http://www.debt-consolidation-explained.com/credit-consolidation/credit-consolidation-loan/ Credit consolidation loan: Is a credit consolidation loan something you can live with or without? en-us Sat, 26 Jul 2008 15:00:00 EDT Sat, 26 Jul 2008 15:00:00 EDT Weblog Editor 2.0 Did you know that when you're overwhelmed with debt you have options other than bankruptcy? Many people don't know that. Obviously you must have heard something about it or you might not have found our site! We're here to help you learn about what a credit consolidation loan can do for you. Do I Need A Credit Consolidation Loan? You're concerned enough to ask, which means that you recognize there may be a problem. Here are some warning signs that you may be headed for debt doom: You spend more than you earn on a regular basis You only pay the minimum amount due each month on your credit cards You're maxed out on your cards (or close to it) You're afraid to talk to your spouse about your money situation You've been turned down for a loan or credit card recently You panic when an emergency such as a car repair arises Credit card companies are calling you about overdue bills You're considering bankruptcy If you're considering bankruptcy, stop! Before you pay a lawyer a lot of money that you don't have to file for bankruptcy, consider a credit consolidation loan instead. Besides, Congress recently passed a bill requiring anyone who's filing for bankruptcy to get help through a debt management program first anyway. Credit Consolidation Loans Defined Let's start by defining a credit card consolidation loan. When you've found a credit consolidation company you trust, you will speak to a credit counselor about your financial situation. The credit counselor will determine if you are eligible for the program, and if you are, they will grant you a loan to pay off all your unsecured debts. Then you make one monthly payment to the debt consolidation company instead of several monthly payments to your creditors, and you'll have the loan paid off in about five years. Concerned about getting a loan of any kind because of your bad credit? Don't be. You can get a bad credit consolidation loan. No Collateral? That's okay! A basic debt consolidation program is different because it doesn't involve a loan, and you can be out of debt in the same amount of time as you could with a credit consolidation loan. There are even bad credit consolidation programs. What happens for either of these programs is a debt consolidation counselor will speak to your creditors and explain that you are getting a to pay off your credit cards. They are usually able to get the creditors to agree to lowering your balances, interest rates and monthly payments, and sometimes the creditors will agree to eliminating past late fees and over-the-limit fees. The credit counselor will look at your income and your monthly payments outside of your unsecured debt (such as rent or mortgage payments, car payments, insurance payments, etc.) and determine how much you can afford to pay each month. Your payment will be based on what you can afford and the minimum payment your creditors are willing to accept each month. You then make one monthly payment to the credit consolidation loan company and they will divide that payment among your creditors. The credit consolidation loan company usually includes their fee in your monthly payment as well. The amount of the fee varies with each company, but it's usually affordable, particularly if you choose a non-profit company. Feel free to browse our site and the related links to get more information about this important decision in your life. Sat, 26 Jul 2008 15:00:00 EDT