Companies and agencies like Freedom Debt Relief (FDR) are generally set up to offer assistance to people with debt problems that may be too big for them to handle on their own. The services offered by such agencies range from debt settlement, negotiation and credit counseling. If you are considering getting a debt consolidation loan, these agencies and companies may provide you with the necessary advice and tips for you to base your decision upon. This is because their main objective is to assist their clients to get out of debt permanently while the concept of debt consolidation loan is to take up another debt to help pay for other debts. However, you may appoint them as your representative so that you may pay your money to your creditors through them. Basically you may only have to keep track of one single debt payment every month.

There are many types of debt consolidation loans for you to choose from. Generally, if you have an asset that you may want to put up as collateral in order to get a relatively lower interest rate on your consolidation loan, you may opt for secured loans such as a home equity loan. In essence, you may be putting up the equity you have built up in your home as collateral. Of course, you may have to have sufficient equity in your home to become eligible for this particular type of loan. Another alternative is to opt for a home equity line of credit which is basically the same concept as a home equity loan. The only difference is that you consolidate your debt and make one monthly payment towards the line of credit. The line of credit may be made accessible with checks issued by the lender.

Another type of debt consolidation loan you may consider is the credit card balance transfer. You may be able to transfer all your credit card balances onto one single credit card, preferably one with the lowest interest rate. Sometimes credit card companies may offer new credit cards with 0% interest for the first year or something in that manner to entice new customers. You may take advantage of this offer by applying for this credit card and transfer all the balance from your other cards to this one. So you may have one year to pay off the balance on this one card without having to pay any interest. However, you may have to be sure that you are aware of the low rate cut off date and it is advisable that you pay off all the balance before the cut off date is due. You may also have to make sure that the card you are applying for has a large enough credit limit to hold all your credit card debts.

A personal loan may also be an option for you to consolidate your debts. It is an unsecured loan, so you may not run the risk of losing any of your assets should you default on the loan. Generally a personal loan would require you to pay a fixed amount every month over a fixed period of time. In some cases, you may have trouble qualifying for a personal loan especially if your credit rating is less than satisfactory. If you have poor credit, chances are your application may not be approved at all. Even if your lender considers approving your loan application, you may be slapped with a high interest rate because of your low credit score. This is why it may be a good idea for you to try to raise your credit score to an acceptable level if you wish to apply for a personal loan to consolidate your debts.

Agencies like FDR might normally suggest the type of consolidation loan that would suit you best. However, it is always up to you to make the choice. It is advisable that you consider all options before you decide on one to avoid landing yourself into deeper debt than before.

Author Bio: freedom debt relief

Category: Finances
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