Credit Card Debt $ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+ Other Unsecured Debt $ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+ Number of Creditors    Select One 2 3 4+ Status of Bill Payments    Select One Up to Date About to Fall Behind 1 Month Behind 2 or More Months Behind I want to    Select One Eliminate My Debt Consolidate My Debt Seek Advice Own a Home?    Yes  No

Debt Consolidation - Homeowner Debt Many Americans are facing financial problems due to excessive debt. Some are simply looking to stop their debt from becoming a problem. Debt consolidation is the process of using one loan to pay off several loans. Consolidation often results in a lower interest rate, a fixed interest rate or the convenience of paying only one loan. Debt consolidation can involve one unsecured loan to pay off several unsecured loans. For example, you may transfer the balances of several high interest rate credit cards to a card with lower interest. Most of the time, debt consolidation is seen as the usage of a secured loan to pay off unsecured debts. For example, one may take out a mortgage on a home in order to pay off credit card debt. The loan allows for a lower interest rate, due to the collateral on the note reducing the risk of borrower default. Debt consolidation companies work with borrowers to consolidate debt. They can often discount the amount owed on the loan. When a debtor is in danger of bankruptcy, debt consolidation companies can often purchase the loan from the creditor at a discount. Consumers should shop around for debt consolidation companies that pass along some of the savings. However, consolidation can prevent the ability of a debtor to discharge debts in a bankruptcy. Consumers should consider this form of consolidation carefully.

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Due to the benefits of debt consolidation for consumers with high interest debts, companies often charge high fees in refinancing situations. These fees are often at the state maximum for mortgage fees and charges. There are unscrupulous companies will wait until the consumer has no other options and must refinance in order to pay off debts that they are behind on. If the client does not refinance, he faces the loss of his home. This results in paying any fee possible to refinance for debt consolidation. The client isn't always given enough time to shop around for lower lending fees and may not truly understand the costs. This predatory lending is rare, but should be on the consumer's mind. Debt consolidation is a financial process of combining, or refinancing, an individual's currently existing loans and debts (such as credit cards), and personal loans into a single loan having a total loan amount of the sum of all the loan amount and balances. Some financial experts have been rallying that debt consolidation is generally a more advantageous move in lieu of multiple loans and debts. With a consolidated portfolio of debts and loans, individuals usually negotiate for a lower interest rate since there is only one outstanding debt, eventually decreasing the monthly due he or she has to pay. Remember, however, that as any financial decision, debt consolidation contains many probable risks and dangers. Below are some things one should be wary about when considering a debt consolidation option: ¢ Debt consolidation is not short-term; yes, repayments drop, but it will take longer to pay off outstanding debts. ¢ Some agencies offering debt consolidation may trap you into believing that it is easy to get debt consolidation. ¢ To some degree, you reap benefits from Day 1 as you see a reduction in your overall payments from the start. Some credit agencies offering debt consolidation may also offer "to take care of everything", that is, negotiating for lower interest rates, and reducing your monthly payments by making one "EZ" payment. Think about this as this is something you can do without the intervention of these agencies. Before making a call to a debt consolidation agency, you may browse through some simple options you can exercise that would serve as your best debt consolidation moves. Take out a home loan. Most home equity loans carry special terms and conditions, like requiring borrowers to pay fees ranging from $70 to hundreds of dollars, not to mention the cost of title insurance and appraisal. The good thing about home equity loans, though, is that they carry relatively low interest rates, and that the interests are tax-deductibles. Opt for "cash-out" refinancing. One of the less picked options is to refinance your home for a larger amount than your debt and use the extra money to pay off the debt. With this move, you get lower interest rates, and payments can be stretched from 15 up to 30 years. This is seldom chosen as an option since the total interest over 30 years will surely be big. Go for auto-refinancing. Refinancing your car is a secured loan, the only danger being that you may lose your car before you lose off your debt. Apply for a personal loan. This option goes well for those still with a fairly good credit standing. Most credit unions offer lower rates than bank agencies, but still interest goes at 11% or higher. However, that still is significantly lower than the 20% from the card companies. Lastly, but never the least, is to seek out financial advise from credit counseling organizations such as the National Foundation for Credit Counseling. Most of these credit-counseling groups are non-profit and community organizations providing individuals free and confidential advice on debt management. Like most debt consolidators, creditors pay credit counselors like the NFCC, making it their best interest to plan out a repayment scheme than advise on declaring bankruptcy. These credit counselors do not offer seamless solutions, but rather sound financial advises to slowly, but surely pay off your debts.