Credit
Consolidation
Services
Credit Consolidation Loan
For individuals
in a bind because of a job loss, an extended illness,
a divorce or other major life experience, a Credit
Consolidation
loan can be a way to dig out of a hole they never thought
they'd fall into. But experts say far too many people
use them simply to delay the inevitable.
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American Debt Foundation
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Credit Consolidation Loan
illusion
"A Credit
Consolidation loan makes sense if you use it to get out
of debt and you have a plan, but not to get back in the
same situation," says Sean Q. Hawley, president and
CEO of the National Debt Counseling Corp. "The problem
with these loans is you're living beyond your means and
you're just postponing the day you go bankrupt."
In fact, up to 25 percent of people filing for bankruptcy
appear current on their bills because they're taking out
new credit cards or cash advances to pay their old debts.
Borrowing more money through a Credit Consolidation loan
to pay off other debts can be a disastrous mistake for
some people. People need to truly understand what they're
getting themselves into. If done wrong you can end up
being in a worse situation than when you started.
Credit Consolidation
Loan = Betting Your House
The most dangerous
Credit Consolidation loan is an equity loan that uses your
house as collateral for the loan. While it sounds simple,
it's really quite a risk because of the potential for
foreclosure.
If you are like most people, your home is your largest
asset. Putting your home at risk with a Credit
Consolidation
loan really doesn't make much sense.
Credit Consolidation
Loan fees and closing costs
Finance companies
that deal mostly with Credit Consolidation loans are the
worst options for people in need of a loan. The fees and
closing costs they charge are very high. Also pay close
attention to the difference between the interest rate
they offer you and the annual percentage rate.
Credit Consolidation
Loan warning sign
Consumers should
stay far away from any finance companies or websites that
discourage borrowers from visiting a non-profit debt counseling
service such as ours. Some of these company websites say
is that you don't want to go to a non-profit debt counseling
service because it will show up on your credit report.
That is just a false alarm! Most people who go shopping
for a Credit Consolidation loan already have plenty of problems
with their credit reports.
The reality is that people don't get into debt overnight,
and a Credit Consolidation loan won't help you a bit if
you don't change the way you spend money.
Be very wary of using a Credit Consolidation loan service.
Our non-profit debt counseling office will be happy to
help you develop a comprehensive budget and repayment
plan, work with your creditors, and help you get back
on your feet.
American Debt Foundation