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best consumer debt consolidation
At the outset, it should be noted that all and any consumer debt consolidation services, techniques or approaches deal with the affects of debt (cost of and time to clear etc) but not the cause of debt (the reason behind the problem). Invariably, success in eliminating debt and staying debt free requires private efforts in regard to spending patterns and personal budget management.
Thus, a consumer debt consolidation solution may be addressed through a service, but a consumer debt consolidation need or the underlying debt problem itself must be addressed by the individual.
Consolidation success requires that both cause and effect are addressed simultaneously.
Understanding What Consolidation Means
! Consolidation of consumer debts as a topic is typically discussed using a broad definition that includes both consolidation of debt and repayments on debt approaches. This wide definition is reflected by the three core types of outside service help available:
Consolidation of Debt - Shifting debt or debts to a new creditor (lender) with the original debt paid off immediately as part of the consolidation process.
Consolidation of Repayments Against Debt - rationalizing payments for the purpose of repaying debt. Original debt and creditors remain until satisfied.
The topic of consumer debt consolidation can seem confusing, however much of this confusion surrounding consumer debt consolidation is caused by industry jargon and the use of terms interchangeably. For anyone contemplating outside service help with consolidation, it is critical to have a clear understanding about service types.
Each of the above types of service are discussed in detail on this site. You'll find information about consumer debt consolidation under each approach, including how it works, what to consider, what to look for, what to watch out for, best practice and resources to help.
! Prevent confusion. See our summary of Debt and Consolidation which identifies how industry terms are used.
The above three types of service may be used to achieve a consolidation goal, according to the broad definition of consolidation in use. Outside service help is not always required and any option may be appropriate or inappropriate depending on individual circumstance. The most common demand for consumer debt consolidation help comes from people with credit card debts.
Consumer debt consolidation of card debts may be achieved using any of the three approaches above. As unsecured debt, card balances may be enrolled into repayment programs in addition to being paid off by means of a loan. The do-it-yourself option exists with all three approaches. For example, in addition to a Debt Consolidation Loan, there are other types of loans that may be used to achieve the same result. Those benefits negotiated for you by a service provider under a Program or Settlement approach you might achieve yourself by dealing with creditors directly.
There are also non-consolidation options to evaluate before proceeding with consumer debt consolidation. Recognizing all your alternatives is an essential part of a consumer debt consolidation process. Can you access monies to pay off the debt without taking on new borrowing? Is bankruptcy a serious option in your situation?
This site helps you work towards an action plan. If you have card debts only, where the total balance owed is not excessive, then a personal repayment strategy may be a better idea than moving forward with any consumer debt consolidation approach. There are different techniques that may be followed when prioritizing and making your card repayments. The Snowball and Avalanche technique are two popular if different approaches to making repayments.
Best Consumer Debt Consolidation
Find resources to help. We explore each of the core approaches to consolidation of consumer debt in detail. Your best option or approach depends on the type and amount of debt together with your general financial situation among other factors. Researching your options is essential. In the case of outside service help, you should also be prepared to evaluate any proposed service provider before signing up for a course of action. As we noted earlier, even the best consumer debt consolidation loan or approach can fail in the long term unless a budget overhaul is performed as part of your examination of the cause of debt. Often a change in behavior is necessary as part of the process. Consider for example, the person that takes out a consumer debt consolidation loan to pay off card debts under very favorable terms, only to continue spending on those cards without paying back the entire balance due. In such case the person increases the total amount of debt principal owed and sets them self up for future problems. With successful debt management, consolidation is just one part of the story. Our article entitled how to get out of debt explores the role of the budget overhaul and provides ideas on where to start as part of the wider consumer debt consolidation strategy.