What is debt consolidation?
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Debt consolidation is the process of consolidating all your debts into one payment. The benefits of debt consolidation are you get to pay a lower interest rate, you get more time to pay your bills, you can get some fees waived or reduced, you can get debt collection calls reduced.
When you have a lower interest rate on your debts, you can start paying off the principal instead of paying off more and more interest.
You can consolidate your debts with a credit card, a debt consolidation loan, a personal loan, a home equity loan, or borrow from a friend or family member and pay them a lower interest rate than what you were paying on your cards.
You will have a lower credit score and credit rating because you are having help with your debts.
Once your cards and debts are paid off this negative rating will go away and you can start rebuilding your credit.
Debt consolidation is a good option for people who do not want to file bankruptcy or use debt settlement. You can use it if you need a little help with managing your debts.