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Make Your Credit Card Debt Affordable

Apr 8, 2008
Credit card debt is a growing national problem. Several companies report that over 50 percent of credit card accounts are 90 days or more past due. For those who have overextended spending with credit cards, a credit card loan consolidation program might be the answer to resolving the debt in a more affordable manner.

The goal of a credit consolidation program is to combine the loan debts and make one monthly payment that can be paid off in just a few years (about 3-6 years in most cases). Consolidating debt often qualifies for lower interest rates based on the amount of the combined loan.

Before you agree to consolidate, always do your homework to make sure the new loan isn't costing you as much or more than the individual loans were. There are disreputable companies out there that will try to avoid giving you the best rate, so shop around before making a decision and don't sign on the dotted line in an emotional moment only to regret it later. By figuring the total monthly payments you are currently making you can easily compare that to the proposed consolidation amount, thus determining which the best option for you is.

Once a consolidation loan program has been chosen, it is important that monthly payments are made as scheduled. One payment will be made on the consolidation loan program and the provider of the consolidation will pay the creditors on your behalf.

Late payments will put the loan status in jeopardy and the creditors may have the option of resuming collection activities or increasing the loans interest rate as a result. Stay in touch with the assigned credit counselor (or "consolidation specialist") and keep him/her abreast of any situations or changes. This will prevent the account from being returned to collections for payment.

Though your consolidation program is making your payments for you, it is still your responsibility to read the monthly statements from your creditors. Your interest rate should be reduced and you should no longer be accruing late fees. If either of these doesn't look right or the consolidation company isn't paying the right amount, contact your counselor to discuss the problem. company is paying your creditor the right amount.

There are quite a few different debt consolidation loans, and the right one for you will depend on your specific situation. Some loans have a higher monthly payment for a short period of time while others offer a lower payment spread out over several years. Let common sense prevail here and look for the loan with a monthly payment you can afford.

Some companies offer a fixed interest rate and disallow principal payments, which can reduce the loan more quickly. Look for a loan consolidation program that will allow you to pay more when you can!
About the Author
Thinking about loan consolidation? Check out www.allaboutloanconsolidation.com and learn about Credit Card Counselling , unsecured loan consolidation and other related subjects.
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