Free Credit Card Debt Consolidation
Monday, June 29th, 2009 Subscribe To Our Feed
Our philisophy for managing money has changed. Free Credit card debt consolidation and dealing strictly in cash are two of the new the most common changes that people are making. If the truth be told, paying off your debt on your own is the completely free method of debt management.
A debt consolidation loan will require you to pay closing costs, but you may be able to have them added to your loan. Keep in mind that it is not really smart to payoff debt with debt. Debt consolidation loans, in most cases, are secured with your home. You must understand that defauling on the loan could cause foreclosure proceedings on your home. If you look at the recent economy, taking out a home equity loan a few years ago may have put you upside down in your home loan. This is a terrible position to be in.
A debt settlement company will charge you based on the amount of money they are able to save you on your credit card balance. The normal fee can be anywhere from 15% t0 25%. So, if they save you $2,000, you will be paying from $300-$500 for this service with a net savings of $1,500-$1,700. There are disadvantages. You will have to pay taxes on that same amount and this transaction will not be reported favorably on your credit.
Credit counseling service is another option you have and for most people that want help managing their debt this alternative is best. You wiil see an interest rate reduction that will be under 10%. An interest rate reduction can be a big saver of time and money. Get onto any credit debt calculator and you will be amazed at what an interest rate reduction can save you. This service usually runs you about $30-$50 a month. Having to make only one payment each month is one of the biggest conveniences of debt consolidation.
Although these are not free credit card debt consolidation options, they are going to cost you less than what you are paying now. Some debt relief methods are better than others and not all will work for all situations. It will depend on your personal debt situation which debt relief solution will work best for you.
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