Reconsolidating car loans
Even though the debt consolidation company will be making payments on your behalf, you will still be responsible for ensuring those payments are made to your creditors on time.
If the debt consolidation company fails to make a payment on time, the late payment will be reflected on your credit report.
It can also make it less likely that you will fall behind on your payments and risk harming your credit.
For these reasons, taking out a personal loan to consolidate higher interest debt can often be very beneficial.
The second type of debt consolidation you may hear about are debt management plans offered by debt settlement companies.
With these programs, the debt settlement company may be able to secure lower monthly payments with your creditors by negotiating a reduced balance on your accounts.
Since the interest rate on a personal loan is often considerably lower than on a credit card, and the repayment term potentially much longer, the consolidated payment may be much lower, as you indicated.
If you are struggling to keep up with your monthly payments, consolidating your debt in this way can certainly help alleviate financial stress.
Missing just one credit card payment could damage your credit score and add interest to your monthly payment. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free. Our partners cannot pay us to guarantee favorable reviews of their products or services. " At Nerd Wallet, we strive to help you make financial decisions with confidence. There are two types of student loan consolidation: federal and private. We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research.To do this, many or all of the products featured here are from our partners. Private consolidation is often referred to as refinancing.These processes are often confused, but they’re very different. refinancing Private student loan consolidation, or refinancing, means replacing multiple student loans — private, federal or a combination of the two — with a single, new, private loan.