Choosing Between Debt Consolidation Options

When most of us finally decide that we want to get out of debt, the first thing many of us think about is “debt consolidation.”  However, with the many different companies and services promising to help us, this can be a very confusing option for us.  There are actually several different ways to consolidate your debt, and each of these debt consolidation options comes with it’s own pros and cons.

With that in mine, I thought I’d help spell out and explain some of the various options for consolidating debt.  It is important to remember that each situation is different, so debt reduction strategies that are best for one person may not be the best option for you.

Home Equity Loans and Refinancing

Before the recent housing and credit crisis, refinancing and/or taking out a home equity loan (also sometimes referred to as a second mortgage) was one of the most common ways to consolidate and reduce debt.  The benefits of this method were pretty obvious.

Rolling debt into a home equity loan, or refinancing and using home equity to pay off debt, usually results in lower interest rates and lower monthly payments overall.  For people on a tight budget, this often seemed like a great idea. However, as the recent housing and economic collapse proved, there were some drawbacks that many people did not consider.

The biggest drawback to this option is that it turns your unsecured debt into a debt that is secured by your home.  In other words, with this type of unsecured credit card debt consolidation you are now at risk of losing your home if you cannot pay off the debt, where before your home was not at risk.

Another thing that few people consider is that, despite the lower payments and interest rates, many people actually pay more money in the long run.  The payments on these loans can be stretched out over as much as 30 years if you refinance your home, meaning you could still pay more money in interest than you would have.

Balance Transfers, Unsecured Loans

Another commonly used option is transferring balances to a credit card or using an unsecured loan.  These basically amount to the same thing, since unsecured loans are practically the same as credit cards in terms of interest rates and payments, and both are unsecured.

These may be convenient and simple options for many, and if you can find a loan or card with a fixed, low rate and with low or no balance transfer fees, then this could be a great option for you.  Unfortunately, it’s not always so simple.

Most credit cards advertise low teaser interest rates that go up after 6 months or a year.  Most people will not pay off the debt that quickly.  If you have to pay balance transfer fees on top of that, then you may be worse off than you were originally.

The biggest problem with this option is that many people are unable to qualify for a low enough rate for the long term or, if they can, they aren’t granted enough credit to consolidate all of their debt.

Other Consolidation Options

Many people looking to consolidate unwittingly get roped in by debt negotiation services.  We have covered how these debt negotiators operate in several other articles, but for now all I will say is that this is NOT a real consolidation option.  If you are considering this option, you should first research debt settlement pros and cons so that you at least know what you are getting in to.

Another possible debt reduction plan that might be considered is a debt management plan.  This is also not a true consolidation, but it does offer one consolidated, lower monthly payment as well as lower interest rates.  These plans are also not for everyone, and you should first speak with a qualified, accredited credit counselor before considering this.

You can also look into local options for help, such as Ohio debt consolidation for residents of Ohio.

This entry was postedon Friday, August 13th, 2010 at 3:24 pmand is filed under Tags: credit counseling, debt consolidation, debt reduction plan, debt settlement, pros and cons.You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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Ohio Debt Consolidation and Reduction

Are you looking for help with debt reduction or debt consolidation in Ohio? We can help you find the best, most trustworthy companies to help you consolidate and reduce debt.

From Akron to Zanesville, and everywhere in between, find out where to get the help you need. These debt reduction programs can help you get lower monthly payments, lower interest rates, get rid of fees, and get you out of debt fast.

Of course, a lot of companies make claims that sound great but don’t actually do much to help you out.  In fact, many such companies are outright scams and can leave you in even more trouble than you started in.

It is important to find a reliable, non profit company with accredited financial counselors you can trust.  And the “counselor” you speak to should be an actual counselor and not a glorified sales person!

There are literally hundreds of companies spread throughout the cities and towns of Ohio that will consolidate your debt.  However, we know that choosing one you can trust can be very difficult.  

Many people simply give up and do nothing because they are paralyzed by the fear of falling victim to scams or are confused by all of their different debt consolidation options.  But we are here to make all of that easier for you.

For residents anywhere in Ohio looking to consolidate debt or get help reducing debt, we recommend Vision Credit Education, Inc. Vision Credit is a non profit agency that has been in business since 2004 and has helped thousands of consumers successfully get out of debt. You can contact them at:

Vision Credit Education, Inc.1-800-379-4720

Vision can help you whether you are in Columbus, Cincinnati, Cleveland, or any where else in the state.  They have knowledgeable and very helpful counselors who don’t try to sell you on any one single option.

There are also many other agencies in Ohio that work with debt consolidation and credit counseling.  While I don’t have any personal experience with the following companies, they are all non profit and members of the NFCC.

Keep in mind, however, that I am not recommending any of the following organizations.  They are listed here for informational purposes.

Ohio Credit Counseling Agencies

CCCS of Northeastern Ohio
Akron, OH 44320

Family and Community Services, Inc. Credit Counseling
Akron, OH 44304

CCCS of Northeastern Ohio
Alliance, OH 44601

CCCS of Ashtabula County
Ashtabula, OH 44004

CCCS of the Mid-Ohio Valley
Athens, OH 45701

CCCS of Greater Cincinnati, Inc.
Batavia, OH 45103

CCCS of Northeastern Ohio
Beachwood, OH 44122

CCCS of Northeastern Ohio
Boardman, OH 44512

CCCS of Northeastern Ohio
Canton, OH 44714

CCCS of Family & Community Services, Inc.
Chagrin Falls, OH 44023

CCCS of Greater Cincinnati
Cincinnati, OH 45251

CCCS of Greater Cincinnati, Inc.
Cincinnati, OH 45242

CCCS of Northeastern Ohio
Cleveland, OH 44115

CCCS of Central Ohio, Inc.
Columbus, OH 43213

CCCS of Central Ohio, Inc.
Columbus, OH 43228

CCCS of the Miami Valley(Sponsored By Graceworks Lutheran Services)
Dayton, OH 45439-2284

CCCS of Central Ohio, Inc.
Delaware, OH 43015

CCCS of Family & Community Services, Inc.
East Liverpool, OH 43920

CCCS of Family & Community Services, Inc.
East Palestine, OH 44413

CCCS of Lima
Findlay, OH 45840

CCCS of Central Ohio, Inc.
Grove City, OH 43123

LifeSpan Credit Counseling, Consumer Credit Counseling Service
Hamilton, OH 45011-1966

CCCS of Lima
Lima, OH 45801

CCCS of Columbiana County
Lisbon, OH 44432

CCCS of Central Ohio, Inc.
Mansfield, OH 44903

CCCS of Central Ohio, Inc.
Marysville, OH 43040

CCCS of Greater Cincinnati
Mason, OH 45040

LifeSpan Credit Counseling, Consumer Credit Counseling Service
Mason, OH 45040

CCCS of Northeastern Ohio
Medina, OH 44256

Family and Community Services, Inc. Credit Counseling
Medina, OH 44256-9626

CCCS of Northeastern Ohio
Mentor, OH 44060

LifeSpan Credit Counseling, Consumer Credit Counseling Service
Middletown, OH 45042

CCCS of Family & Community Services, Inc.
New Philadelphia, OH 44663

CCCS of Central Ohio, Inc.
Newark, OH 43055-5584

CCCS of Northeastern Ohio
Parma, OH 44129

CCCS of Family & Community Services, Inc.
Ravenna, OH 44266

CCCS of Northeast Ohio
Rocky River, OH 44116

CCCS of Family & Community Services, Inc.
Salem, OH 44460

CCCS of Northwest Ohio
Sandusky, OH 44870-5548

CCCS of the Miami Valley (Sponsored By Graceworks Lutheran Services)
Sidney, OH 45365

CCCS of the Miami Valley (Sponsored By Graceworks Lutheran Services)
Springfield, OH 45504

Midwest Credit Counseling
Steubenville, OH 43952

Midwest Credit Counseling
Streetsboro, OH 44241-5365

CCCS of Northwest Ohio
Toledo, OH 43615

CCCS of Northeastern Ohio
Warren, OH 44483

CCCS of Family & Community Services, Inc.
Wooster, OH 44691-4373

CCCS of Central Ohio, Inc.
Zanesville, OH 43701

This entry was postedon Thursday, September 16th, 2010 at 12:22 pmand is filed under Tags: credit counseling, debt consolidation ohio, debt reduction, ohio debt consolidation, Ohio Debt Reduction.You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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