Today's economy has caused some very difficult times for many consumers.
Debt is still continuing to grow as jobs are being eliminated and becoming harder to find.
Debt relief is something many people are looking for to be able to overcome their financial problems, and debt consolidation has become a very popular option.
The choice of debt settlement has many benefits as it does combine debt and offer one monthly payment with lower interest rates.
The problem with this is that it is just a symptomatic relief and not a cure for the credit problem.
Before you agree to a program with a debt consolidation agency, it is important to know all of the facts about the program, what the agency offers and exactly how it works.
It may or may not be the right program for you and your financial situation.
Before signing any agreement, make sure that the cost of this new, combined loan is honestly less than what you have been paying to creditors already.
Many times, candidates for a consolidation program do not qualify for the lowest possible interest rate.
Also, when the loan is unsecured, the interest rate will tend to be higher.
It is recommended that you calculate the interest rate and fees on all existing account to find the total amounts of payments you are making right now.
Then compare the amounts you have determined to the amounts that have been figured with the consolidation loan and make sure that it is a better choice.
Besides, not always getting the best rate from a debt consolidation agency, another negative ramification is that the reduced payment plan will probably be reported on your credit report by the consolidation agency.
Even though an agreement has been made with your creditor for the reduced payment, you did not technically pay the debt as it was originally agreed upon.