allows you to merge all your debts into a single debt account so that your debts are conveniently paid off. This is because your debts become manageable. There are many debt help clinics that help you in consolidating your debts. These debt consolidation clinics can be either for-profit or non-profit making firms.
When is debt consolidation not a good option for you?
When you enroll for a debt consolidation program, in addition to enjoying reduced interest rate and lower monthly payments, you also get a repayment plan that you are expected to follow religiously. For some unknown reason (a medical emergency, a sudden death in the family, unemployment etc), if you are unable to make the monthly payments and fall behind on your payments again, it can make matters worse. So, if you enroll for a debt consolidation, make sure you have enough determination and perseverance to chase the program till completion. You can keep aside some cash to cushion such unforeseen events.
You can either opt for a debt consolidation program or avail a debt consolidation loan by either using collateral or without one.
Lately, the debt settlement and the debt consolidation firms have come under scrutiny due to the increasing number of complaints being lodged against these firms. The most common complaint against the debt settlement and the debt consolidation firms is that these companies charge very high upfront fees but fail to deliver the services promised by them. And even before they are able to take the debt consolidation program successfully to completion, they take the entire fees.
However, not all debt consolidation companies take debtors for a ride. There are many reliable debt consolidation firms too. You need to check it out with the BBB for assessing the credibility of the company.