Steer Clear of Debt Consolidation

Robert A Johnson asked:


Debt consolidation, the process of rolling all or most of your unsecured debt under a larger loan, is becoming increasingly common in this consumer driven debt-laden economy. Beware!!! Debt consolidation is not what it purports to be.

Here are several reasons to avoid debt consolidation:

• Many debt consolidation companies carry hidden fees and charges.

• Some debt consolidation companies will keep your first monthly payment.

• Debt consolidation will severely affect your credit rating.

• Debt consolidation gives many consumers a false sense of debt freedom.

• If you default on debt consolidation, you could lose your home.

In light of these reasons, it is advisable for consumers to use another method to get out from beneath their debt.

Debt settlement, the process of negotiating with your creditors to pay a fraction of your debt, allows consumers a way to quickly shuffle off their debt.

Snowballing would also be preferable to debt consolidation. This process involves paying the minimum balance on those cards with the highest balance, while focusing the majority of your extra income on paying down those cards with the lowest balance.

Whether you settle, snowball, or just pay your minimum balances, anything is preferable to debt consolidation.



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