Tuesday, August 19, 2008

Debt Consolidation

Debt Consolidation is the action of combining several loans or liabilities into one loan. Put another way, debt consolidation is the process of taking out a new loan to pay off a number of other debts. Most people who consolidate their debt are usually doing it to attain a lower interest rate, or the simplicity of a single loan. Also known as a "consolidation loan".

This is common among companies or people with credit problems (maxed-out credit cards, car loans, student loans, fixed credit score, etc.), who combine all their debts into one loan to create greater ease in repayment. In the case of credit card debt, this can often be advantageous since credit cards generally carry a high interest rate.

2 comments:

debt consolidation companies said...

You can always negotiate your terms with debt consolidation companies but its best to consider all your options before taking the plunge. Thanks for the info!

LittleStar said...

Everyone's situation is unique but, if you do as much research as you can and use debt consolidation articles and other tools you find as a general guide, you can customize it to fit your situation.