Debt Consolidation Myths: Do Not Be Fooled

Debt consolidation is one of the debt relief options that has a high failure rate. That is not to say that the concept is all wrong to effectively get out of debt. On the contrary, the concept of combining your debts into one payment scheme makes a lot of sense. It allows you to focus on one payment month on month so you are relieved of the stress of handling too many creditors. The stress relief allows you to exhaust your efforts in earning more to grow your payment fund.

However, the statistics show that not everyone enjoys that scenario. One of the main reasons is they approach this debt relief option the wrong way. They make the wrong assumptions based on myths that leads them to make equally wrong decisions.

To help you get financial freedom through debt consolidation, here are the common myths that people wrongly assume about this debt relief option.

Myth 1: All debt situations can be solved through debt consolidation.
Fact: While all debt relief options are effective, they are only suited for a particular debt situation. If you want to utilize debt consolidation, you need to know the right type of financial capability and debt scenario to know if it is the right option for you.

Myth 2: All debt consolidation payment plans are the same.
Fact: In essence and concept, this is true. But in detail, it is not. The payment plan of another may not work for your own. This is why hiring a professional to help you with a debt management plan or DMP is necessary. You need their input to make sure your payment scheme is right for your financial capabilities. A plan that you cannot afford will not do you any good.

Myth 3: All debt consolidation loans need a collateral.
Fact: Not all debt consolidation loans are secured. You can avail of an unsecured loan but you need to have a good credit score to be able to achieve your debt relief goals.

Myth 4: You need to have a good credit score in all types of debt consolidation program/loan.
Fact: It can certainly help your case but it is not a strict requirement. You can avail of this but you may have to put up a collateral to enjoy it.

Myth 5: Loans are the best way to solve your credit problems.
Fact: It is the best option, but not for all types of debts. You need to know when it is the right solution, otherwise, you may end up getting yourself deeper into debt.

Click Here to know more about the different types of debt consolidation programs. Give National Debt Relief a call so one of our agents can provide insight on how you can use this debt relief option to achieve financial freedom.