Discussing in Dallas, TX: Are Debt Consolidation Loans the Answer?

If you have been feeling overwhelmed by your bills and a mounting pile of debt, you're probably ready to try just about anything to find a way out, including a debt consolidation loan. This option deserves careful consideration, especially after a little research. You want to be sure that if you commit to a debt consolidation service you are ready for the responsibility of the monthly payments. You also want to be certain that you understand all the details of your debt consolidation loan.

What is a debt consolidation loan? A debt consolidation loan is a loan that combines several debt sources together into a singe payment each month. A new loan is made that pays off your existing qualified debt and you make regular monthly payments on that new loan. Debt consolidation loans are available in several types and at different interest rates, so it is important to check around and find a reputable loan company.

What kinds of debt consolidation loans are available? There are three basic types of debt consolidation loans available. But, according to Dallas’ America Debt Resolutions (www.americadr.com), it is important to research them carefully to be sure you understand exactly what you are agreeing to.

• One option that is often suggested is a zero-interest credit card debt consolidation loan. With this method, you can transfer all your credit card debt onto one card with a zero-interest rate, freeing up your other cards, giving you a single payment and saving a great deal of money in interest. There are problems with this type of debt consolidation, however. First of all, if you are in deep debt trouble, you may not qualify for a zero-interest card. Even if you do receive the zero-interest perk, it is almost always a temporary introductory interest rate that will go up at the end of a pre-determined period of time. Then you will need to pay the new interest rate on the consolidated loan- which will be much higher- unless you transfer everything to a new zero-interest card. Opening new credit accounts and switching too often will also cause you problems with your credit report, so be careful of zero-interest credit card debt consolidation loans.
• A second type of debt consolidation loan is through a home-equity loan, or second mortgage. This is considered a secured loan, because your home becomes the collateral, or security, that you will repay your loan. This type of loan can get you out of trouble, if you have accumulated equity in your home. This can be very risky, however, because if you default on your consolidation loan, you could wind up losing your home.
• A third option for a debt consolidation loan is through a debt consolidation service. A debt consolidation service provides counselors that are presumably there to help you secure a consolidation loan to ease your financial troubles. Unfortunately, these companies often turn out to be an extension of various credit card companies and they may have a hidden agenda. If the debt consolidation service is actually owned by a major credit card company, their true agenda may be to get you to pay out as much money as possible for as long as possible. It is critical to research your options- and your debt consolidation company- very carefully.

A debt consolidation loan may be an answer for your debt problems; however, you may also want to consider debt settlement as another alternative. Find out more by contacting America Debt Resolutions at 1-877-350-3328 or customerservice@americadr.com.