Debt Consolidation 101


DebtConsolidationCare: Make your family debt free today!

Debt Consolidation
Have your bills have reached a point where you are feeling forced into a never ending cycle of incurring more and more credit card payments just to keep your family living from day to day? Also, as all these easy credit card offers arrive in your mailbox, are you beginning to wonder if there is a way that any working person can ever find financial security? All this mounting payments can easily rob you of joy and comfort, you will find that it can overwhelm your family, and can even damage your ability to try and enjoy even the simplest pleasures of life.

Credit Cards are under a revolving credit payment plan. They are designed to keep you in debt, resulting in your paying an extraordinary amount of interest while trying to pay them off. Under these circumstances, most people will end up paying between 15 and 30 or more years. This means they will usually pay out 5 to 6 times what they originally borrowed. By changing from a revolving to a fixed payment plan, along with a lower interest rate, most of the money is applied to your principal balances instead of just paying finance charges each month, reducing your total payout term to 3 to 6 years.

Borrowing money to pay back borrowed money is economic suicide. If you are able to qualify for an unsecured loan to pay off your unsecured bills (most people do not) you are basically borrowing from Peter to pay Paul. If you take out a secured loan such as a home equity or second mortgage, you are attaching your current unsecured bills to something of value such as your home.

Debt Consolidation FAQ:

Q: Why does the debt consolidation program work?

A: Credit Cards are under a revolving credit payment plan. They are designed to keep you in debt, resulting in your paying an extraordinary amount of interest while trying to pay them off. Under these circumstances, most people will end up paying between 15 and 30 or more years. This means they will usually pay out 5 to 6 times what they originally borrowed.
By changing from a revolving to a fixed payment plan, along with a lower interest rate, most of the money is applied to your principal balances instead of just paying finance charges each month, reducing your total payout term to 3 to 6 years.

Q: Why is debt consolidation better than a loan?

A: Borrowing money to pay back borrowed money is economic suicide. If you are able to qualify for an unsecured loan to pay off your unsecured debt (most people do not) you are basically borrowing from Peter to pay Paul. If you take out a secured loan such as a home equity or second mortgage, you are attaching your current unsecured debt to something of value such as your home. The average interest rate in consolidation is 6 to 8 percent, which is usually less than most loans
today.

Q: How will debt consolidation affect my credit?

A: If you are current with all your bills and have a good credit rating, the creditors policies stay virtually unchanged. As long as you make your monthly payment on time, the payments to your creditors are considered on time. On the other hand, if you are over extended and have a poor debt to income ratio.
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Q: Is this like bankruptcy?

A: No. This is the opposite of bankruptcy. Bankruptcy is when you don’t pay your bills and you destroy your credit. In consolidation your debts are being paid, and your creditors are satisfied.

Q: Can my credit be repaired through debt consolidation?

A: Yes. By using our program you restructure your debt. Your credit rating will improve by showing a positive payment history. No one can erase your true credit history, but the longer you stay in the program, the closer you will be to establishing a solid credit rating.

Q: Can I quit the program?

A: Yes. However, if you do decide to quit the program, the interest rates will go back to what they were before you started.

Q: What are unsecured / secured debts?

A: An unsecured debt is an account or monies owed that has no tangible property or product attached to it. Examples: Credit Cards, Medical Bills, Department Store Cards, Signature or Installment Loans, etc. A secured loan has something physical attached, that protects the loan in case of default, such as a House or a car
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Q: Is this a loan? – Do the creditors get paid in full?

A: No. This is not a personal loan to you. There is no cash in hand. All your money is disbursed directly to your creditors at a lower or zero interest rate. The Free Debt Quote and its servicing agents are hired by you to do three things.

1. To set up and establish a new payment plan with your creditors that suspends your original terms and will help you get out of debt by lowering or eliminating your current interest rates.
2. Handle all Creditor and Collection agency phone calls after you have joined our Debt Consolidation program.
3. Consolidate your bills into one monthly payment.

Q: Who needs our service?

A: Anyone who is experiencing problems keeping up with their bills or seeking to rid their life of financial burden.

Q: I have debts prior to marriage, Can I do this alone?

A: As long as you were the only signer on the debt and it’s in your name alone, you can enroll in the program individually.

Q: Will creditors still call me?

A: If creditors call you after you enroll in the program, simply direct them to a service center. We will advise them that you are enrolled in our consolidation program, and there is no reason to contact you further.
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Q: How is my payment determined?

A: Each creditor requires a minimum payment to qualify you for the program. All creditors have different requirements for acceptance. The payment is based on your particular mix of creditors and your balances.

Q: Are creditors willing to work with your program?

A: Absolutely. Your creditors want to be paid. They also understand when a client contacts a debt consolidation company, they may also be considering bankruptcy. If you need service in California’s capitol city, visit this Debt Consolidation in Sacramento website.