Debt Management Services

Debt Consolidation Loans VS Debt Consolidation Programs

Debt consolidation loans are very different than debt consolidation programs, but there also are some similarities.

The one factor that separates the two is that debt consolidation loans usually come in the form of a home equity loan.

• Consolidating all of your payments into one payment
• A lower monthly payment
• Lower interest rates
• The ability to pay off your credit card debt over a longer period of time

The one factor that separates the two is that debt consolidation loans usually come in the form of a home equity loan. So an individual usually must own a home and use that home as security for their credit card debt. If they fail to make their payments or cannot pay off their debt consolidation loan in the allotted time, the bank or lender can seize the home. That is obviously a worse case scenario but it can and does happen.

Debt consolidation program is a safer and more practical method of eliminating credit card debt. They simply contact a credit counseling agency, such as Consolidated Credit Counseling Services, and speak to a certified credit counselor. The credit counselor will ask a series of questions regarding the amount of debt they are in, how many credit cards the person owns, how much money they bring in each month, among other things. The questions may vary from agency to agency, but they all want to get a good idea of how much financial stress the person is in.

Once the credit counselor gets an accurate perspective on the person’s finances he or she then goes to work. The counselor contacts all the creditors that the person owes money to and lets them know what they are doing. All bills are consolidated into one monthly payment, which is usually less than what the person was paying prior to contacting the credit counseling agency, and many fees are waived. The counselor can also negotiate a lower interest rate. The person then sends the single monthly payment to the credit counseling agency and they take care of paying off all the creditors.

A warning: all individuals should make certain that they are dealing with an honest credit counseling agency. Some agencies hold the money longer than necessary, to make interest on it, or don’t make the monthly payments on time. It is up to the individual in debt to do their research to make absolutely sure that they have chosen the right people to help them eliminate their credit card debt.

Another benefit of using a debt consolidation company, such as a credit counseling agency, is that many of them offer free tips on how to manage money, on creating a budget and living with that budget, on how to properly save money and spend money, and how to create a more healthy financial future.

In the end, debt consolidation loans are just too risky for many people, so they choose a debt consolidation program that is unique to their needs and their financial requirements. Call Consolidated Credit Counseling Services at 1-888-881-3619 for more information about their debt consolidation program.