Debt Consolidation Advice – How Consolidation of Card Bills Can Happen Through Debt Settlement

February 23, 2011 by  Filed under: Debt 

Those who are looking for debt consolidation advice need to know that debt consolidation can be of two types. The method solely dedicated to consolidation will actually reduce the burden of monthly payments. Here the consumer will have to continue paying the creditors but at reduced interest rates. The next form of consolidation actually refers to pooling all the debts in one single place with one creditor. This method is used within the method of settlement and is basically the first step that the consumers need to do.

Consolidation of credit card bills can happen through debt settlement in the following ways:

  • Balance transfer: In this method a consumer needs to select one credit card which has the lowest interest rate. The consumer will then ask the creditor of that credit card to pay off the bills of the other cards and transfer all the balances to its own and the current interest rates. The creditor will do the same and add up the balances to its own card and will adjust the time of repayment accordingly so that the creditor never loses money in the consolidation process. This is the popular method of credit card bills consolidation within the scope of settlement.
  • Consolidation loan: The consumer can alternately ask for or apply for a consolidation loan with another creditor and use that money to repay the existing cards. This way, all the loans or credit card bills will be consolidated in one single place. The consumer will then have to settle this consolidation loan. This method is not that popular because of the fact that consolidation loans have high interest rates. The money from the consolidation loans must be used only for repaying the credit card bills and not for luxury. This is the less used method of credit card bills consolidation through debt settlement.

With the new FTC laws recently passed, debt settlement is a legitimate alternative to filing bankruptcy. Creditors are ready to negotiate and now you won’t have to pay a fee unless your debts actually settle. Check out the following link to locate legitimate debt relief companies in your state for free help.

Debt Reduction Help.

Or Call: 800-951-9280

Article Source:

http://EzineArticles.com/?expert=Frank_Bernard

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