Debt Consolidation

Debt consolidation, simply put, is taking out a loan to pay off other debt. This is often done to save money that would normally be paid on interest.

Debt Consolidation & Debt Settlement company's take on the huge responsibilities dealing with your Credit Card companies. These companies deal with creditors on a daily basis and can save you potentially thousands of dollars letting their negotiators work on your behalf. If you would like more information on Debt Consolidation & Debt Settlement please call one of our experienced Debt Consultants to consult with you on your financial needs. Debt Settlement America is here to help you structure a financial budget. You can also learn more about Consolidation and Settlement throughout the DSA website.

Some of the downsides to debt consolidation are as follows:

• Debt Consolidation loans transfer the debt from one account to another and typically takes unsecured debt(s) and changes it into secured debt (usually your home). If you do not have enough equity (typically 25 - 30% LTV), bad credit, or too much debt, it is not likely that you will be approved for a debt consolidation loan.
• Statistics have shown that about 70% of people who obtain a debt consolidation loan find themselves in deeper debt than they were originally in within a two year period. You cannot borrow your way out of debt. Ask yourself why you would want to go from an unsecured loan to a secured loan to be paid over a longer period of time?
• The main problem with consolidation loans is that once you have paid off the credit cards you have a whole new source of spending power: $0 Balance credit cards. Many people lack the discipline to avoid incurring any more credit card debt, leaving them in a worse financial situation. You end up not only having to pay back the cards but also the consolidation loan.
• If you start missing payments on the consolidation loan, you stand to lose the asset (usually your home) that the loan is secured against.