Debt Consolidation Articles

By [http://ezinearticles.com/?expert=Robert_A_Johnson]Robert A Johnson

Debt consolidation has become very important to the everyday consumer, as accumulating debt (especially unsecured debt) has become very easy. Consumers accomplish debt consolidation basically by taking out one loan in order to pay off a number of other loans.

The advantages of debt consolidation include the simplicity of dealing with a single loan instead of several, and a lower interest rate. The lower interest rate carried by debt consolidation loans saves the consumer a lot of money in the long term.

Consumers should avoid commercial debt consolidation companies, even ones that advertise themselves as non-profit. These companies often charge application or handling fees that can be circumvented by going to other sources of help.

Consumers can use their credit cards for debt consolidation. To do this, the consumer moves their high-interest credit debt to their card with the lowest interest rate. Consumers can often find cards with a low APR, or even cards with a zero percent introductory rate.

Homeowners should consider acquiring a second mortgage or a home equity line of credit for debt consolidation. These types of loans carry much lower interest rates than credit cards, but the consumer risks losing their house if they default on the loan.

If the consumer is accumulating excessive debt because they are constantly spending beyond their means, then debt consolidation will not provide long-term help. Chronic debtors need to thoroughly asses their spending habits, and commit to lifestyle changes that will permanently improve their financial situation. Debt consolidation is useless for consumers who just amass more debt on their newly-zeroed cards.

Robert A Johnson is an expert in the various methods of debt reduction and has successfully reduced his own debt. He studied writing and English literature at the University of Dallas. He is also a ninja master. Please find the rest of his articles by following this link: http://www.creditsolutions.com