Many credit counseling companies have come up with debt consolidation programs to help people like you and me who are in over our heads with debt – find a way out. When you consolidate your debts, you simplify your life and take pressure off your back. A good program will work with your creditors to bring down your interest rates. They will then work with you to establish a monthly payment that you can afford. They payment will be sent to the consolidation company that will in turn pay back your debts. This helps your credit situation by showing that you are taking actions to improve it.

Debt consolidation programs are available online, and you can browse the Internet to find one that you think will work for you. Just keep in mind that any program you find is not meant to erase your debt. The counselors will work with your creditors and you to straighten you’re your credit and work out your debt but making a monthly payment that you can handle. That is why it is very important to opt for the solution that you think is to your advantage.

Look for those companies that have a solid reputation. Visit forums and solicit ideas from other people who have already successfully consolidated their debts through an online debt consolidation agency. Debt consolidation will keep your financial life on track and you stick with the program. If you make the commitment, you’ll be out of debt in no time at all.

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Debt Consolidation FAQ:

Question: What are the consequences of getting a debt consolidation loan? Does it reflect badly in my credit report?

Answer: Instead of shifting your debt around, bite the bullet and pay it off.

Make yourself a strict budget. Eliminate all the extras — cell phone, eating out, new clothes, premium cable and internet, etc. Take every penny you can squeeze out of that budget and throw it at the highest interest rate debt, while making minimum payments on the rest. When the highest interest rate debt is paid off, move to the next till they are all paid in full.

You should be able to pay off all you debt within 2 or 3 years if you really work at it. You’ll end up with a good payment history and improved your money management skills.

Question: Good Australian company to get a debt consolidation loan with?

Answer: Unfortunately, if you have a default on your credit file, it is highly unlikely any decent companies or banks will give you a loan for debt. Your best bet is to sit down and work out a budget.

Question: How do i find a reputable Debt consolidation company?

Answer: Try Credit unions if your a member and Consumer Credit Counseling. Check any company out with the Better Business Bureau first to make sure there compliant.

Question: Can I add the taxes that I owe into a debt consolidation?

Answer: Are you going to get a new loan and consolidate all your debt? Or are you going to a debt consolidation scam that says they’ll reduce what you owe? If this is what you are doing you won’t be able to because IRS won’t negotiate.

Question: Does the Army offer any type of debt consolidation loan for new recruits?
I’m joining the army, and I’ve got about 4k in debt (mostly old hospital bills)… I was wondering if the army, or even the armed forces bank, offers any type of debt consolidation loan so that I can get this paid off easier? My credit isn’t the best… but on the other hand, I’ll be in the army, so it’s not like I won’t have a job to pay the loan back with.

Answer: Not really. If you are just 4k in debt, by the time you are done with basic, ait, move and go to your first duty station, you will be debt free and have some money put into savings.

You can also talk to your creditors and tell them that you ARE entering the military and if you could work out a payment plan why you are in training, since you really won’t have access to a computer. More likley than not they will work with you as long as you can provide them with proof of enlistment.

When you do go to basic, just remember to take a copy of all your bills, with address and envelops, a check book and know that you won’t get paid till about a month in a half into your basic training. Trust me…BCT is a chance to clean your record…period. Just don’t blow your money when you go to ait and want to have fun.

Question: Please explain to me what a debt consolidation is. Is is bad for your credit rating? Why doesn’t everyone apply for it? Does it take a certain about of debt to qualify. Please give me the low down. I have excellent credit but just a large amount of debt. I may consider this as an option.

Answer: If you have numerous debts all at different rates, some rather high a debt consolidation loan can be a great idea. You may be able to get a lower rate and have only one payment. There are a couple of problems however. In light of the recent sub-prime mess the people who need them most are least likely to qualify for a consolidation loan at a decent rate. Another problem is lack of discipline. Many people who qualify for such a loan once they see their credit cards are paid off go back into their old bad habits and crank up the cards again and now have both the credit card debt and the new consolidation loan.

Question: Will debt consolidation hurt my credit?

Answer: There is a chance that using debt consolidation services might affect your credit. Most debt consolidation services are there to help you get out of debt, not to sustain your credit report or credit score, so you should prioritize what you really want in seeking debt consolidation help.

Question: Is debt consolidation the best answer for me?
My husband and I were recently told by a lending company that if we put all of our debts on payment plans, and got a credit card to start out our credit, they would give a loan. Would it be easily to consolidate all of our debts, which don’t include any credit card bills whatsoever, or simply call each place and put them on separate payment plans?

Answer: Normally, all debt except for credit cards, is already on a payment plan. The one exception being a home equity line of credit, where you might just be paying interest for the first 5 years. But, you write that you have no credit card debt.

I would use a different lender. Any lender that advises you open a credit card and consolidate the rest of it doesn’t sound like they have your best interests at heart.

The only reason you might consider consolidating the debt is if you can get a lower interest rate doing so. This would impact your ratio’s for getting a loan. Otherwise, manage your own debt or see a financial adviser with nothing to gain by the choices you make.

Free debt consolidation programs exist to help individuals, to come out of various financial crises. These programs prove to be effective and are found to be helpful in several ways. They are run by nonprofit organizations and hence are called free programs. However it would be worthwhile to check the hidden costs before committing.

These programs were basically drafted for people, who are unable to pay off the monthly installments on various debts. An individual having trouble meeting the minimum monthly payments on their bills, should turn to these non-profit debt consolidation companies for help.

It is seen that several companies with counseling offices provide such programs. This enables customers to speak to a certified consolidation specialist, a professional who will design a payment plan, specific to individual needs.

The counselors are trained to take a proactive approach, to both the clients’ and the creditors’ needs, and try to find a path that will provide solace to both. The certified financial counselors working under these programs have special expertise in debt policies and rules. Hence they work as a link between both the consumer and the creditor. They aim at working for an outcome that would be a debt with lower interest rates.

Debt consolidation programs also help to reduce monthly payments and late payment charges. They claim that the counselors are working on the client?s behalf and not for the creditor.

The programs also offer flexible options to make payments for their consolidated debt loans. The customer is benefited, as they do not have to worry about individual monthly installments and only a consolidated single payment has to be made.

There are various sites online that also offer several programs for individuals, unable to pull on under the load of too many debts. It is however advisable to check the genuineness of the program before enrolling.

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Debt Consolidation FAQ:

Question: How To Get Out Of Debt Fast With US Debt Consolidation Services?

Answer: The most important step you must take to reduce credit card debt is to use your credit card only when required. Larger the debt is, the longer it will take to pay it off.

Look for credit cards with the lowest interest rate, and consolidate your debt. Call your credit card companies and see if they can offer you any special rates if you transfer your balances to them.

A popular alternative to debt consolidation is known as debt settlement or debt negotiation, which works by actually reducing what you owe to creditors. Debt reduction works by consolidating all non-secured debts, such as credit cards and medical and tuition bills into one monthly payment, usually substantially lower than the combined payments a debtor is currently making. The way that debt reduction works, is that the consumer pays the agreed upon monthly amount to the consolidation company and gives them authorization to make payments to the individual creditors on their behalf. The company negotiates lower interest rates, or sometimes, zero interest.

Creditors are willing to make such arrangements, because they are more likely to receive payments on time from a debt relief organization than an over-burdened consumer.

Question: What are the consequences of going through a debt consolidation company?

Answer: The consequences depend on your current situation (income, earnings) and other financial responsibilities. The best way to get an answer to your specific situation is to get a consultation conference with a debt consolidation company. You can find out where to get a free consultation and debt quote to lower you debt by as much as 50% in some places. Remember to shop around and do your research before signing anything.

Question: What is the best company to use for credit/debt consolidation?

Answer: There are many companies that provide the various services of debt consolidation. But what types of debt consolidation you are looking for? As the companies provide many services starting from credit card debt consolidation, student loan consolidation, military debt consolidation and many more.

Question: What is the best non profit debt consolidation program in michigan?

Answer: Find a NFCC member near you. These are credit counseling companies not debt consolidation. Most debt consolidation programs are not non-profit. Many are scams that take your money and trash your credit.

Question: Where can my husband get debt consolidation to pay off credit card debts without collateral?

Answer: You can make higher than minimum payments for several months, and then contact your credit card companies to request a lower rate. That can help you pay them off even faster, and it may lower your payment slightly if you need a break.

You can use the equity in your home to get a home equity loan. This can give you a much lower rate that may also decrease your income tax burden (ask your tax adviser). It does mean that you are securing what was once an unsecured debt with your greatest asset. If you are not a homeowner with equity, then this is not an option.

Question: What is the best way to get out of credit card debt. Do debt consolidation companies really work?

Answer: Most debt consolidation companies will actually hurt your credit. Your best bet is to focus on one card at a time. Pay as much as you can on that one card while paying just the minimum on the others – as you pay one off add that payment to your next lowest until they’re paid off.

Question: Debt consolidation who is a good firm to get a loan from?
If I want to consolidate all my debt, which is $8000, who would be the best banking firm? My credit is not that great, I have a bad debt to income ratio but no delinquent accounts.

Answer: If you have no collateral, and high debt to income it can be difficult if not impossible to get a loan equal to your debt.

Consolidation can also be a process in which you, or a company you hire, negotiate with your creditors to lower your existing interest rates. Like I said, you can do it yourself.

Question: I want to know if Budget Right Debt consolidation is a reliable company?

Answer: There are very few ‘legitimate’ debt consolidation companies. Most will charge large fees for the privilege of further ruining your credit. Most of the claims they make are exaggerated. One good rule to follow is this – if it sounds too good to be true, it probably is. That, and if you heard about them via an unsolicited email, steer clear of them

If you do some research, you should be able to do everything the Consolidation companies do on your own.

One of the misconceptions about a debt assistance organization is that they will pay a client’s debt off and leave the client free of financial obligations when the process is over. This is a simple exaggeration of what consolidation actually is, and it is a common misunderstanding. Experts in this field take the products and services available to them and help someone combine their high interest credit card debt under one low interest rate loan payment. The client is still left with that loan payment that they must make every month, but with the interest payments cut drastically and the multiple monthly service charges brought down to one service charge, the savings every month can be hundreds of dollars.

As much as they would like to, a consolidation group is not able to help every one that comes to them for assistance. There is some extreme situation where a debt consolidation loan is not going to help a client, and the other services that are offered by a counselor are also not going to have any real effect for the client. If you allow your monthly credit card balance to grow to a point where not even consolidating the debt is going to lower the payments enough where you can afford it, then there is little that a consolidation expert can do for you.

Debt consolidation is a business that is based on expectations and trust. The customers have their expectations and they trust the professionals to help them reach their goals. But even debt assistance associations have their limits, and when those limits are reached there is little room to help. However, you have nothing to lose by trying a free first time consultation that usually those companies offer.

By the way, by researching and comparing the best debt consolidation companies in the market, you will be able to determine the one that meet your specific financial situation, plus the cheaper interest rates offered. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

Hector Milla runs the Best Debt Consolidation Company website – where you can see his best rated debt consolidation company recommendation. Visit for further information and read our full review of the best debt consolidation service, plus articles and video training about how to get the most of your debt consolidation process.

Debt Consolidation FAQ:

Question: What’s the best debt consolidation company or group to go with?
I have one credit card with a $9,226 balance and another one around the same price. I was wondering what company is best for me to consolidate both these bills so that I can pay a low monthly fee and eliminate them.

Answer: You don’t want to go with a consolidation company. What you need is to talk to your creditors and arrange a lower payment plan. Ask them if they can provide you a minimal credit card (like $500) then put away the large balance credit cards away and don’t use them in the meantime. Keep to your payments by having pre-arranged payments automatically debited from your account instead of mailing the payments monthly. If you have opportunities where you can pay additional amounts to the credit cards, do that. Now, for the minimal credit card that they provide for you, keep that in rotation…only using it when absolutely necessary and something that you can pay off come billing time. Meaning when that bill comes in, you have to pay it in full. A starter American Express is a sample of a credit card like that. You have no choice but to pay the amount due on the bill.

Question: Is there really such a think as a nonprofit debt consolidation company? Are any even reasonably fair?
I’ve called several companies who consider themselves not-for-profit but when I talk to their reps, they start throwing out different fees which definitely are above common administrative costs. A couple of other companies I’ve called are somewhat reasonable with their fees, but the interest rates are bad. It seems as though they’re supporting themselves through whichever financial institution ends out loaning the money. Maybe I’m wrong and just haven’t found the right company??

Answer: There are ways of approaching this problem but there are also a lot of scams. First, you need to find out which type of debt consolidation would suit your circumstances, and second, you need to find a company which will deal with you fairly. People who lend you money will rarely do it for free, so you must be prepared for some costs.

My advice is to first speak to your bank. This will be free. Explain your circumstances and ask their advice. You will not be the first person to ask these questions and they should be able to recommend a solution. If they don’t want to lend you money they could put you in touch with a suitable lender and advise you how to go about obtaining a loan.

Question: Can combining credit cards (NOT Debt Consolidation) hurt your credit score?
I have several credit cards, many from the same institution. I’d like to combine all the ones from the same institution into one.

All the cards are paid off monthly – I am not carrying any debt. Will this hurt my score?

Answer: Closing them will pull your score down a few points. Less Available unused credit.

Question: What is a good debt consolidation company that will negotiate your debts down and then give you a loan?

Answer: I, too, have felt the “pinch” of debt exceeding income. I searched the Internet for a reputable Debt Consolidation solution. After weighing the options of several, I settled on Credit Exchange. Their representatives had a genuine empathy with my situation, and came up with an excellent plan for me. This is not a loan. They negotiate with creditors to reduce the amount of debt owed. My monthly payments were reduced by 60+%. You will also be represented by a law firm that specializes in these matters. I have been in this program for one year now, and it has made a dramatic change in my budget woes.

Question: Is Debt Consolidation a good thing for my credit score or will it damage it ?
Being a recent grad and not in my preferred area of employment is rough, as it is for many recent grads. My dilemma is my finances. My poor financial decisions (i.e. CREDIT CARD DEBT) in college has caught up with me and it is racking my brain. I have considered debt consolidation because of the seemingly positive benefits of reducing my payments and paying just one bill…BUT is it too good to be true? It seems that there are quite a few debt consolidation businesses popping up and that is cause enough to sit up and really ask what’s really going on.

Answer: Don’t go there. Call your credit card company and negotiate the interest rate. They will usually work with you and drop it way down as low as 6 percent if you are tough about it. Then pay off as soon as possible. Other wise you got a snow ball that will roll up bigger and bigger. Just use the rule of 72, what you do is divide the interest rate by 72. If it is 12 percent then 72/12 equals 6 and your debt doubles in six years. That means you got to get the interest rate down and pay it off with a dead line.

Question: What is the best debt consolidation company?
I know there is a lot of companies out there so i just want to find the right company. Can anybody recommend any specific company?

Answer: Actually quite the contrary, Debt consolidation companies, or at least the really good ones, know exactly what areas to focus on in order to help repair your credit, help you lower your credit, and teach you better financial moves so you can stay out of debt.

I would contact www.debt-meltdown.com for the best debt solutions. My friend recommended them to me and they helped lower my monthly payments and my total debt. This economy favors those in debt as creditors are willing to take lower amounts if they can be paid in a relatively shorter time. Contact them and let them know your situation, they will assist you however possible.

Question: How do I choose a reliable debt consolidation or debt counseling organization?
You hear of so many scams out there. How do you know a reputable organization when you see therm? What are are the best options? A company with a Christian foundation is preferred.

Answer: Beware. Even if one says they are “Christian” doesn’t mean that they won’t rip you off. In fact many scammers use that to get people.

Question: What are the cons of using a debt consolidation/credit counseling service?
Do these services negatively effect your credit? If so, for how long? Are there any major pros to these services?

Answer: Many agencies (mortgage companies) view debt consolidation no differently than a CHP 13 Bankruptcy.

I have heard some horror stories from clients who try using debt consolidation companies and the companies who they are working with make a mistake or miss a payment on behalf of the borrower. Ultimately your credit is *your* responsibility.

Paying off smaller debts to take on one larger debt can also negatively affect you. If you open up a new account that can drop your months reporting average. Small balances affect your credit less negatively than one large balance.

Negative items on your credit report typically only affect you for 24 months. Every 6 months your score is affected 25% less until 24 months (100%) is reached.

One of the options you might want to consider if you are deeply in the red is a debt consolidation program. These programs are designed to help you reorganize the money you owe so that you can more easily pay back the amounts. However, if you’re serious about getting involved with such a program, follow these tips to choose a good one.

Tip #1: Get Recommendations

As with any type of important decision, you really should consult people with more expertise to help you make a wise choice. That means talk to friends, family members, or colleagues who have worked with debt consolidation programs themselves. They not only can give you some recommendations about which services to use, but they can also help you understand the benefits and drawbacks of this approach.

If you don’t feel comfortable discussing your financial difficulties with family and friends, contact your local bank or credit union. They may be able to recommend someone. Even bankruptcy attorneys and financial advisors might be able to steer you in the right direction. Just remember that you need to be willing to ask for advice before making your decision.

Tip #2: Do Research

While the recommendation is an important of the decision making, you don’t want to stop there. Before you select a debt consolidation program, you should also do some research on the different programs available. You’ll find a number of types, including non-profit ones, which are available.

By researching these different organizations via the Internet, you’re also likely to run into others’ opinions of the organizations. Remember to take all of what you read with a grain of salt, meaning be careful not to believe the first thing you read. Some companies pay people to write and post glowing comments about them on the Internet. Some people blame the debt consolidation program when they can’t follow the rules. Read what you can find but combine everything and try to get an overall picture of the company.

Tip #3: Compare

Although you might think each debt consolidation program is identical, that’s not the case. Most are very different in terms of how they can help you and what they charge. That means it would be a very wise idea to narrow down your search to about three programs, then get quotes from each of them. You might even want to schedule an in-person meeting with the facility so you can go over your situation and find out how helpful they can be. Go into the meeting armed with questions so you’ll know what you want to do about each company so comparing them will be much easier.

You might be surprised at the different results you get from the three different programs. Just remember the lowest fees aren’t always going to be charged by the best debt consolidation program. You want to weigh all of the factors before you decide to make the big decision.

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Debt Consolidation FAQ:

Question: How does debt consolidation work, and is it worth it?
I’m trying to clean up all my past debt before it gets out of control, and I want to know if this is a good idea

Answer: Most debt relief/consolidation companies take their fees up front and trash your credit. There are a lot of scam companies making promises they can’t keep.

If you need help dealing with your debt, check this site: http://www.nfcc.org/. This is Consumer Credit Counseling Services (CCCS), a legit, non-profit company offering free credit counseling. They also have debt management program available, if you qualify, for no fee. They can look at your financial situation and advise you how to proceed.

Question: Is it futile to search for lenders that do “true” Debt Consolidation LOANS??
I have been searching for almost two months to no avail. Are there no legitimate lenders that perform Debt Consolidation Loans? I am not looking for a Home Equity Loan, I mean a loan to “replace” my high interest loans and credit cards with one affordable monthly payment?

Answer: If you’ve dealt with the spending problem that got you in the mess and been able to reduce your expense to the point at which you are already reducing your debt then you should start looking at debt consolidation.

You really should ask your bank and see what they can provide, a personal loan or home equity loan (if you’ve got a home) might end up being a better solution than the high interest loans and credit cards that you’ve got right now.

Though it’s important that you have your spending under control, if you don’t then all you’ll end up doing if you role your loans into one new loan is opening up more credit for you to then abuse (you can’t borrow your way out of debt).

Question: Any recommendation for a credit card debt consolidation firm?
A firm that you’ve been satisfied with and helped you to eliminate your debt with a competitive rate

Answer: Well, the co. I used was Nova Debt which is for NJ. But I found them through my actual credit card co. Call your credit card Comp. and let them know you are having trouble paying the minimum payment. Make it sound like it is almost impossible, then ask if there are any solutions at all. If the credit Card co. thinks you cannot afford it, they should recommend a consolidation place.

Question: Should I look into Debt consolidation with my credit card debt being $6000 or should I work something out?

Answer: Work out a monthly budget which lists all your income and outgoings, so that you know where the money is going. You can then work out how to pay off the credit card debt. In the meantime, stop using the credit card.

Question: What is a good credit card debt consolidation company?
Anyone have any experience with dealing with these types of companies? recommendations?

Answer: Make sure they are a reputable company and have a good track record. I was also in deep debts last year and I took help from freedom debt relief to consolidate my credit card debts, now I am almost debt free. I am happy with their service and recommend you go for them.

Question: Best source for credit card debt consolidation loans?
Whats the best place for this type of loan? Banks?

Answer: Start by calling the credit companies and working out a lower rate (if you’re current). Next, STOP SPENDING!!! Then – pay the minimum on all your cards but the one with the highest rate, use the money you saved from your decreased spending to pay that one off more quickly. Then use the money you were sending to the first company and pay off the next higher interest rate. Keep going until all your cards are paid. After that, if you can’t buy it with money from savings – YOU DON’T NEED IT!!

Question: Ok, once and for all…credit card debt. Is debt consolidation or credit counseling the way to go?
I have about $15,000 worth of credit card debt(on more than 1 card). I don’t use the cards anymore. I’m paying what I can but feel like I’m just going around in circles. I haven’t defaulted on any of them and I’m not behind in payments. What’s the best thing to do?

Answer: The best thing to do is to pay off your cards with the highest interest first.
Your other option (depending on your credit) is to transfer the balance to a credit card that has a low introductory rate.
If your credit is good enough, you may be able to qualify for 0% for 1 yr.
In the meantime, if possible, cut up your credit cards so you don’t use them.
Do not close them once they are paid off. Having that open line of credit looks good on your credit report.

Question: If in a debt consolidation program, is your credit score affected?
And if it is, after the program, can you rebuild it? After a few years would trying to get a loan for a new home still be affected by having gone through the consolidation program?

Answer: If you responsibly pay down your debt and do not declare bankruptcy, you will rebuild your credit and be fine.. My daughter did it and now has a high 700s score and owns her own home.