Archive for August, 2005

Is Debt Consolidation a Good Alternative to Credit Counseling?

Debt consolidation is the process where you borrow money to pay off other debts.  The most common example would be getting a debt consolidation loan at a bank to repay your high interest credit cards.
If the interest rate at the bank is less than the interest rate on your credit cards, you pay less interest each month, which allows you to repay your debts faster.
With a credit counseling Debt Management Program you don’t borrow money; you simply make a settlement with your creditors, and with your credit counselor’s help you pay them off directly.
If you have the ability to borrow, perhaps because you have equity in your house, a debt consolidator may be a good option.  Your credit report will look good, because you paid your debts in full.
However, if you don’t qualify for a debt consolidation loan, then consumer credit counseling may be your best option, since it will give you the financial break you need.
Contact a credit-counselor.htm”>credit counselor for further information.