If you find yourself loaded down by credit card debt that you would love to get rid of then you may have been considering your options. Should you get a loan for credit card consolidation or should you use a debt payment business? Read for credit card consolidation versus debt payment business information.
Credit Card Consolidation
When you use credit card consolidation, you can get a loan to consolidate all of the debt on your numerous credit cards which will allow you to make lower monthly payments that are much less than what a credit card company would make you pay. This allows you to save money month after month.
Another reason that this could be a good option for you is credit card debt consolidation payment means that you won't be harassed by your creditors as long as you continue to make your monthly payments. Just keep in mind that you will have to cancel all of your credit cards that are included in your repayment plan. You will need to pay fees and interests just like any other loan.
Debt payment business
Also known as credit counseling is another option, especially if you are not in a position to get a loan to consolidate your debt. One big reason that a loan may not work for you is because you do not own something that could be used as collateral like a house. Unlike credit cards, banks will not make a loan without knowing that they can get their money back somehow.
A debt payment business is best used when you have had to stop making payments to your credit cards, because they will work with the credit card companies to get some of your fees and interest reduced. If the creditors think that the only way to get their money back is to work with the debt payment business then they will be more willing to make a deal. If you have not reached this point then they will ask you to not pay your credit card debt for a period of time. You should know that this will seriously damage your credit rating. Credit ratings can be restored over time, so if your credit is already bad or you simply don't have any other choice than don't worry about it. There are companies that can help you restore that as well, later when you are free and clear.
The debt payment business will ask you to send one payment to them and then they will pay your credit cards individually. Be aware that these companies often take your first payment for their fee, and sometimes charge you additional fees at the end. Also beware that some of these credit counselors are really not out to help anyone but themselves. There are a few that have been known to not make your payments on time even though you paid them on time. When this happens the only one it hurts is you.
The next step that you will probably need to take is to get a professional to look over your situation and give you advice on deciding your credit card consolidation versus debt payment business debate.
