Poster of debt consolidation in 1948

Are you tired of getting angry telephone calls from collection agencies?  Sometimes these callers can be quite rude, and the feeling left after the phone call can be unpleasant. Therefore, to take control of the situation, you must take the first step.

Debt consolidation is considered as the first step towards getting rid of credit card debt. A credit-card debt-consolidation loan is one of the methods of consolidating credit card debt. Other than this, you can also ask for a balance transfer to another credit card. Perhaps, due  to the credit card companies constantly bombarding us with junk mail promoting their cards, balance transfers seem to be more popular than consolidation loans. Some people forget that debt consolidation is available as a way of getting rid of their credit-card debt. However, it is an essential option to consider.

What does debt-consolidation loan mean? Put simply, it is a low-interest loan that you apply for with a  financial institution or a bank in order to get rid of your high-interest credit-card debt. This loan is founded on the same principle as balance transfers (combining one or more high interest debts into one low-interest one). This loan must be settled back in monthly installments as per the terms and conditions you agreed upon with the lender.

In general terms, this is an unsecured loan (it doesn’t require you to pledge any collateral or security such as a home or car).  If you, however, have a really bad credit history, the loan will have to be secured. A secured loan necessitates you to pledge a security, such as the home you own or something else that has value. Therefore, the worse your credit rating, the more difficult it is to get a credit-card debt-consolidation loan.

Though balance transfers and debt consolidation loans have the same objective, debt consolidation loans are considered better because you close most of your credit card accounts (the main culprits in landing you in this difficult situation). However,  balance transfers have advantages not available with debt-consolidation loans. Choosing between a credit-card debt-consolidation loan and a balance transfer is really a matter of personal choice.  But taking those first steps will pay off in peace of mind, and a better financial future, so why not begin today?

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