Debt Consolidation is the idea of taking out one larger loan to pay off the many smaller debts you may have so that you only have to make one larger payment each month rather than keeping track of a dozen different smaller bills. The idea is to replace the multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. Debt consolidation programs often offer consumers a lower overall interest rate and a larger tax break. These loans may also provide certain tax advantages that are not available with other kinds of credit.
Don’t forget, however, that usually you are getting your consolidation loan through a second mortgage or a home equity line of credit. These loans require you to put up your home as collateral, which means that if you can’t make the payments –- or if your payments are late –- you could lose your home.
There are several factors to consider before getting a debt consolidation loan. In addition to interest on the loan, you may also have to pay “points,” with one point equal to one percent of the amount you borrow. By consolidating your unsecured debt with a home equity loan, you run the risk of losing your hard earned assets if you default on your payments, you will still pay the full balances on your unsecured debt, and you must also have a low debt-to-income ratio to qualify.
Debt Settlement Debt Negotiation works by negotiating the balance owed on your unsecured debt so the amount paid is less than owed. We design an affordable monthly savings plan and your savings are used to obtain a deal from your creditors.
Most likely, yes. Any time you are behind, with or without a program, you will receive calls. However, many creditors are accommodating. Additionally, calls may reduce after the original creditor receives a detailed hardship letter from you.
Debt Settlement or Debt Negotiations effect on your credit score will depend on your current credit status before starting any settlement program. Very few people with debt problems have perfect credit and debt settlement is meant to be a hardship program.
We are the Debt Rx and are one of the longest operating Debt Settlement and Debt Negotiation firms in America. We are not the largest, because our focus has been more on personal attention and service of existing clients than that of enrolling new ones.