Credit Consolidation and TheTop 4 Ways to Regain Control of Your Finances

Author: mcl1424 | Posted: 23.12.2011

Americans are using credit consolidation more than ever before to help them with their debt as our economy continues to plummet. The rate of which new businesses are opening up in this market is hard to keep track of these day’s. There is one thing for sure though, the numbers are huge. What we would like to accomplish here is rather simple. Without taking up to much of everybody’s valuable time, we will discuss the 4 most used methods consumers are utilizing to get back on strong financial grounds once again.

Refinancing or a home equity line of credit (also known as HELOC) is a way to achieve credit consolidation that we will discuss first. Sad to say that it was just a short time ago that this strategy was most likely the most popular and easiest way to do this, not anymore. When the value of homes soared, and banks were handing money over rather easily, homeowners were very comfortable using this option. Talk about times changing, we went from one end of the spectrum to the other end in probably record time. With the banks increasing the loan requirements (most would argue just a wee bit stringent) and with the value of homes coming back downas fast as they went up, this is definitely not the viable option or cure all it was not so long ago. Okay wait for it folks, here it comes, the old catch 22 that you just knew was on the way because there is a certain risk with this that most people are very uncomfortable with even if they do have the credentials to qualify. The problem with this method is actually rather frightening (if something unforeseen should arise affecting your income), you don’t need to be concerned about your credit here folks, the real issue to be worried about here is the loss of your home. I know this will not be the most pleasant thing you will hear today, but you must take it all into consideration during your thought process if you are thinking about this option.

Relax everyone, the next method of credit consolidation will not hurt a bit, I promise (does debt settlement sound familiar to anyone). I think the popularity with these credit consolidation services keeps on increasing because of the ease to find and enroll into them as compared to some of the other ways being offered. Consumers will be granted several outstanding benefits after they have enrolled into a program. Lower monthly payments, reduced amount of debt owed, combined with the elimination of late fees and interest charges will equal a debt free life rather quickly for the consumer. There is a drawback to this as well, until your accounts are settled it will affect your credit rating. I can say this though, it is still better than bankruptcy. Lets turn that frown upside down. Your worthiness and credit rating will be restored to a better place in time once you have finished up with your obligations to the program.

It seems as though more and more people are turning to DMP’s (debt management plans) for their credit consolidation needs as a way for them achieving their financial goals. Lets quickly examine just a few of the many benefits being offered. A reduction in interest rates, a stoppage of those harassing phone calls and being responsible for only making a single monthly payment as your debt will be combined, not bad, not bad at all. Credit consolidation services such as this will also protect your credit worthiness while you are working hard with putting your finances back to where they need to be. Usually most people will find themselves out of debt within a 4-5 year time frame, if not sooner.

We are going to finish this up by next talking about consumers least favorite method of all when discussing credit consolidation. That would be the personal loan. These are unsecured loans, meaning in all likelihood it will be much tougher to get one and the amount you receive will be much smaller then you will probably want. It’s riskier for the lender with this since you are not going to be putting your house up for collateral. What this means to you is rather simple, higher interest rates. In most cases, consumers just don’t particularly like this method when compared to the others and I’m sure you can see why. I guess the one plus would be you would not need collateral, therefore you would not be putting your house in jeopardy. That will do it, these are 4 ways credit consolidation services are helping people all over to put their finances back on the right track.



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