Debt Consolidation Options
Know Your Debt Consolidation Options Before You Make a Decision About Consolidating
If you're looking to consolidate credit card bills, medical bills, and other types of unsecured personal debt, you have a variety of debt consolidation options. Many consolidation options involve either a debt "settlement" or taking out a loan. Consumers have good reason to steer clear of these debt consolidation options.
Settlements and Loans: Debt Consolidation Options Fraught with Risk
If you're overwhelmed by personal debts, a debt settlement solution may seem appealing: providers of this type of service tell you that you can pay off just a portion of your debt rather than all of it. But as always, there's no free lunch. Debt consolidation options based on settlements have many problems and risks including:
- To reach a debt settlement, you need to make a large lump sum payment. If you're having financial problems, you may not have the funds for such a payment.
- Debt settlement can be very damaging to your credit rating.
- Your creditors are not obliged to participate in the settlement, and some may refuse to.
- Providers of this type of service often charge steep fees.
There are also significant problems and risks associated with loans for debt consolidation. For example, if you're in a position where you're seeking to consolidate multiple debts, you may have a sub-par credit rating, which means you'll pay a high interest rate for your consolidation loan. Also, if you borrow money to pay off your existing credit cards, those accounts can remain open and you'll have the very real temptation to start using those paid-off cards again – so you may end up with credit card debt on top of the consolidation loan debt. Worse, if you use home equity to secure a consolidation loan, failure to keep up with the loan payments could eventually put your home in jeopardy.
Better Debt Consolidation Options from ACCC
Fortunately, settlement and loans are not your only debt consolidation options. American Consumer Credit Counseling, a non-profit organization devoted to helping individuals and families in financial difficulty, offers a proven debt consolidation program that enables you to meet your obligations to creditors without borrowing money. How does debt consolidation work with ACCC? It's simple and effective:
- ACCC negotiates with your creditors not to reduce your principle owed, but rather to reduce interest rates and any outstanding late fees or over-limit fees. In many cases this can have the effect of reducing your total monthly obligation and the time it takes to pay off your debts.
- You make one consolidated payment to ACCC each month, and we then pay each of your creditors.
- We provide you credit counseling and educational resources to help you strengthen your credit management skills and stay on track toward a future free of excessive debt.
Our simple, effective debt consolidation options have been helping American families turn around their financial lives since the ACCC was created in 1991. Our commitment to consumers is demonstrated by our A+ grade from the Better Business Bureau and by the outstanding credit counseling reviews and debt consolidation reviews we've received from satisfied clients.