Credit Redemption

Debt consolidation rolls multiple debts, typically high-interest debt such as credit card bills, into a single payment. Debt consolidation might be a good idea for you if you can get a lower interest rate. That will help you reduce your total debt and reorganize it so you can pay it off faster.

Debt consolidation is a great tool for people who have multiple debts with high-interest rates or monthly payments—especially for those who owe $10,000 or more. By negotiating one of these loans, you can benefit from a single monthly payment in lieu of multiple payments

Consolidation can lower your loan payments if you get a lower rate or can pay off your debts sooner.
Debt consolidation is the act of taking out a single loan to pay off multiple debts. There are two different kinds of debt consolidation loans: secured and unsecured. Consumers can apply for debt consolidation loans, lower-interest credit cards, HELOCs, and special programs for student loans. Benefits of debt consolidation include a single monthly payment in lieu of multiple payments and a lower interest rate.

Debt Settlement vs. Debt Consolidation

An important point to note is that debt consolidation loans don’t erase the original debt. Instead, they simply transfer a consumer’s loans to a different lender or type of loan. For actual debt relief or for those who don’t qualify for loans, it may be best to look into a debt settlement rather than, or in conjunction with, a debt consolidation loan.

Debt settlement aims to reduce a consumer’s obligations rather than the number of creditors. Consumers can work with debt-relief organizations or credit counseling services. These organizations do not make actual loans but try to renegotiate the borrower’s current debts with creditors.