Internet's first get-out-of-debt community - 129,000 members

How does consolidating work? Can you only consolidate your credit cards or can you include your vehicles in that? Does it make your payments go down or does it make your interest go down or the amount you owe or the time to pay it off. Just starting to research this a little more and would love some pointers....thanks

Posted: Thu Jun 05, 2008 9:21 am Subject:

A debt consolidation loan covers all the unsecured debts, like credit cards, medical bills etc. You still owe the money, but sometimes you can get a lower interest rate, especially if you offer collateral for the loan. Best of luck.

Posted: Thu Jun 05, 2008 9:38 am Subject:

I don't want a loan. Just the consolidation that is mentioned on this website. A loan would just make a bad situation worse I think

Posted: Thu Jun 05, 2008 9:43 am Subject:

Outside of a loan, the type of program you are likely talking about is called a debt management Plan or a DMP. These repayment plans are administered by Consumer credit counseling agencies.

With a debt management plan you will repay all of your accepted creditors over a newly negotiated contract and terms. The counseling agency will negotiate with all creditors to accept a lower interest rate " usually around 6-10 %", waive late fees and over limit fees and spread your payments out over 4 to 7 years. You will repay 100% of your current balance with a payment that typically runs about 3% to 4% of your total debt. This program won't hurt your credit score. It does show on your credit report that you are in a counseling program but drops off as it it never happened once you complete it. Hope this helps. Very Happy

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