Five Debt Consolidation Programs that Could Work for You

There are thousands of Americans that are now in debt. Debt consolidation programs may sound like the best option for you but if you choose a program that is wrong for you, it could add to the nightmare that you are already in.


Debt consolidation programs work by talking out a loan, which will cover the cost of all the single amounts of debt that you owe. You will agree on monthly repayments and the length of the loan term so you will know the amount of interest that you are gaining and how much money will come out of your bank each month. This can be extremely beneficial but they can also affect your credit rating, dramatically.


There are five types of debt consolidation programs that you could look into and the first is taking out a personal loan. This is possible if you have not suffered too badly and there is still a good credit rating there. There are many different types of personal loans out there but the majority are unsecured, which are perfect for those who do not own their own home. The interest rates can be high with personal loans but it all depends on the provider that you opt for and the amount of money that you take out. Sometimes, taking out a high interest loan will work out better, especially if that interest is still lower than you would be paying on all your separate debts.


Another option of debt consolidation programs is to negotiate with your creditors. There may be chances that you can gain better rates or even lower your monthly repayments. There are chances that you will be told no at first so you should try to speak to a supervisor or manager. You can then explain about your tight financial situation and you are looking for a solution that does not mean using a financial advisor or having to declare bankruptcy. This will usually have them offering debt consolidation programs because they do not want to lose the money that you owe.


If you do own your own home or have a mortgage, then there are other options available for debt consolidation programs. The first is through remortgaging your home. This can usually help you cut down on the amount of money that you repay on your mortgage, by changing a 15 year term to 30 years.


However, this will mean that there is a lot more interest that you will be paying so you may want to look into a home equity loan. This can help you take out a secured loan, which will offer lower interest rates and that interest is all tax deductible. The downside is that you may lose your home if you default on payments.


The final of all the debt consolidation programs is to look into non-profit organizations. There are a number of them out there that will help you to renegotiate your debts and offer financial planning. Some will charge a small fee but it will be worth it when you can protect your credit rating. There are some that are recommended by the Better Business Bureau, so check your options carefully.

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