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September 25th, 2009:

What to Expect When Consolidating Your Unsecured Credit Card Debt

If you have a lot of credit card debt that is piling up, you may want to consider unsecured credit card debt consolidation. When you choose this option, you will be consolidating all of your debt into one bill instead of many bills.
But this type of debt consolidation is not just convenient — it can actually end up saving you money. When you decide upon debt consolidation, you are usually struggling to make the payments on all of your credit cards. You may even find that making the minimum payment is too difficult and that you continue to fall behind in debt.
What Does a Debt Consolidation Do?
A debt consolidation company will access your financial situation and contact all of your credit card companies. They will explain to them that you have placed your credit in their hands and negotiate a lower interest rate for you. They may even be able to negotiate away late fees. Most credit card companies will cut their minimum payment when they hear that you are with a debt consolidation company.
The debt consolidation company will then have you pay them a monthly fee that covers all of your debt. They, in turn, will make the payments to the credit card companies.
How Does Debt Consolidation Affect My Credit?
Debt consolidation will affect your credit adversely, but not as badly as a Chapter 7 bankruptcy. The credit cards that you consolidate will be cancelled. Many companies will advise that you keep one credit card out for emergencies. When the debt is consolidated, the credit card company will cancel your card so that you cannot charge any more money. That is the price you pay for getting the lower monthly payment and interest.
What Else Does a Debt Consolidation Company Do?
Most debt consolidation companies will also offer you credit counseling. Their goal is to get you debt free. Your monthly payment must be paid on time and is usually taken directly from a savings or checking account. They will not accept a personal check for payment. You may also pay them with a cashier’s check or postal money order.
Is Debt Consolidation Free?
There is usually a donation charge for debt consolidation, although some states are clamping down on this practice. This is usually advertised as a free service, but often, the company will include a “donation fee” in with the monthly payment. Many consumers do not mind this as their monthly payment is still lower than what they were paying before and they feel that they are making headway with their debt.
An unsecured credit card debt consolidation is similar to filing a Chapter 13 bankruptcy, but without the big hit to your credit rating, and you do not need an attorney. ( offers you free information on unsecured credit card debt consolidation and can point you in the right direction to get your debt management back on track.
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Digging Out of Debt: Baby Steps That Lead to a Big Payoff

If you’re one of the countless Americans who is buried in debt, you’re not alone. But don’t give up hope – you can dig your way out of debt and reclaim control over your finances – and your life.Being buried in debt not only has a negative effect on your bank account, it also leads to a constant feeling of stress and is detrimental to your overall well-being. It probably took you awhile to get to this point, and it will probably take you some time to get out of it – but it’s well worth it, both financially and emotionally. The ‘Snowball’ PlanIt’s not instant and it’s not glamorous, but working your way out of debt can be very gratifying. There are basically three steps.

This ‘snowball’ method takes time and dedication, but it doesn’t take long to start seeing results. If you stick with it, it will work. And the important thing is to not put it off a day longer – start now.Once you start seeing results, and even once you’ve reached your debt reduction goal, it’s important to not return to the old spending habits that got you into trouble in the first place. Basically, you’ll need to make a complete lifestyle change. Trust me, being free from the constant weight of unmanageable debt is a much better payoff than the instant gratification of a new television or exotic trip.

Heather L. Clark is a Web writer and researcher based in Omaha, NE. She keeps in touch with family and friends with funny printable cards, free New Years cards and free kids birthday cards.
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Debt Consolidation Loan: What is this Program?

A debt consolidation loan program combines traditional debt negotiation with a debt consolidation loan so the borrower can get a reduction on his debt via negotiation while at the same time getting lower rates and a single and lower monthly installment with a repayment schedule suit for his budget.

Debt Negotiation

When you fail to repay a loan, the minimum payments on your credit cards or even regular bills, you usually incur in penalty fees and extra interest rates that contribute to a continued growth of your debt. Creditors tend to increase the amount that is owed to them by these means because they have additional costs when you fail to repay but also because they know that eventually they may be forced to resign a portion of the money, thus by increasing your debt they make sure to get as much as possible.
However, since this is a common practice among lenders, borrowers can easily fall into a debt trap with all those penalty fees and abusive interest rates. Debt consolidation agencies provide expert negotiators that know exactly how to deal with creditors and can agree with them a solution to your debt problems. If you have to file for bankruptcy, then they won’t be able to recover but a small portion of their money, so they are more than willing to show flexibility when a negotiator gets in touch with them.

Agreements can reduce your debt by up to a 60%. The main reduction is obtained by eliminating the interests charged over the debt’s principal and the capitalization of interests. Sometimes you can even get a reduction on the principal itself. And though it is not a reduction, you can get an ease on your debt by rescheduling the loan payments into longer repayment plans.

Debt Consolidation Loans after Negotiation
Once a reduction on your debt is achieved you can get even better terms by applying for a debt consolidation loan. The money you get from the loan will be used to cancel outstanding debt so you’ll end up with a single and lower monthly payment. By doing so your debt won’t be a huge burden anymore and you will afford the installments without making sacrifices. There is however, a limitation that you should be aware of.

Secured and Unsecured Loans

Unsecured Consolidation Loans cannot be used to consolidate secured debt. If you have different kind of debt you must resort to either a unique secured consolidation loan to cancel all your debt or an unsecured consolidation loan to consolidate unsecured debt and a refinance loan in order to consolidate secured debt like mortgage loans and home equity loans.

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