What Is Debt Consolidation?
For anyone who is carrying too much consumer debt, debt consolidation may be a helpful option. However, there are some things you should know before you consider debt consolidation to reduce credit card debt and other unsecured debt.
At American Consumer Credit Counseling (ACCC), we're dedicated to helping consumers understand how to manage money effectively and how to eliminate debt. As a non-profit organization, we offer affordable debt management programs as well as comprehensive information about debt and debt relief. Based on our extensive experience and expertise, here's a quick overview of what debt consolidation is all about and what to look for in a debt consolidation program.
What is debt consolidation?
Debt consolidation involves combining the money you owe on credit cards, department store cards, personal loans and other unsecured debts into a new debt or loan.
What is debt consolidation intended to do?
When you consolidate debt, you can make one payment each month rather than many payments to multiple creditors. As a result, many people find they can keep up with their payments more easily and reduce the stress of owing lots of money to many people.
How do you consolidate debt?
There are a number of ways to consolidate debt. Some companies will consolidate your debt in the form of a loan. Credit card companies will offer to transfer and consolidate your balances onto one card. Both of these options can leave you more deeply in debt, as the fees and interest rates may be high depending on your particular financial picture.
How can I consolidate debt without getting deeper in debt?
Rather than debt consolidation, you may want to consider a debt management program. In a debt management program like ACCC's, your unsecured debt is consolidated to a single amount, but you do not need to take out a new loan or take on more debt.
How do I get out of debt with a debt management program from ACCC?
When you enroll in a debt management program with ACCC, our counselors will work with you to evaluate your finances and help you create a workable budget to pay down your debt. We'll consolidate your unsecured debt so you can make one payment each month to ACCC, and we'll disburse funds to creditors on your behalf. We'll also work with your creditors to secure possible reductions in interest rates, late fees and other charges so you can pay off your debt faster.
How do I get started?
To learn more about a debt management or debt reduction program and to get answers to questions like "what is debt consolidation?" and "how can I improve my credit score?", contact us to schedule a no-charge consultation.