Today more than ever, people on television, radio and Internet advertising is debt consolidation, but what is it exactly? Does it really work? How can I avoid being cheated out of house and home? Will it affect my loan? All these are very important issues to be addressed when seeking debt consolidation assistance.
Consolidation does not get rid of existing debt. Usually it is credit cards, consumer credit, student debt and car loans, which eventually consolidated. People use it to roll their smaller payments for a big payout, and they often prolong the life out loans to lower monthly payments. most practical form of debt consolidation program rolls existing debt into a home mortgage or HE-LOC loan on your house. In a way, you just borrow money from a lender to pay another. The main aim of debt consolidation is to lower your monthly payments. It is important to note that even at a lower interest rate, you still have to pay more interest over the life of the loan if the loan has a considerably longer period.
Beware of people who tell you that you can pay your debt to a fraction of what you owe. If you are not already behind in payments and it will often only works by destroying your credit. If you are behind, you can probably solve a lot of this debt yourself with out paying a 3rd party commission. If you own assets or have an income, there is nothing to stop credit card companies to sue you after the settlement of the amount you originally owed. Another thing to avoid, is agents trying to consolidate your debts to an adjustable rate mortgage with a balloon payment at 1, 3 or 5 years. Brokers can make a hefty kickbacks on those loans because the real payment amounts may be masked behind the arm.
Getting debt consolidation assistance is a serious step. At best, it is only a temporary solution to a bigger problem. You should find out as much as you can about debt consolidation companies before you continue.
Consolidation does not get rid of existing debt. Usually it is credit cards, consumer credit, student debt and car loans, which eventually consolidated. People use it to roll their smaller payments for a big payout, and they often prolong the life out loans to lower monthly payments. most practical form of debt consolidation program rolls existing debt into a home mortgage or HE-LOC loan on your house. In a way, you just borrow money from a lender to pay another. The main aim of debt consolidation is to lower your monthly payments. It is important to note that even at a lower interest rate, you still have to pay more interest over the life of the loan if the loan has a considerably longer period.
Beware of people who tell you that you can pay your debt to a fraction of what you owe. If you are not already behind in payments and it will often only works by destroying your credit. If you are behind, you can probably solve a lot of this debt yourself with out paying a 3rd party commission. If you own assets or have an income, there is nothing to stop credit card companies to sue you after the settlement of the amount you originally owed. Another thing to avoid, is agents trying to consolidate your debts to an adjustable rate mortgage with a balloon payment at 1, 3 or 5 years. Brokers can make a hefty kickbacks on those loans because the real payment amounts may be masked behind the arm.
Getting debt consolidation assistance is a serious step. At best, it is only a temporary solution to a bigger problem. You should find out as much as you can about debt consolidation companies before you continue.
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