Debt consolidation services near you

What is debt consolidation?

Debt consolidation is one approach to debt. A debt consolidation service will take all of your debt and combine it into one regularly scheduled payment which you will make until the debt is paid off. Often, this allows you to pay off your debt faster and at a lower interest rate. Some benefits to debt consolidation include:

• Raising your credit score
• Creating a plan to get and keep you out of debt
• Fewer monthly payments
  
  

Debt consolidation works best for individuals who are in debt and do not qualify for bankruptcy. However, there are downsides to debt consolidation if it is not approached carefully, such as higher interest rates, loss of property, and scams. If you're considering new ways to manage your finances, search our list of accredited debt consolidation services near you.

 

How does debt consolidation work?

Depending on the size of your debt and the investments you have at your disposal, debt consolidation can be approached from several different angles. The most common ways debt consolidation services will approach a situation are through:

• A zero or low-interest credit card
• A fixed-rate loan
• A home equity loan
• A 401(k) loan
  
  

Taking out a home equity or 401(k) loan is often considered a risky move, yet it can be deemed necessary in certain situations. A repayment plan which relies on a credit card or loan will not affect your home or retirement (unless you later decide to take out a loan against it). However, it is important to pay attention to the details of your contract to ensure the consolidation is worth it. The right debt consolidation service will work with you and your creditors to lower the amount of interest paid over the duration of the debt, as well as the amount of time required to pay off the debt.

 

Warning signs of debt consolidation services

Debt consolidation is a confusing and often intimidating practice for many. Unfortunately, scammers are quick to take advantage of those desperate to get out of debt. The warning signs of scammers posing as debt consolidation services are clear once you learn where to look. Some red flags include:

• The company does not take the time to create a plan specific to your needs.
• Guarantee approval before meeting with you about your situation.
• The terms of the contract do not guarantee that the rates will stay the same.
• Your creditors will not work with them.
• The company demands payments for hidden fees or asks for payment before the loan is approved.
• You are pressured into a settlement instead of a repayment plan.
  
  

Avoid becoming a victim of a scam. Read carefully through the details of your contract to be certain of interest rates and all elements of the debt consolidation plan.

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