dating websites for college - Consolidating credit card debt 20

Consolidating debt is defined as taking out a large enough low interest loan in order to pay off all of your high interest debt – like credit card debt.You then have just one lower, more affordable, and convenient monthly payment.What used to be a loan option you would pursue from a brick and mortar bank has been replaced, in large part, by peer to peer, online lenders, and personal loan companies.

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Many years ago, a Google search for the term “debt consolidation” would have shown the top 3 results (which are typically paid ads) to be offers for consolidation loans.

But for some time now, that same search in Google, or any other search engine offering paid positions for the top listings, will most likely show credit counseling companies, a debt settlement company, or a call center selling bankruptcy alternatives. Debt relief companies started to muddy the definition of debt consolidation when they recognized the benefit to marketing themselves that way led to more people contacting them.

The term “debt consolidation” is searched for much more often than the term “debt settlement” or “debt management”. Mostly, as a caution for how debt settlement companies have sold their service as one easy lower monthly payment.

Representing debt settlement as making one lower monthly payment sounds like consolidating credit card debt, but nothing could be further from the truth.

The opportunity to consolidate high interest credit card debts into a loan with a more affordable monthly payment became increasingly difficult as a result of the recession.

Prior to 2008, it was not a problem for a home owner to get cash out refinancing or take out a home equity line of credit (HELOC), to pay off higher interest credit card debts.

It had become more difficult to consolidate high interest debt using real estate.

Home values had declined for many, but are bouncing back in several areas.

Credit card lenders just came through the highest default and charge off levels they have ever seen.

As a consequence, it can be more difficult to qualify for debt consolidation loans from major banks, and even your local credit union.

Larger consolidation loan amounts are just not available like they once were.

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