Debt Consolidation Services - Pennsylvania

Finding a proven way to get relief from debts is a concern of many Americans these days and often includes the possibility of using debt consolidation services. Regardless of the reasons why people are in debt, it remains an issue that simply won't just go away on its own.

If you are also in a situation where you are falling several months behind on your credit card payments, as well struggling with other types of unsecured debts - such as medical bills, utilities, or retail store charges - you may be interested in finding out how debt consolidation services might be able to help.

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Debt consolidation through credit counseling services allows you to take multiple credit card and unsecured debts and then combine them into a single, more structured, and simpler-to-manage monthly payment. The goal is, with a more structured and more affordable repayment plan, you can ideally reduce your debts sooner than if you only continued to make the minimum payments at higher interest rates.

In addition, many consumers consider debt consolidation to be a popular alternative to bankruptcy, which is also a form of debt relief, but one that has a more damaging and longer lasting consequence on personal credit.

Understanding Debt Consolidation

Debt consolidation through credit counseling, or what is also referred to as a debt management plan (DMP), is a proven and legal way for many consumers to get relief from credit card debts and other types of unsecured debts. Before choosing a credit counseling service, it is wise to have a good understanding of how it works, and how it can potentially help you reduce the total amount of your credit card and unsecured debts.

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Facilitated by credit counselors, debt consolidation generally begins with a thorough assessment of your financial situation - taking into account your income, financial obligations, and other assets. Once credit counselors determine how much you can reasonably allocate to paying off your debts, they will generally submit proposals to credit card companies, on your behalf, requesting lower interest rates and the waiving of late fees and penalties. Creditors that accept the proposals are added to the debt management plan. Credit counseling agencies, in turn, distribute those funds to creditors that are in the plan.

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Do Debt Consolidation Loans Offer Similar Benefits?

These days, many consumers in Pennsylvania and elsewhere apply for debt consolidation loans to help pay off their credit card debts and other types of unsecured debts (such as medical bills, retail store charges, or even utilities). The goal of this form of debt relief is to combine high-interest credit card and unsecured debts into one, lower interest loan. However, debt consolidation loans pose certain risks, particularly to one's credit:

A debt consolidation loan involves taking unsecured debt and paying it off with funds that come by way of a "secured" loan. This means it is generally a loan where you would have typically put up your home or other asset to get approved. If, for any reason, you struggle or even fail to make your loan payment, you would have essentially put your home at risk. Also, in many cases, consumers who get a debt consolidation loan generally end up using their credit cards again and start accumulating new charges.

As a result, many of them will have new, high-interest credit card debts to deal with on top of their loan. Under this scenario, a debt consolidation loan has generally made their debt situation go from bad to worse.

That's why in comparing debt consolidation through credit counseling versus just taking out a new loan, for many people, credit counseling is preferable as it provides them a more structured and easier payment plan - and one that doesn't involve taking on a new loan.

Get a New Lease on Life

If you are overwhelmed with credit card and unsecured debts, there is generally no need to panic or resort to drastic options like bankruptcy because you have several debt relief options available. Keep in mind that because every individual's debt situation is different, it is a smart move to compare and contrast all your debt relief options, and do your due diligence when selecting a company to work with.

It may also be a good time to reevaluate your spending habits and start making small lifestyle changes - for instance, foregoing that $4 daily cappuccino run in place of brewing your own cup - that can add up to savings in the long run.

The bottom line is, there is help available for you whether you choose a debt consolidation service or another debt relief option. If you want to take the next step in regaining control of your finances. Make the smart move and request a free debt relief estimate and savings analysis - today.