how does debt consolidation work?
480903
There are two types.\n\nThe first is a consolidation loan.  Pretty much just like any other loan, but they take into consideration that you are actually going to remove your current debts.  If you have a bankruptcy against you already, you probably won't get this type of loan UNLESS you get one from a company who secure the loan against your home. BUT be careful, if your not good at repayments (no offense but it doesn't sound like you are)m then this could be dangerous, because they WILL take your home.\n\nThe second is more of an agreement.\nA third party organization look into your current finances. They agree with you how much you are capable of re paying every month.  They then contact all the companies that you owe money too, explain your situation and ask the if they would work with you and them in coming to a repayment agreement.  This will include stopping all interest and late payment charges.  You then pay a lump some to the organization, who then give each company the amount that was agreed to be paid each month.\n\nThis services should be free to you, so make sure you find one that is. They make their money from the collectors. They would rather have some money make than no money back.
121317
If the payments end up being lower and if you can consolidate them with a lower interest rate.
242535
In order to consolidate you have to find out who your lenders are for each loan. You can do this by contacting the school for which the loans were given. If you have the same lender for all loans then you have to consolidate through them. The school's financial aid office can give you The numbers. You may pay the same place, but the lender could be different. If the lenders are different you have the option of choosing who you use. In that case you could ask the school who they recommend. I personally know that Sallie Mae is a good company that offers consolidation. You could try and call them. http://www.salliemae.com/apply/borrowing/smartloan.html \nthat is their website to apply for consolidation on line, and there is a payment calculator. Just keep in mind that if your loans are in their grace period, and you consolidate before the grace period is over you will have to start making payments.
515705
Talking to a credit conselor can help, but I would avoid a debt consolidation program , or at least get all the facts before joining one.  Many programs will actually negatively affect your credit because their proposal to your creditors will be to reduce monthly payments or eliminate late fees, and in turn creditors will "close your account".  Some debt consolidators are quite pricey, too. \nWhat I would do is first contact all creditors and try to negotiate a payment arrangement.  Ask them to waive late fees. I have had success with 4 different companies when asking for reduced/waived fees or lower interest rates.  Mostly they just will want to get the principle amount back and are not too worried about collecting fees.\nNext, talk to a credit rebuilding company like Lexington Law. For a fee, they can help you remove some marks from your credit. I brought up my credit score 100 points by doing this. \nDO NOT FILE BANKRUPTCY! you can find a better option that will not imact you so poorly.
970486
been there done that. I don't know how legal this is but what the hay.   Anyway, get a credit card from anywhere. Then get another one from anywhere. then get another one from anywhere. The ones advertised in magazines are the easiest. When you have these credit cards, you run them up to a $100 each and make the payments. You do this for three months. Then you look for one of these consolidation offers [usually in your junk mail from any bank] then you consolidate your three cards into one and that will bring down interest dramatically. One word of advice. If you are climbing out of a bad credit situation you have to make the low interest card payments on time and at least two times the minimum payment. You have to do this for one year. been there done that  I now have a 10,000 dollar credit limit. go slow.
518337
First, cancel your debt consolidation contract (if you can).  Many of these companies will simply let your accounts lapse just so they can try to settle the debt.  \n\nSecond, get out of debt yourself.  Otherwise, you've never changed your behavior which got you in debt in the first place.\n\nFinally, go buy a book called 'Total Money Makeover'.  This book will teach you how to eliminate your debt.  You can also consider a class (taught by the same person that wrote the book) called 'Financial Peace University' (see www.daveramsey.com).  My wife and I took this class in 2004 and are now debt free (except our house).  The average family taking this 13 course pays off $5,800 and savings $1,200.  \n\nContact me if you want specific help.  My wife and I now teach this class and have seen many people eliminate a ton of debt.  \n\nScott.....
672549
It sounds fishy.  If you are consolidating and paying for 3 years, it sounds like the deal he offered is that you pay for those 3 years and you are back owing what you owe today, the amount of what you owe.  Why would anyone in their right mind do that?  Maybe because it makes for lower payments today and for the next 3 years, but you'd be much better off taking out a personal loan from a bank and paying off your cards and then paying back the bank and not running up your cards again.
136683
If you can't afford to pay off the current student loans, how are you going to pay off a new consolidation loan?  If you default on that one, your credit history will get worse!\n\nWho has listed the loan on your credit report?  The collection agency or the original creditor?  Exactly when did it go into default?  How much do you owe?\n\nHere is my thinking.  First, blow off the collection agency all together if you can.  It doesn't matter what you say to them, your excuse is never good enough.  They will still want your money NOW and will only harrass you.  Send them a letter to quit bothering you, then contact the original debtor.\n\nTry to work out a deal with them to pay it back, but ONLY if they agree to remove the negative marks on your credit report and show the loan is paid in full.  The only reason you are paying them is to get your credit history fixed, but many times the creditor will leave the bad mark on your record.  Get the agreement in writing before you start paying them back.\n\nGo to the links I've supplied below for more information.  \n\nGood luck, I've been this route.
1106777
Debt Consolidation is only worth it if and only if you can get the lowest interest on it, and you have the means to pay at least the interest and bit of the principal on it. Do not get a debt consolidation if the institution asked for collateral (your house or lean against any of your asset-or equity). The reason is because credit card debt is unsecured debt, whereas when you put your asset to get a loan, you are putting your asset at risk. When you missed a payment or two, the institution has the right to call the loan and hence because you put your asset as a collateral, the asset can be auction/sold at the request of the institution. Read the fine print on the debt consolidation. Make sure the interest rate is the lowest through out the entire loan, some fine print will said 5% interest for the first 6 months and thereafter 17%. ( you are worst off!). Do your due diligent.\n\nYou will only save the interest payment on debt consolidation which is helpful in a way as you will pay the interest payment against the principal had you not consolidate your debt.\n\nBottomline, budget and watch your spending.
135788
Depends how much you owe and what your credit looks like, probably not good right? Talk to a lawyer or someone who knows about bill consolidation.
1101384
When you consolidate a student loan you no longer qualify for the Teacher Loan forgiveness or Nursing Loan forgiveness programs. So yes this a drawback.  It would be a good idea to calculate your interest savings of consolidation for the 5 years you are required to work & pay on your loan to qualify for the program versus taking what portion of your loans that will be left at that time that will qualify for the loan forgiveness.\n\nIf you choose to consolidate:\nThe consolidation of loans allows you to lock the current interest rate in, otherwise the rate will continue to fluctuate as the economy does. Rates are set to rise on July1 to 6.54% for Stafford Loans if you are currently in school/grace period and to 7.14% for those of you in repayment. Right now rates are at 4.7% for in-school/grace and 5.3% for repayment. Consolidation will round your interest to the nearest 1/8 percent so in-school/grace consolidated rate will be 4.75% and repayment rate will be 5.375% (this is for loans borrowed after 1996, rates are slightly higher on loans borrowed prior to fall of 1996).\n\nRepayment will also allow you to extend your repayment out longer than 10 years, lowering your monthly payment. Because of the large jump in interest rates it is highly recommend that students consolidate their loans by the end of the day today.\n\nThe Perkins loan may also be consolidated, it has a fixed (or locked-in) interest rate of 5%. So many students will opt to leave that loan out of the consolidation if the are still in-school so their interest rate isn't made higher in the weighted average of loans and their interest rates during the consolidation process. You can run examples using loan consolidation calculators at www.finaid.org.\n\nTo find a listing of all your loans you can use the National Student Loan Database www.nslds.ed.gov.  You will need to know your Dept of Ed PIN to access this info.  To retrieve your PIN you can request a duplicate be emailed to you within 4 hours at www.pin.ed.gov\n\nYou do have the choice of choosing another lender to consolidate with and their are many to choose from. And it is typically easiest to go with your current lender.  \n\nMany people on this site are recommending Direct loans.  They are reputiable but many other are as well.  To consolidate with Direct Loans you can call their phone number 1-800-557-7392 or complete an application on their website www.loanconsolidation.ed.gov. To consolidate at the website you will need your Dept of Education PIN and the amounts borrowed for each loan (and whether they are subsidized or unsubsidized). The PIN can be emailed within 4 hours so if you request it now you can still get your application completed (www.pin.ed.gov).\n\nRemember you only have until midnight on June 30, 2006 to complete the application if you select to consolidate your loans
1036265
You want to investigate www.daveramsey.com and get Dave Ramsey's books from the library. Debt consolidation is NOT the answer. Not trying to be preachy here but the answer is the debt snowball and careful budgeting. I know it sounds insane but it works. Get his book from the library and give it a try.
1113172
I was in the same situation but I'm pretty much out of debt because I consolidated my credit cards.  I'm in a program with Ameri-debt.  If you need the phone number contact me.  They have actually helped me alot and I've gotten a lot of my family members to join and they have felt alot of relief.  Hope I helped.
891036
You need a good consolidation company.\nConsolidating means creating a whole new loan for a longer period of time. This would hopefully lower your payments enough so you can get back on track, in this case it might SAVE your credit score.\nA credit counselor will give you some tools and suggestions for reducing your payments, just keep an eye on what the % are, you want it to be lower than what you pay now.\nHowever, debt consolidation can be nothing more than a way of putting off the evitable. It really does little to correct the problem. That's why many people come back to debt negotiation as a way of getting out of their financial problems and starting fresh start.\nMore here: http://finance.ebookorama.com \nalso plenty more to read here\nhttp://credit.ebookorama.com\nhttp://credit-cards.ebookorama.com\nhttp://credit-repair.ebookorama.com\ngood luck!
991134
A debt consolidation loan is not a bad thing by any means... just PLEASE make sure you don't run up additional debt on the credit cards you're consolidating.  If you do, then you'll not only have to pay the consolidation loan itself, but you'll be right back where you were with your old credit card payments.
7532
1. Cut them up and stop using them.\n\n2. List the balances, smallest to largest.\n\n3. Pay off the smallest debt first, as fast as you can.\n\n4. After paying the first one off, apply that payment to the second debt and pay it off as fast as you can.\n\n5. Keep repeating this process until they are all paid off.  It's called the debt snowball method.
1109743
I was in one of these for awhile, they negotiate with your creditors and get you a lower interest rate so you can pay off your debts without paying the highest interest...usually in a shorter period of time.\n\nBe very careful in choosing a company; some of them charge outlandish fees for their services!