More on Debt Consolidation

Usually, when a person gets behind on the credit card bills, it can be because he or she owes money on more than one credit card and they carry high double-digit interest rates. With a debt consolidation, all of these bills can be consolidated within one loan. Usually, the interest rate is much lower, sometimes just half the rate of the credit cards. This, in itself would lower the debt paid every month. There would be only one low monthly payment, instead of several. Another type of local debt consolidation is debt management program which includes such professionals as credit counselors. These counselors take all the bills owed, find out the person’s monthly income. Then they figure out how much living expenses the person needs every month. They adjust the monthly payments to the amount that the person can actually pay to the creditors. The credit counselors contact the creditors with an amount to see if they will accept it. If the creditor and the person agree on this amount, than that is what the person would pay every month until the debt is paid off. One payment would be paid to the credit counselor by the debtor. The credit counselor would then send the different payments to the creditors.