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Don't Pay Extra For Debt Consolidation Loans |
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Submitted by Cheryl Adams
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If you have a high balance of outstanding debt, you may want to consider debt consolidation. By using debt consolidation services, you can reduce your interest rate, the amount you are repaying and ultimately reduce the stress caused by this debt. The choice is yours, though. You can choose debt relief consolidation services that are either “for-profit” or “free”. For-profit services usually charge a flat monthly fee but with other charges applied beyond that flat fee On the other hand, free consolidation services are associated with creditors and therefore only charge the flat fee per month. This, obviously, saves the debtor money in the end. He or she is, in fact, trying to reduce their debt and incur additional unnecessary expenses when alternatives are available.
A benefit to free debt consolidation companies is that their services go far beyond just consolidation of credit cards and debt loans. The subsidies they receive from their supporting creditors give them more freedom to more thoroughly help those with poor credit. They are able to afford the risk. This is one reason why those with poor credit ratings prefer these services over the for-profit consolidation companies. Those with poor credit will benefit from those companies offering education on consumer debt repair. Repairing your credit rating is an important aspect of improving your entire financial future.
In addition to choosing the right company, the actual consolidation program will also be extremely important in your decision-making, especially for those severely in debt. For individuals in such a situation, accelerated debt consolidation is probably the best consolidation program. The accelerated program is similar to regular consolidation but rather separates the debt into unsecured and secured, only consolidating the unsecured debts. You can get lower rates and a faster repayment plan through accelerated consolidation programs, but the more secured debt you have, the more difficult it will be in obtaining this plan. The most common types of unsecured debt today are personal loans, credit cards and department store cards. Secured debts involve collateral, or an asset to secure the loan such as a house or car.
Whether you choose accelerated or regular debt consolidation, do not underestimate the benefits of a “free” debt consolidation organization. Not only are you saving money in unnecessary fees, the services they are able to offer the consumer can equip you with money management skills to better secure your long-term financial health by eliminating debt and repairing your credit.
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