Do you have multiple debts which seem to just stack up on top of each other? Do these debts build up on different fees between each company creating addition charges each month which add up so quickly they triple the amount of debt you owe over a course of time? Do you feel as though you now have gotten yourself in such a deep state of debt you can no longer break free? If so debt consolidation may be the solution for you.
What is debt consolidation? Debt consolidation is a plan in which helps a person that is in trouble with debt due to many different businesses due to be paid at the same time every month.
This could be due to companies such as credit card businesses who add on additional fees each month which can total up to costing more than your total monthly payments to your debt, and in the long run these fees create a debt which can scale to double or triple the original debt owed.
A consolidation plan is a company who offers the option to turn all of these many different bills owed each month into one simple loan bill to be paid monthly.
How does consolidation work? Consolidation will work as the following; you take out a loan with a consolidation company in the equivalent of all debts needed to be paid off to get out of debt.
This total amount of loan is applied to pay off all of the companies you owe debt to.
Then the consolidation company creates a payment plan between you and them to slowly pay off this debt, in a more affordable less risky manner.
Will consolidation affect a credit score? Consolidation will not hurt your credit score as long as you make on time payments each month to the consolidation company.
You will also need to prevent any chance of debt while and after your consolidation plan to keep yourself financially stable thereafter.
Consolidation can actually repair your credit by reporting to credit scoring companies of your successful timely payments, and clearing of debt.