Debt consolidation or debt refinancing is a successful process of clearing other small existing loans with a single loan. It is a good idea to consolidate all your loans into one because it helps you to get rid of many problems. Some loans and debts like the credit cards have very high rate of interest, and thus, it is very useful to take a single loan which is of small interest to clear it off as fast as you can and thus stop the spiraling interest accrued on it. Split up minimum monthly payments can be higher that the single payment and thus adversely affects your finance planning. Also, one bill means less confusion.
The Beneficial Features
The company does the full programming for your investment management and operation, and you do not have to undergo any hassles and negotiation process. Since there are many nuances of law attached to it, you cannot know everything and be successful. Apart from knowing the laws regarding debt negotiation, they create a payment plan suitable for you and put the pressure on creditors. The most important factor of the company is that the working procedure is very transparent, and they do not charge a fee until the work is complete.
The Pros And Cons
Debt consolidation is not the same as debt settlement. In debt consolidation, you pay off the full debt with no adverse impact on your credit score, but debt settlement adversely affects your credibility. You can choose from secured and unsecured loans as a consolidated loan. The advantage of such loan is that the interest rate is low and that single monthly payment eases your financial burden. Moreover, if you take an unsecured loan, then there is no risk of any collateral attachments.
How Does It Work
The process in which the consolidation of loan works is very simple. Please do not think that these agencies give loans or settle debts or declare you insolvent or bankrupt. It is mainly a third party settlement in which the counseling agency clears your other existing debts and through their preset arrangements with other companies to clear off your balance at lower interest rates. The plans and rates charges for the clearance of debt are same across all agencies. Since everyone is not eligible for consolidation, as it requires a commitment for timely payments, the process must start with a proper counseling. The process is very straightforward and easy.
Easy Customized Process
Non-profit debt consolidation agencies and their help are readily available and accessible. You can talk to them on the phone itself for consolidation loans. They can provide you with private and non-judgmental solutions for free. You cannot get detailed information about all the consolidation options if you talk to your banker. You can take the help of an advisor for such additional information. Once you are satisfied with the initial discussions with the agency personnel, you can go for counseling and the further process and get rid of your debts with a single loan with a minimum rate of interest.