Already on ArticleSlash?

Forgot your password? Sign Up

True Facets of Debt Consolidation and Credit Repair


Visitors: 245

Many aspirant borrowers fail to get the desired financial assistance from the banks and other financial institutions because of the fact that they have bad credit record. Some of such people try to escape the problems of bad credit record using the process of debt consolidation. But the pertinent question for any such person or all concerned is is debt consolidation and credit repair complementary for each other?

Understanding the Essence of Debt Consolidation

What is debt consolidation? Basically debt consolidation refers to consolidating all the debts a person has and substituting them for one consolidated debt to a new lender who takes care of all the previous debts that are outstanding on date and allows the borrower concerned a new debt in lieu of all the earlier debts.

What is So Novel About It?

If it is just substitution of multiple debts for one, then what is so novel about it?

The novelty lies in the fact that now the debtor will have to pay one single premium for consolidated debt to the new lender;

  • Borrower is now freed from keeping track of numerous debts and repayment schedules which shows that debt consolidation and credit repair truly complement each other; and
  • Since the new lender will negotiate for the borrower with his or her ex lenders, they can often come up with lower interest rates and even shelving a part of the overall debt by the previous lender who would settle for lower payments to close out the loan account.

How This Works

Usually debt consolidation services that render such services to borrowers with bad credit records will come up with some relaxations for the borrower who has been suffering from the problems relating to multiple debts. On the other hand the previous creditors may settle even for some discount repayments because they do not want to enter into litigations that could prove to be expensive in nature and they might well end up spending more than what they recover. Thus it is normally a beneficial situation for the debtor and that is the direct link between debt consolidation and credit repair.

Pitfalls to be Avoided

However, the debtor who finding no other way has opted for the debt consolidation method to get out of the debt abyss has to trade with due care and caution. There are certain inherent pitfalls that need to be avoided as the credit consolidation can end up adversely affecting the credit record of the debtor and that will be another stumbling block against his financial prospects.

Bottom line of all these is that debt consolidation and credit repair will complement each other when the debtor finds an efficient and professional consolidator who will function in such manner that the debt consolidation will be effected resulting in credit repair and it will not adversely affect the credit scores and credit record of the borrower.

Credit repair is important in helping you save money and in securing a better financial position. Various credit repair companies are available to offer help though you can take the vital steps yourself too.


Article Source:

Rate this Article: 
Bad Credit Debt Consolidation Under a Debt Consolidation Loan
Rated 4 / 5
based on 5 votes

Related Articles:

How to Repair Your Bad Credit With Debt Consolidation

by: Milo Lawrence (May 15, 2007) 

Credit Repair Companies and Debt Consolidation and Do They Really Do Anything

by: Amy Pedersen (April 13, 2007) 

Using Debt Consolidation For Fast and Effective Credit Repair

by: Michael Demarkks (June 26, 2008) 
(Finance/Debt Consolidation)

Loan With Bad Credit - Debt Consolidation Loan to Help Towards Credit Repair

by: Julian Lim (August 14, 2008) 
(Finance/Debt Consolidation)

Credit Card Debt Consolidation - Does Consolidation Or Debt Settlement Make ..

by: Matt Couch (March 25, 2010) 
(Finance/Debt Consolidation)

Debt Consolidation - Is Credit Card Debt Consolidation A Good Idea?

by: Ivan Calderwell (March 08, 2007) 

Debt Consolidation Loans Bad Credit-Is It Possible To Get Debt Consolidation ..

by: Josh Neumann (August 22, 2007) 
(Finance/Debt Consolidation)

Repair Your Debt Problem With Debt Consolidation Loans

by: Eric Hector (January 03, 2007) 

Best Free Debt Consolidation - A True Liberator

by: Asheesh Mani (December 10, 2007) 
(Finance/Debt Consolidation)

Bad Credit Debt Consolidation Under a Debt Consolidation Loan

by: Charles C. Parson (May 14, 2007)