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Debt Consolidation

Debt Consolidation Program

A debt consolidation program allows you to borrow money (a loan) to help repay your other loans. Debt consolidation programs help you organize your debts by consolidating them into one monthly payment, oftentimes at a lower interest rate. To take advantage of personal debt consolidation services you must typically have a good credit score, the ability to repay the loan and you usually need to have equity in your home.

When to Consider Debt Consolidation Services

You want to think about a debt consolidation program only when you can afford to repay the loan and understand the consequences of converting unsecured debt to secured debt. People often choose debt consolidation services to secure a lower or fixed interest rate and because they want help organizing their debts.

Remember that a debt consolidation program helps you to reorganize your debts to make it easier to pay them off. Unlike Premier Debt Solvers' debt settlement programs, consumer debt consolidation does not relieve you of your debt burdens.

The Difference Between Debt Consolidation Programs and Debt Settlement

Here are some facts about debt consolidation programs vs. debt settlement:
  • With debt consolidation payback can take as long as 10 to 20 years depending on debt balance and your ability to pay.  Debt settlement can generally be completed in as little as few months or as long as 60 months.
  • Debt consolidation programs require you to pay back the full amount of credit card balances, plus interest and any fees.  With debt settlement you can usually settle unsecured debts for about 50% or less.
  • Debt consolidation programs require ownership of a home or a pledge of collateral and defaulting on the loan could cause you to lose your home or the collateral you pledged.
  • Debt settlement requires no collateral.
  • Debt consolidation usually requires a transaction fee upon closing or it is built into the interest rates.
Remember, debt consolidation programs are loans, and they are still provided by a bank.  So the bank is going to want to check your credit and your debt to income ratio. When you carry a lot of unsecured debt you may be considered a credit risk to any potential lender. Even if you have a good payment history and have been current with all of your bills, a lender may not consider you to be credit worthy simply because of your debt to income ratio.

Debt Consolidation Programs – Not as Helpful as You Might Think

Even if you do manage to get approved for a debt consolidation program, it is often not as helpful as many people think. First of all you are simply replacing your debts with an equal amount of debt and not improving your debt to income ratio at all. Second, debt consolidation can create a false sense of security and most people just end up running up their credit cards again. This will put you in a worse situation than you were before. Not only would you owe the credit cards again, but now you would have the loan on top of it that is secured by your home. It is very easy to become overwhelmed by credit card debt and getting a loan to replace your debt with another debt simply does not make much sense.

Debt Settlement is the Debt Consolidation Program Alternative

Learn more about our debt settlement services. Request your FREE consultation by filling out our form or call 1 (888) DEBT – 530 (332-8530).  Don't wait.  Contact us now to find out how our consumer debt relief programs can help you regain control of your financial future.
 




Debts We Can Settle
  • Credit cards
  • Unsecured loans, personal loans, or lines of credit
  • Medical bills
  • Collections or repossessions
  • Business Debts

Debts We Can't Settle
  • Lawsuits
  • IRS debt or back taxes
  • Utility bills
  • Auto loans, government loans, or student loans
  • Mortgages or home loans
  • Other secured debts