Is A Debt Consolidation Loan Good For Consumer Credit Problems?

Consumer credit problems are literally consuming the United States and for any number of reasons. First, it was easy to get credit cards, then it was high interest rates, then it was overspending because credit loans were simple to get, and then the economy took a hard dive and has yet to recover completely. Many Americans lost their jobs or took salary cutbacks in order to stay employed, homes were foreclosed upon and consumer debt reached the $2 trillion mark. In reactionary states of financial trouble, many turned to the traditional debt consolidation method without considering the consequences.

Getting a debt consolidation loan is easy if one has collateral, and if the debts are very high, it means a second mortgage on a home if no other hard asset is available. Suddenly, to pay off some credit card bills, one is endangering the very roof over his head. It doesn’t sound like a very intelligent move, does it? It isn’t. The only parties it works out well for are the creditors, who get paid off, and the banks, who get paid back – or else they take the property. For the consumer, it is debt advice is is akin to walking a 債務重組收費 tight rope with no safety net. This is not the economic time to gamble on debt relief consolidation. It is the time to reduce the average credit card debt, eliminate as much risk as possible and get back on track.

Debt settlement and debt management are two far better and less risky solutions. They are not perfect, but managing one’s way out of a debt problem usually isn’t without a windfall, and these two programs come closest to offering just that. Because both work with debt restructuring, it means that creditors start to cut the amount of balances owed to them in order to recoup at least a portion of what is due them. That boils down to the consumer paying less than what they owe. It eliminates debt, purely and simply. Debt consolidation loans do not do this. They rearrange the debt and add to it, and for a much longer period of time than most consumers want to think about. If there’s a choice between remaining in debt for another thirty years or looking forward to being debt free in three to five years, the choice seems obvious, and it is no surprise that hundreds of thousands of American consumers are now using these methods as their number one credit debt help. It is not necessary for debt consolidation loan and consumer credit to depend on one another.

Neither debt settlement or debt management are magic tricks. They don’t make the problem go away, but they do work the numbers down to a more livable and affordable amount to deal with. Even the federal government understands how viable these methods are, and recently passed consumer protection laws to cover them. And, consumers can be assured that reputable debt relief organizations subscribe to all the regulations and qualifications that the National Foundation for Credit Counseling puts on its members and the industry as a whole

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