Does debt consolidation work
Does debt consolidation work?
Debt consolidation is often touted as a great strategy for eliminating debt. It involves taking on a new debt to pay off multiple old debts. But does debt consolidation work? Debt consolidation does work well for some people. But for many others it's not the most effective way to settle credit card debt or pay off loans. For some, it can even increase the amount of time and money it takes to pay off their debt.
How does debt consolidation work?
Debt consolidation can work in several ways. Individuals can take out a loan, ideally at a lower interest rate than the existing debt. The problem is that sometimes the terms of the new loan require the individual to pay more in interest over the course of a loan. Another kind of debt consolidation is a balance transfer, where consumers pay off multiple credit cards by taking out a large balance on a new credit card at a favorable interest rate. However, the fees for this are expensive, and few people can actually pay off the new debt before the finance charges jump back up to a high amount.
Whether you're trying to sort out debt consolidation advantages and disadvantages or compare debt consolidation vs. debt settlement as the best way to pay down your debt, you'll find helpful advice from the financial professionals at American Consumer Credit Counseling (ACCC).
ACCC does debt consolidation differently.
ACCC is a non-profit organization that provides free credit counseling and low-cost services to help consumers pay off their debts and learn how to live debt-free.
What is credit counseling like at ACCC? When you speak with our certified credit counselors in person, or by phone, we'll take a look at your situation and provide you with an analysis of your complete financial picture. We'll answer your questions, such as "does debt consolidation work?" and "what are advantages of debt consolidation vs chapter 13 bankruptcy?" We'll also help you evaluate all the options available to you for paying down your debt, and work with you to choose the one that makes the most sense for your situation.
How does debt consolidation work at ACCC?
At ACCC, we offer debt management services – a form of debt consolidation that does not involve taking out a new loan. Under a debt management plan, you'll consolidate all the monthly payments you make to creditors into a single payment to us, and will pay each of your creditors for you. This helps to simplify your finances, makes it easier to keep up with your debt payments, and lets us work with your creditors to reduce finance charges, interest rates and other fees. Many of our clients have found that this kind of consolidation of debt payments has enabled them to pay off their debt in five years or less.