Consolidating credit card debt pros and cons
When a settlement is reached, the funds you have been setting aside go toward paying your creditors and negotiation fees.
Companies usually attempt to lower your debt through debt settlement before recommending you take out a loan.Additionally, the debt management company contacts your creditors and attempts to negotiate lower interest rates on your behalf.Lower interest rates allow you to more quickly pay off your debts.After 100 hours of researching and calling debt consolidation companies, our top choice is National Debt Relief, which is one of the most transparent companies we spoke to.It offers top-notch customer service and its costs and fees are well in line with industry standards.Most often, the required collateral is a second mortgage or a home equity line of credit.
This is incredibly risky because if you cannot meet your payments, your home is on the line.
Furthermore, if you have bad credit, debt consolidation loans may come with high interest rates.
In addition to putting your home at risk, many consumers end up prolonging their debt.
On $10,000 of debt you can expect to pay anywhere between $1,400 to $2,500 in fees.
You’ll only pay fees when debt is settled successfully.
New Era Debt Solutions is another standout company.