Is there difference between debt consolidation and consolidation loan?
Date: Wed, 03/01/2006 - 04:13
Simson, welcome to the forum. A debt consolidation loan usua
Simson, welcome to the forum.
A debt consolidation loan usually requires some type of collateral(but not always), sometimes a home equity loan, or you can go through a bank or other financial institute. They pay off all your creditors, then you only owe them.
Debt consolidation is when you go through a company that works with your creditors to lower your interest rates, you mail in one payment to the company, and they dispurse the money to each creditor each month...but they do not pay off all the creditors in this case. You are usually required to close all accounts, and basically you are having a middle person make all your payments and communicate between you and the creditors.
A few years ago I got a consolidation loan through GE Capital Financial. We gave them all our account info and they paid off all the debts, then we just paid them. It was a great deal, only they did not require us to close our accounts, so my husband just ran them back up. Stupid, yes. So, regardless of which you go with, be smart and close your accounts, then there is no temptation there.
Hope this info helps.
Hi Simson, Welcome to forums :D TMD, has explained it so w
Hi Simson,
Welcome to forums :D
TMD, has explained it so well ??? no room is left for doubts.
debt consolidation loan is a new loan that covers all your existing debts. You can pay off your debts with it and you will have just one loan thereafter. Consolidation loans are generally long term loans, so you might have to put huge money towards the interest. Some lenders also ask for collateral and there is a risk of losing the property if you default.
On the other hand, debt consolidation efficiently saves some money as it reduces the rate of interest and removes the financial charges. The payment plan is specifically made to meet your needs and makes you debt free sooner.
You can go through the benefits of debt consolidation here-
http://www.debtconsolidationcare.com/benefits.html
Oh TMD--I think you and I talked about this same thing a little
Oh TMD--I think you and I talked about this same thing a little while back when someone else was asking. I remember saying that me and my husband had went out several years ago and took out a second mortgage to pay off all of our debts---then before we knew it, we were RIGHT back in debt (and THEN SOME cause now we had a second mortgage!). One of the DUMBEST things we've done!!!! Dumb Dumb Dumb.
Yeah, well needless to say...my husband is grounded from money..
Yeah, well needless to say...my husband is grounded from money..FOREVER!!! Do I think he learned a lesson...probably not. I still have to keep the checkbook away from him. I feel bad, because he works and then has to come ask me for money...and a lot of times I have to say no...isn't that bad :cry:
No, that's reality. Some people just aren't made to manage mone
No, that's reality. Some people just aren't made to manage money, and when you have a family to take care of, somebody has to step in and take control of the situation! I had to do that with my ex. It was getting ugly, and I am still suffering the consequences on my credit report!
~Mary :)
Quote:I still have to keep the checkbook away from him. I feel b
Quote:
I still have to keep the checkbook away from him. I feel bad, because he works and then has to come ask me for money...and a lot of times I have to say no...isn't that bad |
I feel guilty but thats how it is at my house too!!! This is a long story and I won't get into it here---possibly a story for my blog though---but my husbands dad/family puts him on guilt trips all the time, wanting money out of him for this, that and the other....if I didn't have control over the money---he would give into them everytime they wanted something. makes me madder than heck!!! I'm scrapping pennies, he talks to his dad and finds out that they want to go eat but don't have the money and expect my husband to jump. What makes it so bad, is WE DON'T have the money to go out to eat with so why should I care whether they do or not? I mean, we shouldn't give them the money to go out to eat when we can't even afford to ourselves. My husbands brother used to jump everytime they called--to the point DVD players and VCRs went to the pawn shop to give them money to go out to eat with. He can't do that anymore because he lost everything to pawn shops. Isn't this insane!!!!?? this is the same brother that is walking now because he lost three of his cars to title loan sharks. He doesn't have a pot to---well you know. The dad doesn't either---they think we have a money tree in the back yard. Can't use my husbands brother anymore, they've done used him up to where they can't get anything else out of him---this is why I control the money.
You should expand on that one on your blog. Get it off your che
You should expand on that one on your blog. Get it off your chest! I would like to hear more on this one, what a bunch of jerks!
:)
~Mary
I know how you feel Shirley. My mother in law wants us to buy h
I know how you feel Shirley. My mother in law wants us to buy her a new vehicle because her van is having trouble. Hubby offered to work on it, but she can't pry her butt out of her chair to bring it over to have him work on it. Mother in law thinks because we are beginning to see daylight that we should fork over any extra money we have. That is not going to happen. I told her last night to get off her lazy butt and quit living on the state and get a job and get her own vehicle, we are not footing the bill for her!
Haha!! Good for you, Tammy!! Just because you are getting back
Haha!! Good for you, Tammy!! Just because you are getting back on your feet doesn't mean you have to help everybody else now!
~Mary
Thanks a lot guys for putting such a useful insight. It has been
Thanks a lot guys for putting such a useful insight. It has been of a lot of help.
You are most welcome simson :D Keep watching forums :D
You are most welcome simson :D Keep watching forums :D