Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Common Myths about Debt Consolidation Programs


Published on

Myths about Debt Consolidation Programs and what you should know about Debt

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

Common Myths about Debt Consolidation Programs

  1. 1. Common Myths About Debt Consolidation Programs Common Myths About Debt Consolidation Programs
  2. 2. A lot of people are coming up with the wrong assumptions about debt relief because they are confused about the similarities and differences of each program. Debt consolidation is probably where most consumers are having a difficult time understanding because it is such a broad debt relief term to begin with. Debt consolidation simply refers to the efforts of a debtor to simplify their debt payment methods by combining their funds into one manageable payment scheme. The goal is to make the process easier so as to make debt relief more attainable. The two words alone does not necessarily signify debt consolidation loans. Not all consolidation efforts need a loan to make it possible.
  3. 3. Credit Counseling/Debt Management Plan Myth: All programsarethesame. Fact: Thegeneral ideaof debt consolidation may bethesamebut thedetailswill vary depending on theuniquesituation of the debtor. It isvery important that you identify your financial weaknessesand strengthsand discussit with your credit counselor. Thiswill help you comeup with aplan that issuited to your capabilitiesand will haveahigher chanceof success.
  4. 4. Myth: All credit counseling agenciesarenon-profit organizations. Fact: Whilemost of them arenot for profit, therearecompanieswho offer paid services. They arestill legitimatebut besureto conduct your duediligenceto becertain.
  5. 5. Myth: Credit counseling agencieshavevarying creditor payment methods. Fact: Thecreditor benefitshavebeen standardized throughout the industry so you will rarely find acompany that offersabetter one. However, your credit counsellor will aim to provideyou with a payment plan that you can afford to pay for. Should you beunableto afford that, your chancesof getting alower schemewith another credit counseling agency islow. Instead of searching for adifferent company, you will also beadvised to shift to adifferent debt relief program altogether. Debt settlement and bankruptcy aretwo other optionsthat hasalower monthly payment plan.
  6. 6. Debt Consolidation Loans Myth: A collateral isalwaysneeded. Fact: You do not need acollateral to avail of adebt consolidation loan. However, therearebenefitsto bemadewhen you avail of asecured loan likelower interest rates. Thisisprobably why aHomeEquity loan isthemost pursued typeof debt consolidation loan.
  7. 7. Myth: You need agood credit score. Fact: Likeacollateral, agood credit scorewill help you acquirelower interest ratesbut it doesnot definewhether you will begranted aloan or not. Even thosewith bad credit scorescan still opt for adebt consolidation loan aslong asthey havethemeansto pay for it and the overall monthly amount isnot greater than thecurrent. Myth: A loan isthebest way to get out of debt. Fact: Thereareother optionsto get out of debt and each of them arebest for particular financial situations. It isstill best to consult an expert about it or at least analyzeyour financescarefully to know what isthe best debt relief option to take.
  8. 8. Sources:    Programs&id=7395052/ Sources:    Programs&id=7395052/