Key takeaways. Debt consolidation puts multiple debts into a single account to make your payments easier to manage. Consolidating debts may temporarily reduce your credit score, but your score will improve over time as long as you make payments on schedule.
When it comes to credit card debt relief, it's important to dispel a common misconception: There are no government-sponsored programs specifically designed to eliminate credit card debt. So, you should be wary of any offers claiming to represent such government initiatives, as they may be misleading or fraudulent.
Debt consolidation can be a useful financial tool for anyone with multiple debts. It can help you simplify your finances and reduce your interest costs and monthly payments.
Will your program impact my credit score? Depending on your personal situation and whether you have already missed payments to your creditors, debt settlement programs may have a negative impact on your credit score.
A steady income
A stable income is crucial for qualifying for a debt consolidation program. Lenders need assurance that you can commit to regular monthly payments throughout the term of the loan. As a result, you'll likely need to verify your income by providing recent pay stubs, tax returns or bank statements.
Yes, you can technically continue using your credit cards after debt consolidation as long as you keep the accounts open during the process. That said, whether you still have access to your credit card accounts post-consolidation may depend on a few different factors.
National Debt Relief is a legitimate company providing debt relief services. The company was founded in 2009 and is a member of the American Association for Debt Resolution (AADR). It's certified by the International Association of Professional Debt Arbitrators (IAPDA), and is accredited by the BBB.
Debt consolidation is almost always the better choice. Debt consolidation doesn't change how much you owe, but you might save by getting a lower interest rate. However, you usually need at least good credit for this tactic to work. On the flipside, you could get some of your debt forgiven with debt settlement.
Freedom Debt Relief is a legitimate debt settlement company founded in 2002. It's accredited by the Better Business Bureau (BBB) with an A+ rating and holds an accreditation from the American Association for Debt Resolution (AADR).
National Debt Relief provides the most comprehensive debt relief tools of any company Bankrate reviewed. In addition to its Whole Human Finance debt relief program, it offers credit counseling, bankruptcy guidance and even debt consolidation loan options through partners.
Updated September 5, 2019 — The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.
You'll typically need a credit score of at least 700 to qualify for a debt consolidation loan with a competitive interest rate. However, a lower credit score doesn't automatically equal a denial, as some lenders offer loans for bad credit.
Banks, credit unions, and installment loan lenders may offer debt consolidation loans. These loans convert many of your debts into one loan payment, simplifying how many payments you have to make. These offers also might be for lower interest rates than what you're currently paying.
Hardship programs are nearly identical to the debt management programs offered by nonprofit credit card agencies like InCharge Debt Solutions. Both programs make it easier to afford the monthly payments by lowering interest rates and eliminating fees.
National Debt Relief is for consumers with over $7,500 in unsecured debt, who have exhausted all other debt-relief options apart from bankruptcy. If you don't settle the debt, you will continue paying late fees and racking up interest as your credit score plummets.
Keep in mind that the government doesn't offer grants to help Americans pay off consumer debt from things like credit cards. It does, however, offer financial support for Americans struggling with a range of tough financial situations.