Debt Consolidation Information

There is a lot of confusion about what debt consolidation is and what it can and cannot do. Please look over this debt consolidation information before making a final decision if it is the right service for your debt problems.

Many people have a lot of different ideas what debt consolidation is, but basically debt consolidation is taking out one loan in order to pay off a number of other loans. This loan can either be secured or unsecured and both are discussed in further detail below.

Secured Debt Consolidation Information:

With secured debt consolidation, in order to obtain the loan, you must provide some sort of collateral that has a value is in excess of the loan amount. Usually this will be a property you own, but for smaller loans a car title might suffice. Generally speaking the interest rate tends to be lower, but the payment amount is fixed and payment terms tend to be 5 years.

The potential pitfalls of this are that missing a payment can have serious penalties including raising the interest rate or even removal from the program. Even more serious is the fact that if you cannot make payments, then the debt consolidation company can potentially repossess your house or car in order to satisfy the terms of the loan. Basically you are replacing an unsecured debt with a secured one and go from a negotiable position to a situation without the possibility of negotiating.

Unsecured Debt Consolidation Information:

With unsecured debt consolidation, there is no collateral for the loan however to balance this, the interest rates tend to be much higher, usually ranging between 15 and 23 percent. Also because this is an unsecured debt, your credit worthiness is much more important and your credit score and credit history will play a large part in determining if you qualify for a loan and the terms you get. Also while it won’t hurt your credit score to take out a debt consolidation loan, it will greatly affect your credit worthiness and you ability to qualify for more credit.

Information on Debt Consolidation Alternatives:

If the downsides of debt consolidation outweigh the benefits for you in your particular situation, there are a number of different debt relief programs that may be a better fit. The options range from simple credit counseling to bankruptcy. Most often the service that works best for many people is debt settlement. With debt settlement, a settlement is reached with the creditor to pay back a portion of the debt and after that, the debt is considered canceled.

CuraDebt has been providing debt settlement and other services to people across the country for over 15 years. In that time they have built a reputation for high customer satisfaction and customer care. They are one of the top rated companies on Top Consumer Reviews and have been given over 690 positive 5-star ratings on Customer Lobby. CuraDebt offers a free consultation to find the best solution for you. They will give you complete debt consolidation information as well as all the other alternatives available to find what is your best fit.