2006-06-30 04:15:21 · 9 answers · asked by rachellynn200 5 in Business & Finance ➔ Personal Finance
Let's say you have 4 credit cards with varying balances and interest rates. You take a loan with a lower interest rate than the cards have and pay them all off. Now you have 1 payment instead of 4, with a total lower payment than the four combined, and probably a shorter time required to pay the debt off.
2006-06-30 04:20:59 · answer #1 · answered by Anonymous · 0⤊ 0⤋
How Debt Consolidation works:
http://www.askaquery.com/Answers/qn1643.html
2006-07-02 20:39:03 · answer #2 · answered by Gem 1 · 0⤊ 0⤋
Debt consolidation is when the consolidation company buys out your debt and charges you one price with high interest. Your best bet is to call the companies that you hold the debt with and see if they will settle for less then you owe. But if you do that have the company send you a letter stating the settlement.
2006-06-30 04:22:24 · answer #3 · answered by holykrikey 4 · 0⤊ 0⤋
Well,
Its another loan usually at a lower interest rate so that you pay off other loans...The company you borrow from actually sends the money to the accounts you are in debt to. There fore in theory you have only one payment to make...
the problem there is that if you default on even one payment they will jack the rate up to 19% if you are lucky.
As for what the poster above said about the smaller payment? Well, you actually pay a larger payment in the end. You always do.
2006-06-30 04:20:55 · answer #4 · answered by smitty031 5 · 0⤊ 0⤋
Depends on the company that you work with.
Many companies "negotiate" with your creditors in order to get you a lower monthly payment and charge you a fee to do so. In turn, what they do is take your money, hold it and wait for your creditors to accept a settlement because your account is past due. This, by the way, trashes your credit.
These companies thrive because people are always looking for some sort of quick easy fix for their financial problems.
2006-06-30 04:22:54 · answer #5 · answered by LoveMy2J's 2 · 0⤊ 0⤋
Gather all your bills ,credit card, loans and go to a bank who will loan you the money to pay off all these bills. Pretty good idea so you can get out of debt faster and instead of having 10 bills you will have only one.
2006-06-30 04:20:56 · answer #6 · answered by paki 5 · 0⤊ 0⤋
u get a loan. that pays off all your debt, all your credit cards, school loans, cell phone bills, everything. that way u now have a zero ballance on everything and only have 1 bill to pay (the new loan) instead of 6 and u avoid a lot of late fee's and such.
2006-06-30 04:23:06 · answer #7 · answered by rodie5582 4 · 0⤊ 0⤋
They help you get out of debt by paying it for you and then you pay them back over time at a smaller fee per month.
2006-06-30 04:19:43 · answer #8 · answered by Xoni 4 · 0⤊ 0⤋
There is some useful advice here.
2006-07-02 04:20:24 · answer #9 · answered by Anonymous · 0⤊ 0⤋