The multiple options available to consolidate one's debts can be quite confusing; credit counseling programs, debt settlement, debt consolidation loans, bankruptcy are just a few options available today. Trying to find the best option to suit your current financial situation can be a difficult task.
Typically, credit counseling programs are debt repayment programs. They can consolidate most types of unsecured debts from major credit cards to personal and student loans. You choose the accounts you want to enter into the program when joining. Once enrolled, the company will contact your creditors to negotiate more favorable repayment terms on your accounts including a reduction in your interest rates and the elimination of late fees. You will then send that company one lump sum payment monthly which they will disperse to the creditors you enrolled on your account when joining.
Most so called debt consolidation loans are just home equity loans in disguise. They use the equity built up in your current home loan and use it to repay all of your unsecured debts. These types of loan options usually come with heavy application fees and can greatly extend the amount of time it will take you to pay off those debts. These loans also convert all of your current unsecured debts into on secured debt which is now backed by your home. If you fall behind on your payments you could risk losing your property.
So if you need to get yourself out of debt. A debt consolidation program is the way to go. Loans can get you even deeper in debt than you already were in.
Writing financial and debt consolidation articles for over 10 yrs. Been in the credit counseling biz for as long as well.