Debt Consolidation - Slippery Quick Fix?
Are the words debt consolidation really two magic words, or are they a fantastic answer to debt with a slippery side to them? Debt consolidation sounds magical and it can entice you into believing all your debt problems will be over with once it has taken place, but and easy fix is not always the right answer.
Loan officers must appear to be quite magical if they are able to take all of your debt and package it neatly together by means of some kind of financial wizardry. Then actually shrink this debt and enable you to pay back $100 a month. Plenty of people have dreamed about this and an industry has sprung up around supporting this fantasy. Just check your in-box or for that matter your physical mail box on a daily basis and some financial wizard wants to offer you a solution for your credit card debt. Be careful, these are more like covert sting operations than above board debt consolidation operations.
Any organization which promises to cut monthly payments by as much as 50% or slash interest rates to virtually zero, might appear to be incredibly alluring. But you have to stop and ask yourself one question, "if this company was to do this, how would they make money?" The answer is they wouldn't, so they are making money somehow, yes, they are generally selling you an e-how to book or other how to product that will enable you to get your interest rates slashed yourself, but they are not offering debt relief. Or they are not telling the truth, and wizards and magic aside be careful of flying monkeys, the road to fix the debt consolidation is not the same as the yellow brick road to Oz.
If you need a debt consolidation loan, it is more than likely because you have already missed payments somewhere and you are looking for a fast fix out of a money trap you are already busy sinking up to your neck in. These are not easy to get, it is a fallacy that they are, as generally speaking you are already a money risk. Don't whatever you do take a hard money loan to tide you over, before you know it the interest rates of anything up to 22% may knock your feet out from under you sooner than you think, but they will definitely make sure you pay a heck of a lot more.
Debt consolidation companies are paid a portion of the payments which go to your creditors, and you are in actual fact able to negotiate your own lower interest rates and your own lower monthly payments. All you have to do is call the credit card company. If you can't afford the debt and they are to be paid back, they will work out a plan to reduce the interest and lengthen the payment term. Why pay a debt consolidator to do this you are throwing good money after bad.