What's the Best Solution When You've Got Debt to Consolidate?
When your debt piles high and the bills and calls are coming from creditors left and right, it may be time to consider debt consolidation. With your debt consolidated, you'll have just one monthly payment to make, so it's simpler to manage your debt and fit it into your overall budget planning. But when you've got debt to consolidate, you first need to decide which type of consolidation approach to use.
One common approach is this: when you've got too much credit card debt, consolidate it by taking a loan. This may mean opening a new credit card to pay off all the others; or taking a personal loan; or getting a home equity loan on your house.
While this type of solution is often promoted by lenders or some debt relief companies, there are substantial problems with borrowing more money when you've got debt to consolidate:
- If you're in need of debt consolidation, your credit scores may be low and you're likely to pay a high interest rate on your consolidation loan.
- Debt consolidation approaches that require borrowing often stretch out your repayment period so that ultimately you pay far more in interest than you would have if you hadn't consolidated.
- With your debt consolidated by taking out a loan, your paid-off cards will remain open. If you use them, you'll have to pay off those new balances plus the loan you took, and you will fall even deeper into debt.
- In the worst scenario, debt consolidated by a home equity loan can put your home at risk if you're unable to keep up with the loan payments.
Turn to American Consumer Credit Counseling to Have Your Debt Consolidated
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling and debt consolidation agency with an A+ rating from the Better Business Bureau. If you've got debt to consolidate, you can do it through the ACCC without borrowing more money. How does debt consolidation work with ACCC? It's simple:
- We negotiate a plan with your creditors that will often reduce your interest rates and eliminate existing late fees and over-limit fees, thus lowering the amount that you'll ultimately pay on the debts.
- Each month you make one payment to us and we pay your creditors.
- To use ACCC's non-profit program for unsecured debt consolidation you'll pay a $39 one-time enrollment fee and a monthly maintenance fee of $5 per account – the lowest effective rate structure in the industry. In some cases fees may be waived if you a veteran, active military, or in financial hardship.
In combination with our debt consolidation program we provide credit counseling and educational resources, including a self-directed credit counseling course called the Financial Peace of Mind program. Our services have been highly effective in helping individuals and families get back on their feet financially, as evidenced by the glowing credit counseling reviews and debt consolidation reviews that ACCC has received from happy customers over our 22 years in business.