Credit Consolidation- Top 4 Ways To Achieve Your Financial Goals

Credit consolidation is a strategy being used more and more by Americans as we struggle to get our economy back on the right track. Business is booming at such a rate for consolidating debt that there is just a plethora amount of companies opening up every month, or though it would seem. Our goal here is to simply explain 4 of the most common methods people are using to achieve their goals.

The first topic when discussing credit consolidation always centers around refinancing or HELOC ( home equity line of credit). Sad to say that it was just a short time ago that this strategy was probably the most popular and easiest way to do this, not anymore. With loans so easy to come by, and with the value of homes soaring to new heights, this was an incredible option. Talk about crashing and burning, wow. It seems as though we did a complete 360 in record time. With home values decreasing and loan requirements becoming more stringent, this option is not as viable as it once was. Okay wait for it folks, here it comes, the old catch 22 that you just knew was on the way because there is a certain risk with this that most people are very uncomfortable with even if they do have the credentials to qualify. Here lies the problem my friends, that being whenever you move unsecured debt to secured debt there is a risk, meaning besides your credit rating taking a hit, this could put your home ownership in jeopardy if you fail to meet your obligations for any reason what-so-ever. I hope I didn’t scare anybody off with all that, but it is something everyone must be made aware of when considering this as something that you want to do.


I’d be willing to bet that when I mention the second way of credit consolidation we want to talk about most of you already know of or heard it before, it is a debt settlement program. I think the popularity with these credit consolidation services keeps on increasing because of the ease to find and enroll into them as compared to some of the other ways being offered.  Immediately following enrollment, there are certain benefits and privileges that will be awaiting for the consumer. Lets take a quick look at what you can expect without going into great lengths here. You can expect your debt to be reduced, which of course leads to lower payments every month, and the cancellation of those pesky late fees and interest charges that have been piling up. Now that has to get your blood pumping with excitement. I know you are all waiting for me to drop the bomb, you know, when I tell everyone the bad side of this. Okay here it comes since you asked for it. Your credit rating will be impacted by this negatively until you have stayed the course and completed your program. Just a fast quick plus note here. It surely beats the heck out of the alternative, bankruptcy. The good news is once you finish up with all your obligations, you will see that your credit worthiness will be restored rather quickly.

Another way people are using credit consolidation to help with their finances is through a DMP or debt management plan. The many benefits with this will include, but not limited to, lower interest rates, those annoying phone calls will cease, late fees as well as over draft fees will stop, and payments will be combined to form a single  monthly payment. Credit consolidation services such as this will also protect your credit worthiness while you are working hard with putting your finances back to where they need to be. Generally speaking, it only takes the average person maybe 4-5 years to get rid of their debt once enrolled into this program. 

Now it’s time to talk about a way of credit consolidation that many people just don’t like for many reasons. Personal loans is what we will be bringing up next. This is the least favorite just because of it’s nature. Since it is an unsecured loan it will be more difficult to obtain one, and the amount you get will probably be for much less then if you tried another method. The risk with this will be solely on the lender since you will not be putting up your home as collateral. This will result with the consumer paying higher interest rates. It’s not to difficult to understand why I put this method last and why it’s probably dead last as far as which ways are the most consumer friendly. I guess not putting your home in jeopardy is a plus though. There it is everyone, 4 ways credit consolidation services and methods are being used everyday in this country to help people regain control of their finances once again.