What is the best way to consolidate my debt?
Debt consolidation options include credit counseling program, debt settlement, loans or bankruptcy. Generally speaking, most are debt repayment programs, which can consolidate unsecured debt from major credits cards and personal or student loans. You choose which accounts you want enrolled in the program and the company contacts your creditors to negotiate acceptable repayment terms and hopefully reducing your interest rates and late fees. Then, you send that company a lump sum monthly which they disperse to the enrolled creditors. Be wary of debt consolidation loans in disguise of home equity loans. Basically, the company uses the equity built up in your current home loan to repay your debts. The loan usually comes with hearty application fees which can extend your debt even further. In essence, your home is now at risk because all of your unsecured debts are a secured debt backed by your home. If you falter in payments, you could lose your home.
