Does A Debt Consolidation Service
Reduce The Amount Owed?
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Disclaimer: While we have done our best trying to give you all
information you need in order to consolidate your debt the right way,
it is highly suggested you get seasoned advise coming from debt
consolidation and debt settlement specialists, this is the safest way
to get your finance back in order, plus in the shortest period of
Does A Debt Consolidation Service Reduce The Amount Owed?
There are many different types of programs designed to help consumers pay down
out of control debt. The available options range from simple counseling to full-
blown institutions that attempt to negotiate with the banks.
Loan modification and debt management agencies contact the creditors and try to
work out some type of deal in order to reduce the actual amount of the loan. While
this can be helpful since it will reduce the amount that is owed, it will reflect
negatively on your credit report.
Debt consolidation services do not contact the lending institutions directly. They do
not negotiate. The only thing a consolidation service does is tally up the debts, asses
the risks, and issue loans to the consumer to cover the cost of paying off bills
There is no reduction in the amount owed from using this type of program. You
will have to pay the exact total requested. However, there are two other important
points to consider.
The first is interest. There is a chance that the combined interest on all of the debts
may actually be higher then the interest on the single consolidation loan.
Ultimately, this means that the amount paid to the service will be less than what
would have been paid to the creditors.
The second point is the savings on peripheral charges. If part of the debt incurred
included mounting late fees or penalty charges, then you will sto