If you are one of the many people hard hit by the slowing economy and mounting credit card debt you may be considering credit card debt consolidation loans as an option. Many people use this term interchangeably with credit card debt consolidation and it's easy to misunderstand what your options actually are. We're going to discuss the differences here to make things easier for you to make your decision.
Debt consolidation is a service debt consolidation services offer their clients that enables the consumer to make a single monthly payment on all of their credit card balances. The reason this is done is so that interest rates can be lowered, penalties and fees eliminated and to create a situation where the one monthly payment is more affordable than before.
So when people speak of credit card debt consolidation loans they are actually not speaking about a loan at all but rather a program designed to make their payments more affordable so that they can get them paid off and become debt free. If consumers are in fact seeking a loan to pay off their credit card debt then perhaps a home equity loan or some other line of credit such as a personal loan is a possibility.
An individual who wants to borrow money to pay off their debt will not be looking for debt consolidation as offered by a debt consolidation service. Understanding the difference between the two meanings can help you understand your options.
Rather than using credit card debt consolidation loans to pay off your credit card debt, debt consolidation companies and credit counseling services actually works as a mediator between creditor and debtor. They do everything they can to negotiate workable terms so that you can afford to pay off your credit card balances in an affordable manner.
These debt consolidation services are able to do that because they have pre-existing relationships with financial institutions and they understand the way that they operate. The credit card companies are willing to accept payments with lower interest rates because they understand that the consumer that owes the money can no longer afford it and is close to defaulting on their payments, in which case, the credit card company would get nothing.
This process requires the consumer to close all of their credit card accounts. It then takes approximately 4 to 5 years before the credit card debt is completely paid off. Thought these are not credit card debt consolidation loans, they are very helpful to many consumers as a means of getting out of debt and back on their feet financially.
Debt consolidation is a service debt consolidation services offer their clients that enables the consumer to make a single monthly payment on all of their credit card balances. The reason this is done is so that interest rates can be lowered, penalties and fees eliminated and to create a situation where the one monthly payment is more affordable than before.
So when people speak of credit card debt consolidation loans they are actually not speaking about a loan at all but rather a program designed to make their payments more affordable so that they can get them paid off and become debt free. If consumers are in fact seeking a loan to pay off their credit card debt then perhaps a home equity loan or some other line of credit such as a personal loan is a possibility.
An individual who wants to borrow money to pay off their debt will not be looking for debt consolidation as offered by a debt consolidation service. Understanding the difference between the two meanings can help you understand your options.
Rather than using credit card debt consolidation loans to pay off your credit card debt, debt consolidation companies and credit counseling services actually works as a mediator between creditor and debtor. They do everything they can to negotiate workable terms so that you can afford to pay off your credit card balances in an affordable manner.
These debt consolidation services are able to do that because they have pre-existing relationships with financial institutions and they understand the way that they operate. The credit card companies are willing to accept payments with lower interest rates because they understand that the consumer that owes the money can no longer afford it and is close to defaulting on their payments, in which case, the credit card company would get nothing.
This process requires the consumer to close all of their credit card accounts. It then takes approximately 4 to 5 years before the credit card debt is completely paid off. Thought these are not credit card debt consolidation loans, they are very helpful to many consumers as a means of getting out of debt and back on their feet financially.
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Find out how credit card debt consolidation loans can help you get out of debt when you visit www.debtconsolidationhelpquote.com.
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