What Does It Mean to Consolidate Debt and How Do I Begin the Process?

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If you will have a large amount of money that you owe you no doubt have begun exploring strategies to get out from under this excessive debt load. One thing you may have considered is to consolidate debt. But what does it mean to do this and how you begin the process of consolidation.

There are really two ways to consolidate debt. The first is to obtain some kind of loan. To begin this process you must find a company which offers loans for the purpose of consolidation of debt. These are specialized lending companies which understand the circumstances of those who require this type of service and typically will understand how to reach out to your creditors in order to include them in your consolidation plan. Once you are approved for one of these services they will attempt to speak to your creditors in order to pay them in part or full and include all of this amount which they had paid on your behalf in your new loan which you owe to them.

The second way in which you can consolidate debt is by going through a service which does not in fact lend you money simply works as a go between for you and your creditors. So for example if you owe $ 1000 each to three separate credit cards then this service would send you a bill for the minimum amount owed for these cards which would pay them and they would in turn pay those credit card agencies. This is more of a service to help you stay organized and to not feel overwhelmed by a large volume of people to whome you owe money.

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Source by Tuesdaydee Hasson

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