Is using a debt consolidator a wise choice?
Posted by Financial Advisor | Filed under Debt, Loans & Mortgages
Has anyone had any negative or positive results from using a debt consolidator?
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Posted by Financial Advisor | Filed under Debt, Loans & Mortgages
Has anyone had any negative or positive results from using a debt consolidator?
With a debt consolidator, you are borrowing more money to pay off what you already owe. With Debt Consolidation, you pay back all of your debt balances but pay a hefty fee for the consolidation loan, plus their fees to process the loan.
Even though your debts get paid all at once, you still owe the same amount, only now you also owe them. All of which means that your credit score will not change because your total debt owed has increased and you are now using 100% of your available credit (the consolidation loan).
You might want to look into Debt Settlement, this is where you pay back a lower amount (usually around 50%) while the creditor agrees to forgive the remaining balance.
Hope this answers your question.