Debt Consolidation

Debt Consolidation is when you put all of your unsecured debts into a loan with one monthly payment. Most consolidations make it possible for you to pay off all of the unsecured debt with in 3 to 5 years.

But that’s if everything goes to plan! Almost 98% of the individuals who file for debt consolidation end up in bankruptcy because they never fix the real problem. Debt Consolidation is a bandaid for the behavior of over spending and spending money you don’t have. The ultimate solution is to change your spending behavior and start intentionally using your money the right way.

Another drawback that Debt Consolidation has is when you consolidate unsecured debt under the terms of a consolidation loan it becomes secured. This is mostly done by using a home as the collateral for the consolidation loan. That means if you run into problems paying the Debt Consolidation loan the creditors can now take your house as a remedy for repayment of your debts.

In my opinion it is always best to figure our exactly where you stand financially and then put together a plan to solve your financial problems.

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