Are you drowning in student loan debt? Credit card debt? Mortgages and auto loan debt? All of the above? It doesn’t matter which kinds of debt you’re struggling with. In all of these cases, consolidated debt relief can be the answer.
Consolidated debt relief is a superior option to most other forms of debt relief. You can always try to declare bankruptcy or go through a high-risk debt settlement plan. But as long as your credit score is fair or better, it’ll be worth it to look into debt consolidation first.
Let’s start by looking at your options.
Consolidated Debt Relief Options
Debt Consolidation Loans: Save Money
Debt consolidation relief refers to a specific kind of loan. They are loans that are meant to pay off multiple debts at a time with the goal of saving you interest. They are refinanced loans, typically with longer repayment terms. That means that your monthly payments will go down significantly.
If you’re a creditworthy borrower, a debt consolidation loan will come with lower interest rates than your current debts. If you get both a longer repayment term and a lower interest rate, that’s a double-win. Your monthly payments will be easier to make and your repayment process will be much easier.
Where To Get Consolidated Debt Relief Loans
You can get consolidated debt relief loans from many different lenders.
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Credit unions and banks offer the best rates you’ll find. It will take longer to get approved for a bank loan, however. Unfortunately, the COVID-19 pandemic has made wait times even longer.
Unfortunately, wait times for loan applications are longer across the board. But alternative lenders will still usually offer much faster service. But you can expect their rates to be higher and their terms shorter. That’s especially true if your credit score is lower and your recent income is unstable.
To compare lenders, you can also use lending marketplaces and peer-to-peer platforms. Platforms like that will host several partner lenders and offer a free comparison service. To use them, you just need to share some personal information. That information will be used to pre-qualify you for any available loans.
Debt Relief Experts
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Unsure of whether you should take a consolidation loan? You can consult a debt management company, often for free.
Even paid debt management companies will offer a free consultation most of the time. They will take some time to look over your finances and come up with the best course of action for you.
In some cases, debt management professionals will suggest a personal financial plan. In more dire situations, they might even offer bankruptcy assistance. But of course, they might offer consolidated debt relief as a middle-ground option.
When a debt management agency offers a debt management plan, they will consolidate your payments into one single monthly payment to them. You will have to pay them monthly, and then they’ll disperse your funds to your creditors.
While your debt management professionals are handling your repayments, they’ll also try to negotiate for:
- Interest rate reductions
- Repayment term extensions
- Full or partial debt forgiveness
These plans can come with several advantages over simple debt consolidation loans. But you must still make timely monthly payments. Missing even one payment will typically cause the plan to fall apart.
If you’re struggling financially and worried about spending, you can still reach out to a non-profit. Many debt management companies are non-profit, and the FTC suggests you reach out to them.
What To Watch Out For When Looking For Consolidated Debt Relief
Not all “debt management professionals” have your best interests in mind. In fact, there are debt settlement companies that masquerade as debt management companies as well.
To avoid wasting time and money, do a simple background check on the company you’re thinking about working with. Check neutral and trusted platforms like TrustPilot and the Better Business Bureau. They will provide you with neutral reviews and assessments.
Debt Settlement
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Debt settlement is another option you have, but you should avoid it. Debt settlement companies are usually for-profit, and it’s a risky option. The FTC even warns of the many scams that are present in that industry.
If you’re considering a debt settlement plan, consider that even bankruptcy is often preferable. But either way, if you go to a good debt management consultancy, they should send you in the right direction.
What Can Consolidated Debt Relief Handle?
You can consolidate any kind of debt if you qualify for a consolidation loan. But be aware that some debt consolidation providers are better than others.
In cases where you just want to replace a single loan with a better one, you wouldn’t use consolidated debt relief. Instead, you can resort to refinancing.
If you want to refinance your mortgage, we can suggest LendingTree. Mortgage refinancing is a specialty of theirs.
For credit card debt, there are many great loan products out there. You can get one large debt consolidation loan from one of our trusted affiliates and use it to pay off all your debts right away.
Conclusions
There are very few downsides to consolidated debt relief. Whether you go with a lender or a debt management company, you should get a longer repayment term. Just be aware that there is no guarantee that you’ll find better interest rates. Especially if you have bad credit when you apply for a loan.
