Consolidating a loan definition

Here’s why you should skip debt consolidation and opt instead to follow a plan that helps you actually win with money: The debt consolidation loan interest rate is usually set at the discretion of the lender or creditor and depends on your past payment behavior and credit score.

Even if you qualify for a loan with low interest, there’s no guarantee the rate will stay low.

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Debt settlement companies also charge a fee for their "service." Often, the fee is anywhere from 15–20% of your debt.

Think about it this way: If you owe $50,000, your settlement fees would range from $7,500–10,000.

And now the total loan amount would jump to $37,103.

So, that means you shelled out $2,282 , although often the terms are used interchangeably.

Debt settlement is a scam, and any debt relief company that charges you before they actually settle or reduce your debt is in violation of the Federal Trade Commission. When you consolidate your debts or work with a debt settlement company, you’ll only treat the symptoms of your money problems and never get to the core of why you have issues in the first place.

You don’t need to consolidate your bills—you need to pay them off.You’re in deep with credit cards, student loan payments and car loans.Minimum monthly payments aren’t doing the trick to help nix your debt, and you’re flippin’ scared.Pay attention here, because these crafty companies will stick it to you if you’re not careful.We’ve already covered consolidation: It’s a type of loan that rolls several unsecured debts into one single bill. Debt settlement means you hire a company to negotiate a lump-sum payment with your creditors for less than what you owe.Once their fee is accounted for, they promise to negotiate with your creditors and settle your debts. Well, the debt settlement companies usually don’t deliver on helping you with your debt after they take your money.

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