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How Debt Consolidation Companies Work for You

How Debt Consolidation WorksHave you fallen deep into debt? Are you having a hard time keeping up with your financial obligations? Millions of Americans, just like you, fall behind on paying their bills every day, with many resorting to the drastic measure of bankruptcy. But a better solution may be a debt consolidation loan. Having your debt rolled into one, manageable account may open up the opportunity to start afresh while you pay down your debt. Debt consolidation companies follow the same basic process to determine which program is best for each person’s specific situation. Here’s how: 

To take advantage of a debt consolidation loan, you’ll go through the following steps.

  1. Evaluate Your Finances: The first step torwards consolidation is to take a close look at your finances. With the help of a debt counselor, you need to evaluate all the details of your payments and income to determine how much you can afford to pay each month.
  2. Negotiate with Creditors: The second step is handled by the debt consolidation company. They will negotiate on your behalf with your creditors and collection agencies, if applicable. Their efforts may result in waived or reduced late fees and fines. All of your active accounts will be closed. For now, you not be able to open any new credit accounts or create any additional debt.
  3. Prepare a Budget: The third step, preparing a budget, is vitally important not only for those who are struggling financially, but for every consumer. The debt consolidation company will assist you in preparing one based on your current financial situation. Unless you learn better money management skills, you are destined to repeat the past. A detailed budget will put in place the structure you need to live within your means.
  4. Agree to Plan: The fourth step is agreeing to a repayment plan. The consolidation company will negotiate and prepare an agreement that is acceptable to you and all of your creditors.
  5. Begin Repayment: The final step is the commitment you make to honor the repayment plan. Monthly payments will be made to the consolidation company who distributes those funds to your creditors.

Debt consolidation should never be taken lightly. Ask questions and be actively involved with your counselor. Be sure you understand all the details of your repayment plan, including interest rates and fees. With a sincere resolve to get out of debt and a deep commitment to stick with the plan, your future will eventually be debt free.

* Get a free debt evaluation, or visit DebtOMG.com for tips and advice on saving money and reducing your debt.

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rates, and fees may change without notice. Please visit the referenced website for up-to-date information since program terms may change without notice to us or our visitors. In some cases we may receive compensation for financial products or services mentioned on this website. All opinions and views expressed are soley those of the authors.