Debt Consolidation and What It Can Do For YouDebt consolidation, how it works and what it can do for you is the subject of this story.
Get Started With Debt Consolidation: http://www.nationaldebtreliefprogram.org/ Credit Counseling In credit counseling, also known as a debt management plan, you would meet with a financial counselor who analyzes your debt load and then contacts each creditor on your behalf to arrange for reduced interests rates and a lower monthly payment. You make one monthly payment to the credit counseling agency who then divides it between your creditors based on the amount the creditor agreed to accept. There is a usually a start-up fee and a monthly maintenance fee to take part in a credit counseling program. Debt Settlement In a debt settlement, which may also be referred to as loan forgiveness, the borrower agrees to accept a reduced payment for the debt, which is usually paid in one lump sum, and to write-off or "forgive" the rest. There are debt settlement agencies who can approach your creditors with these offers or you may do it yourself. Creditors are usually open to working with you if there has been a hardship or they have been unable to collect anything from you in spite of paying for the services of a collection agency. Get Started With Debt Consolidation: http://www.nationaldebtreliefprogram.org/ One thing to keep in mind is that for tax purposes, if the amount that is written off exceeds $600, the Internal Revenue Service considers this income and it will be taxable. The company who wrote off the debt should send you a miscellaneous income form at the end of the year to file with next year's taxes. Unsecured Debt Consolidation Loans This type of loan is one where you do not offer any type of collateral (for example, your car or home) to the lender in case of default on repaying the loan. As a result, interest rates can be higher than other types of loans. Many consumers turn to unsecured debt consolidation loans as a means of paying off all of their credit cards, installment loans, etc. After all of your other accounts have been paid off, you then make one monthly payment to begin repayment of your debt consolidation loan. Secured Debt Consolidation Loans With these types of loans, which are alternately referred to as a home equity loan or a mortgage refinance, you would borrow funds against the equity which has built up in your home. Since the borrower has the security of knowing they can repossess your home if payments fall behind, they are usually offered at a lower interest rate than an unsecured loan. The proceeds from the loan can then be used in the same manner, which is to pay off all other existing debt and then make one monthly payment on the home equity loan. Now that you know about the four types of debt consolidation programs available, it is time to take action to consolidate debt today. National Debt Relief Program offers a free debt analysis which can be taken advantage of at their website: http://nationaldebtreliefprogram.org/ End
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