great way to gain control over your finances because the program makes your payments to your creditors at a more affordable level, giving you a chance to build up your credit again.
For many people, credit card debt relief may come in the form of cash advance loans from a payday loan company. Payday loans offer quick cash to people in need of small amounts of money. They are convenient, fast, and easy to qualify for. In order to get approved for a payday loan consolidation, however, you will usually need to provide some type of collateral security, such as a vehicle or home, or some other valuable item of value.
The third option for debt consolidation loan repayment is to use a debt management program from debt relief company. With this option, you will still make your monthly payments to the debt management program, but they will distribute the payments to your creditors in predetermined amounts. Your payments are deducted from the money the program pays to your creditors, keeping the amount of debt you owe down while making your payments easier to manage. Debt management programs are also accepted for people who do not qualify for other options, such as those with charge offs, late payments, and bankruptcy filings.
If you have made the decision to consolidate your debt through a debt management program or a payday loan consolidation, you should start out by talking to your creditors. They will be more than willing to work with you, as they will receive a percentage of the total amount you pay, and it will help them in their own efforts to collect their money. It is always a good idea to avoid collection calls or letters, and to make sure that all of your monthly payments are in fact going to your creditors. This will help you get the most out of the debt management programs you may choose.