subject: How To Use Debt Consolidation To Reduce Your Monthly Payments [print this page] There are not many debt consolidation lenders online that assist debtors in reducing their debts. People who possess their own homes and who are struggling with excessive debt can utilize the equity in their property as collateral to obtain a secured loan and payoff their debts.
Debt consolidation loans are offered to the debtor in order to repay the debts; and then each month the debtor will make a payment to payoff the consolidation loan. Putting it simply, all your bills will be worked out and combined into a single monthly installment. It is likely that credit card debt will be a large part of the debt you wish to consolidate. Credit cards carry a large interest rate with them and consolidating them into a low interest loan will save you heaps of cash on its own, but if you have personal or home loans or any of the many different types of loans available, they too can be rolled into a single loan payment.
The applicaton process can be quite long and very tedious but a few debt consolidation companies make the process a lot easier and offer much shorter applications; these applications are linked to someone who has expertise in consolidation and they will search for the ideal product for your specific application.
Money Management International (MMI) is one such company, they are one of a number of organizations offering nonprofit consumer credit counseling services to debtors. Nonprofit organizations are often the safer option than using the organized services.The best way to check out the reputation of any company you are thinking of dealing with is by checking them out with the better business bureau. MMI just happen to be a member of the better buisness bureau and that is why I have used them as an example here.
Once you have found a debt consolidation reduction organization that can help and your application is approved, the process of reducing your debt begins. The experts at these companies will work with your creditors to negotiate reduced terms often asking for leniency. It isn't uncommon for negotiators to try and target a reduction of around 50% although this depends on the amount that the debtor can comfortably afford to pay each month and can be less than or more than 50 %. Whatever the outcome, a reduction in monthly outgoings and a more manageable debt will be the outcome.
Although debt consolidation will reduce the amount you pay in bills each month it still won't correct the spending habits that forced you to seek consolidation in the first place. Once you have got your finances back on track, analyze and correct your spending habits, especially how you use your credit cards, to ensure you do not end up in a similar or even worse situation than you were in previously.
by: Daniel Major
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