If you are thinking about debt consolidation, you might want to first consult a non-profit credit counselor.
Many people get into debt because they can’t afford to make monthly debt payments on top of paying for daily living expenses.
The amount of your monthly payment will depend on the total amount, interest rate, and payment terms of your consolidation loan.
There are thousands of companies that claim they can help you consolidate or manage your credit card debt so that you pay less or reduce your payment.
With a debt management plan, you make one payment to the credit counseling agency, which distributes the money to your creditors until they are paid in full.
Before agreeing to a debt consolidation arrangement, it's important to seek debt consolidation advice from a trusted financial professional. But it can also be a financial nightmare if you choose the wrong company.Other advantages include having fewer payments to make each month, and less likelihood that you'll be late on payments.What you rarely hear about are the disadvantages of debt consolidation.If you have enough cash left over after subtracting expenses from income, consolidation will be presented along with other options. How do you know if a debt management plan will work in your favor?When a counselor is knowledgeable and compassionate, these sessions can be enlightening and motivating. If he or she acts bored, judgmental or pushy, request a different counselor. First, the bulk of your balances should be in unsecured debts, such as credit and charge cards, personal loans and, sometimes, collection accounts.