Debt Consolidation Loans A Debt Consolidation Loan is used to combine all your existing consumer debt or credit card debt into a single loan and one monthly payment. The advantage of this type of debt loan is that you can consolidate your high interest credit cards, auto loan and/or student loan debt, into one single lower monthly payment. It allows you pay off bills and stop creditors from calling. Depending on the amount of debt that you have you may or may not collateral. Most people will take out a debt consolidation loan against there home and that will allow them to get a very low interest rate.

The debt consolidation loan is not always the best way to go. Since you usually have to have collateral for this type of loan, you place your assets at risk and extend your debt further into the future. Now you have a debt consolidation loan to pay for and many people are tempted to start using those credit cards again.

Debt Management Programs A Debt Management Program is a program that helps people get out of debt and usually within a reasonable period of time. All your payments are consolidated into one affordable monthly payment. You send us one payment each month. We then share out this payment between your creditors and pay them a pre-negotiated amount. Most creditors will eliminate or reduce interest charges when you are on a Debt Management Program, to reduce your repayment time.

Types of debts that would qualify for this type of program would be credit card debt, department store credit cards, gas credit cards, unsecured personal loans, student loans, utility bills, medical bills, back taxes, and many other types of unsecured debt.

The Debt Management Program does take time and each creditor establishes its own specific criteria for payments under a Debt Management Program. Generally the average individual making minimum monthly payments will achieve debt free living in approximately four to six years, depending on who the creditors are and the amount owed to each. Clients are encouraged to make higher than minimum payments when they are able to do so in order to become debt free faster.

Debt Negotiation Program A debt negotiation program is also known as a debt settlement program. Debt negotiation and debt settlement is a process that helps you pay off all of your credit card bills, and get you out of debt faster - often at a savings of 40% or more. It is a more aggressive approach to getting out of debt, and usually you must be behind in your payments to be able to get the creditors to negotiate with you on a settlement. Debt negotiation can be very risky, and have a long term negative impact on your credit report and, in turn, your ability to get credit. That's why many states have laws regulating debt negotiation companies and the services they offer.

A Debt Negotiation Program should be viewed and considered as a last-resort measure. It is only a half step before bankruptcy and is primarily designed for people who are having financial difficulty and are either unable to complete credit card counseling (also known as CCA) programs, are close to filing for bankruptcy, or have experienced setbacks and are no longer able to continue making minimum payments. Over 65% of consumers fail to complete credit card counseling programs. Most generally a lender has little motivation to settle for a pay off less than the full amount unless the debtor is already 2-3 months behind on bills. This is exactly what negotiation is and which means it is a complete destruction of a credit history.