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Reputable Debt Consolidation Companies

Aug 6, 2008
When debt looms large and threatens to vanquish all that we have worked for a debt consolidation loan can throw us a lifeline. Consolidation loans reduce interest rates on unsecured debt such as credit cards and signature loans. Instead of a plethora of monthly payments that barely touch the principal, consolidation loans provide one payment that is significantly lower that the sum of all its parts. Often the first instinct is to grab onto the lifeline consolidation loans provide.

And they can be, but only if the borrower recognizes that this is an extreme measure. Debt consolidation treats the symptoms; it does nothing to cure the overall disease. The disease, for most people who seek relief from debt with a consolidation loan, is overspending. If debt consolidation is not accompanied by a complete change in spending habits, debt overload will return. And when it does, the options for relief dwindle.

In most cases debt consolidation does not reduce the amount of interest you pay on the debt, it reduces the rate of interest. Debt consolidation loans spread the debt over a wider range of years, typically 10 to 20 years. So, you may not, in fact, pay less interest for debt, but in reality pay more.

Secondly, what was formerly considered unsecured debt is now secured, usually by your home. If you are late or default on your consolidation loan, you risk losing your home. In addition, when real estate markets fall as they currently are doing, then between your mortgage and your debt consolidation loan, you may well have more debt than equity. This can be an extremely distressful situation to be in if you need or want to sell your home.

Debt consolidation loans can be the lifeline that puts your family back on the firm ground of financial solvency. But, if it isn't also accompanied by a radical change in spending habits and financial counseling, it can become a deadly noose. Take the first step to curbing spending by cutting up those credit cards as soon as the loan as cleared the credit card debt. This first step is a handhold financial counselors recommend that the family cut up all but one credit card when the credit cards are cleared by the consolidation loan. on the lifeline that your reach firm ground. Debt consolidation loans can be your noose or your lifeline---you decide.
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Discover how debt consolidation companies work. Save money by knowing the best tips about it which can be found at http://www.debtconsolidationtricks.com/
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