http://www.debtreductioninfo.com/debt-consolidation/debt-consolidation-loan/ Debt consolidation loans: A debt consolidation loan can be a blessing by saving you from credit problems. en-us Sat, 26 Jul 2008 15:00:00 EDT Sat, 26 Jul 2008 15:00:00 EDT Weblog Editor 2.0 Feeling overwhelmed by debt? Maybe your debt was caused by unexpected medical bills, or you were laid off from your job and had to begin relying on your credit cards more (and for a longer period of time than you expected). Or maybe you were just carelessly spending with your credit cards. Whatever your situation, a debt consolidation loan can give you the help you need before you ruin your credit. How Do Debt Consolidation Loans Work? A debt consolidation loan can work in a couple of different ways. One form of debt consolidation loan gives you a check upfront for the total amount you owe to your creditors. You then pay them all off, and you make payments to the lender who gave you the loan, be it a bank or a debt consolidation company. The most common type of debt consolidation loan involves a debt consolidation company. You will be working with a credit counselor who will work as an agent on your behalf and deal with your creditors. If you're at the point where you're receiving harassing phone calls from your creditors, the credit counselor can get those stopped immediately. They can also negotiate with the credit card companies for lower or flexible payments, and in some cases (but not all) they can convince the credit card companies to remove past late fees and other types of fees such as annual fees, over-the-limit fees, etc. that just make your balance higher. (And remember, you're paying interest on that balance, and the higher the balance is, the more interest you'll pay.) The debt consolidation company will also look at your financial situation to determine how much you can afford to pay each month, and try to get your creditors to accept payments based on this amount. A good debt consolidation service will follow up with the credit card companies and get them to put the agreed upon terms in writing. Once you and your credit counselor have agreed on what you can afford to pay, you will make one monthly payment to the debt consolidation company each month (instead of several payments to your various credit card companies). The debt consolidation company will divide that payment among your creditors and take a portion of the payment that you agree to for their fee. A good debt consolidation company will provide you with statements each month so you can see the progress you're making. In addition to providing the debt consolidation loan for you, the company you choose will provide debt consolidation services such as educating you about how credit card companies work and how to budget better based on your income. A debt consolidation loan is probably your last resort before filing for bankruptcy. In fact, it can save you from bankruptcy. President Bush is even considering signing a bill that requires people to try debt consolidation programs before resorting to bankruptcy. This is a win-win situation for everyone because your creditors will get paid, you will be out of debt in 5-10 years (depending on the amount of your debt) instead of the national average of 18-20 years. Plus, you won't have the black mark of bankruptcy on your record. Where Can I Find Debt Consolidation Resources? A good place to start looking for debt consolidation loans is on the Internet. Most debt consolidation companies offer online debt consolidation or, at the very least, they allow you to fill out their free, no-obligation online questionnaires. These are secure, and the purpose is to help a credit counselor assess your financial situation and offer a debt consolidation program that's right for you. Within 24 hours you will receive a recommendation from the companies whose questionnaires you completed. You can then compare and contrast their offers. You may find that in addition to debt consolidation loans, they may suggest a debt consolidation mortgage if you're a homeowner, or a student loan debt consolidation loan if the bulk of your debt is due to student loans. We hope this site has provided you with a wealth of information about debt consolidation help. A good place to start your search is on our Related Resources page. Happy hunting! And remember that there is nothing new under the sun, even if you are dealing with bad credit debt consolidation - you can find what you are looking for. Sat, 26 Jul 2008 15:00:00 EDT