Wednesday, December 17, 2008

Debt Free League Debt Settlement Rivals Consolidation

Despite the popularity of debt consolidation, the ugly truth is that it's merely a “band-aid” treatment for most. The reason for this is that debt consolidation only reduces interest. Consequently, people eventually are appalled when they see their debt loads were barely decreased.

If you’re seeking to consolidate debt via a debt consolidation loan, you will also face a number of challenges. The first issue with the debt consolidation loan approach is that it’s typically available to homeowners. Plus you must pledge the equity on your property as collateral in exchange for the loan. Consequently, if you default on any mortgage payment, the lender could easily foreclose on your property.

Additionally, instead of helping you curb the debt cycle, a debt consolidation loan can hurt you with unbearable periodic rises on the loan’s original interest rate. This was the cause of many rampant sub-prime lending abuses that contributed to a spike in bankruptcies and foreclosures, and our eventual recession. Thus, if you opt for the debt consolidation loan approach, it is very likely that instead of getting out of debt, you may dig yourself deeper in the hole.

Compared to debt consolidation, debt settlement can produce superior savings on the interest and principal reduction on credit card debt, collection, medical and business accounts.

2 comments:

  1. Pretty good post. I just stumbled upon your blog and wanted to say that I have really enjoyed reading your blog posts.Any way Ill be subscribing to your feed and I hope you post again soon
    bba

    ReplyDelete
  2. Alliance and Leicester Online Banking
    The first issue with the debt consolidation loan approach is that it’s typically available to homeowners.

    ReplyDelete