Consolidation Services vs. Traditional Loan Options
If you are interested in debt consolidation then you should consider your options. Basically, you have two options that include using a debt
consolidation service to help you pay your bills or borrowing money to pay off all your debts. The big decision maker will more than likely be
your credit rating and whether or not you could qualify for a debt consolidation loan or not. If you can, then this might be the best option if
you qualify for a low interest rate. If not, then perhaps the best option is a debt consolidation service. Consider the pros and cons of each
option below before you make up your mind.
Debt Consolidation Services
There are a variety of pros and cons that are associated with debt consolidation services and they should be considered before making a decision.
The following information shows the cons as well as the pros to this choice and will help you make a choice.
Cons of a Service:
Pros of a Service:
- It is possible that all of your debts will not qualify for the service, especially certain unsecured debts.
- Also, your credit rating may be impacted negatively by using a debt consolidation service.
- In addition, you must meet certain debt minimums as set forth by the consumer debt service.
Borrowing to Reduce Loans
- Your payments are reduced immediately and this provides considerable relief for many families.
- Money management skills are frequently learned and people don't find them in the same situation again.
- Many times interest and fees are reduced.
- Debt collection calls and actions are reduced in many situations.
There are also pros and cons to borrowing money to reduce your loans. Consider these before taking action.
Cons of Borrowing:
Pros of Borrowing:
- Your debt is not eliminated, simply structured in a new way.
- You must have a high enough credit rating in order to be qualified for the loan.
- If you can't make the payments it is possible to lose your home or any other collateral.
- Once you clear credit card debt and start making a loan payment it is easy to overextend yourself with the credit cards again.
Making the Decision
- There are no more phone calls, letters, or actions from the credit card companies trying to collect payment.
- Multiple payments are reduced to one monthly payment immediately.
- And the best of all is it won't hurt your credit rating and stands a good chance of improving it.
As you can see making the decision to consolidate your debt via a debt consolidation service or with a loan can be difficult, but at least the
options exist to help you. The best thing for you to do is evaluate the pros and cons of each and make the decision that best fits your personal