Print Article for : Card Consolidation Credit Debt Help

Your Online Guide » Loans Guide » Debt Consolidation Personal Loans

[C195]Card Consolidation Credit Debt Help

by Andrea Smith, And

The concept of bad credit debt consolidation means taking action to rebuild credit history. If you currently deal with multiple debts from different creditors and is experiencing difficulty in keeping up with your payments, debt consolidation may be just what you need.
There are two ways to consolidate debts: one is by enrolling in a credit counseling course and the other is by obtaining a debt consolidation loan. In this article, let's take a closer look at each of these options.
Debt consolidation Loans for bad credit
By taking out a debt consolidation loan, a borrower can pay off all his creditors and all existing debts at one time. This way, continuous debt build up is prevented because of the interest rates and penalty fees incurred each month. After all debts have been completely paid, the borrower can focus on paying only one lender and that is his debt consolidation company.
A debt consolidation loan is usually a secured loan. This means, the amount of loan available for the borrower would depend on his home equity. Since the loan is secured with a property, many lenders are willing to provide the needed fund despite the borrower's bad credit.
For those who are planning to use a debt consolidation loan, it's important to understand the risks involved. Bear in mind that failure to keep up with your monthly consolidation loan payments could mean losing your home property to foreclosure. In order to succeed, one needs to create a definite repayment plan that works and do his best to follow it.
Bad Credit Debt Consolidation through Counseling
Another way to handle debt problem is to seek help from a credit counseling agency. A credit counselor should be able to work out a negotiation with your creditors for lower monthly payment terms. Aside from reaching a negotiation, credit counseling should be able to help you come up with an effective budget plan to help you cope with your present financial situation.
Before signing up with a credit counseling agency, don't forget to check its background and reputation. Consumers must be warned that even some counseling services who claim to be run by ?non-profit? organizations do not always guarantee a legitimate service. The only way you can check this is by doing your own research about the company's history and track record of service.
Stay away from credit counseling agencies who may force you into acquiring a debt consolidation loan or enrolling in a debt management plan. Although an agency can suggest these options, especially for people with extreme debt problems, the final decision is still up to you. A real credit counselor should take time in hearing out the issue and evaluating the real cause of your debt problem.
Also, watch out for credit counseling agencies who demand unreasonable upfront fees without rendering any real service. If a counseling agency asks you to pay an expensive amount of money in exchange for just a few hours of talk, better take your business somewhere else. The primary goal of a real debt counseling service is to help consumers with debt problems, not make money from them.

While you may have been taking on unnecessary debts with the best intentions to repay them, it doesn't always work out. If you are finding yourself in unmanageable debt, you should seek help to get them under control before bankruptcy becomes your only choice. When should you seek help with your debts? If you are missing payments or barely making minimums each month, you should seek help from a credit counselor or take on a plan of action to solve your credit problems.

There are a few options when it comes to taking control of your debts. You can do so by you setting up a reasonable, workable budget and allocating funds to pay off your bills to the best of your abilities. Remember, making only minimum payments won't reduce your balance by much, since interest is added onto your balance every month. However, a minimum payment ensures that your accounts are in good standing and will keep creditors from hassling you.

Self-Help Guides
There are many self-help guides at your local bookstore or website for those who would like to manage their debts on their own. You can also try contacting your creditors to explain your situation. You might be surprised by the results of simply giving them a phone call.

However, most individuals seek the help of a credit professional. These days, there are many credit counseling agencies to choose from. An agent will help you create a working budget and will figure out a plan to get your debts under control. They will usually contact your creditors to renegotiate payment terms that are more manageable for your budget.

Help with Your Creditors
Your credit counselor may also enlist you in a debt management program. In this program, they will add up your monthly payments and figure out the exact amount that you owe each month. You will make just one payment to the credit counseling agency and they will pay your creditors on your behalf. This is especially helpful for those who have trouble keeping up with the number of creditors they have.

You can find a legitimate credit counseling agency by doing your research online. Find agencies that have positive ratings by asking others for recommendations. Ask questions about fees and accreditation, and how long they have been in business. Usually, agencies that have been around for a while will most likely be reputable. Usually, not-for-profit credit counseling agencies are your best bet.

Pay off Your Balances
Another option is to get a consolidation loan to pay off your balances in full. Your only obligation from that point on is to send in your monthly payment to pay the consolidation loan. Some people take on a consolidation loan in the form of home equity lines of credit or personal loans. If your consolidation loan interest rate is lower than the rates that you are currently paying, you will save money in the long run.

Whichever alternative you choose, remember that it is okay to ask for help. Bankruptcy can lead to many problems and will leave a bad mark on your credit report for up to a decade. The best thing to do is know when to seek help before it is too late. The federal government has some helpful information for those with credit or debt problems, so check out some of their publications for more resources.

Article Source : Best Debt Consolidation Program

About Author

Both Andrea Smith & Antonio Silver are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Andrea Smith has sinced written about articles on various topics from Collection Agencies, Debt Consolidation and Hunting. Andrea Smith is a writer and consultant with Consolidate4Free.com and has been providing consumers and business owners with since 1990. Andrea Smith's top article generates over 27100 views. to your Favourites.

Antonio Silver has sinced written about articles on various topics from Credit Counseling, Debt Consolidation and Finances. Get the latest in debt help know how from the only true source at http://www.debtexpire.com. Check out our pages.. Antonio Silver's top article generates over 9900 views. to your Favourites.