Is Debt Consolidation for Me?

Much has been made of debt consolidation in recent years.  It's an incredibly appealing idea; taking all your debt and condensing it down to the lowest common denominator and then repayment would be a cinch. Many people have this perception of debt consolidation loans, as well.  The cruel reality is that is not the way it works.  Debt consolidation can be a good thing, but don't get taken in by shifty loan companies eager to take your hard earned cash in exchange for some pretty words and an incorrect idea.

Watch out for promises that sound too good to be true-they usually are!  If a debt consolidation company makes it should easy to get a consolidation loan, they're probably not being straight with you.  People in need of debt consolidation don't usually have the best credit, which means it's NOT that easy to get a loan.  If you sign up with one of the companies that advertises the ease of making your debt disappear you'll end up paying far more than if you had just paid off your creditors in the first place.  These folks don't blink at charging you over 20% interest.

Another thing to beware of is a consolidation company that acts like it wants to take care of you.  They want your business, badly.  If you sign up with them, they'll get a percentage of your monthly payment; usually over 10% of your monthly payment will go to line the pockets of your consolidation company.  Remember that everything a debt consolidation company can do, you can do for yourself.  It might take a little longer, but you'll keep more of your money in the end.

There are loan consolidation companies out there that don't work for the dark side.  They're rare and, thus, difficult to find, but if you search diligently, you'll be rewarded.  A good credit consolidation company will not make outlandish promises of making your debt go away in a few months.  They won't promise to shrink your Everest-sized mountain of debt down to a molehill.  A good debt consolidation company will tell you that recovering from debt is a long, hard road.  Then they will sit down and develop a debt management plan that fits your budget; they'll usually sit down and go over a year's worth of expenditures with you.  From that point, they will evaluate your needs and take the necessary steps.

Chuck Hillary, from Boston, Massachusetts, found himself in just such a mire.  Bogged down by credit card debt, he couldn't see the light at the end of the tunnel.  After reading a few emails from shady lenders, he decided to play it safe and found a great debt consolidation company right in his hometown.

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