Credit Consolidation-Understanding The 4 Ways To Achieve Your Financial Goals

With our economy continuing to be in a downtrend, Americans are more freely using credit consolidation as a way to deal with their debt issues. This market is continuing to add new places of business every week as things worsen for the average person. If your looking for a way to get out from under your debt then stay with us as we will be explaining the 4 ways in basic terms people are using to achieve their financial goals.

Let’s start right out of the chute by discussing refinancing or HELOC (home equity line of credit) in order to achieve credit consolidation. I remember when this was probably the easiest and most popular of all, not so anymore. When the value of homes soared, and banks were handing money over rather easily, homeowners were very comfortable using this option. Then that bubble burst, or perhaps I should say exploded. No matter what part of the country you live in (with very few exceptions) the value of a home is decreasing and the prospects of getting a loan (for most people)are dwindling, making this option not as attractive as it once was. There is a major pitfall to this even for those people who can meet all the new restrictions that we still need to let you know about. As we all know by now, when we least expect it, the unexpected happens. The reason why I am mentioning this is because if something unforeseen should occur in your life (job loss, tragic loss in family that results in loss income, illness etc.) this could put your home in jeopardy. I know I just gave you a lot to think about, so please take your time while considering this as an option before deciding on what is best for you.

Now lets move on to the next method for achieving credit consolidation. It’s referred to as debt settlement and you will find it to be rather soothing compared to our earlier discussion. The relative ease of joining them compared to some of the other credit consolidation services makes this one a very attractive alternative. Once in a program, consumers do receive several benefits from them. Lower monthly payments, reduced amount of debt owed, combined with the elimination of late fees and interest charges will equal a debt free life rather quickly for the consumer. There is a drawback to this as well, until your accounts are settled it will affect your credit rating. A quick plus note here. It surely beats the heck out of the alternative, bankruptcy. Now lets turn that frown upside down. Your worthiness and credit rating will be restored to a better place in time once you have finished up with your obligations to the program.

A debt(or credit) management plan(DMP)is also a pretty popular way for people who are seeking credit consolidation as a way to relieve them of their money woes. Benefits will include lowered interest rates, no more late charges and over limit fees, plus your debt will be combined, which will make paying your bills every month so much easier.(1 monthly payment as opposed to many). When using these types of credit consolidation services your credit rating will be protected while your in the program. It will generally take the average consumer about 3-5 years until they become free from their debt.

We are going to finish this up by next talking about consumers least favorite method of all when discussing credit consolidation . What I am speaking about is a personal loan. This is the least favorite just because of it’s nature. Since it is an unsecured loan it will be more difficult to obtain one and the amount you get will probably be for much less then if you tried another method. Since your home is not being used as collateral this puts the risk squarely on the lender. The consumer will in turn be charged at higher interest rates. When comparing them all together its not hard to see why consumers just don’t like this way as much as the others. I guess the one plus would be you would not need collateral, therefore you would not be putting your house in jeopardy. If your trying to regain control of your finances then you may want to check out at least one of the 4 credit consolidation services or methods we just discussed.