Debt Consolidation Counseling
Debt consolidation counseling can be given in a variety of ways by a plethora of qualified organizations that assess an individual's previous and current financial situation in hopes to create a solution to relieve that individual of debt. A debt consolidation counselor can provide the much needed help for Americans today as a result of the surpassing 2 trillion dollars in consumer debt. This equates to over $18,000 of debt per American household (not including mortgages). Debt consolidation counseling can relieve the monthly burden of debt and let the debtor keep a larger portion of his/her income.
Debt consolidation counseling is the result of a debtor attempting to qualify for a debt consolidation loan. While many lenders will lend money for any reason to a homeowner with equity, a debt consolidation loan is a specific loan in which funds are directly dispersed to the creditor to pay off the balances. The resonating behind providing debt consolidation counseling is to educate the debtor on the important ramifications of accumulating debt, and how to avoid it in the future. A debt consolidation counselor will work with a debtor to create a livable lifestyle budget to follow.
If the debtor makes a commitment to follow the newly created budget, and has completed the required debt consolidation counseling sessions, he/she may be approved for the loan. It is important to note that debt consolidation counseling pertains to keeping the debtor out of debt in the future, and that the consolidation loan, is a loan, and monthly payments for an extended period of time are required. Usually debt consolidation loans carry a lower interest rate than that of traditional loans or credit card accounts. A debt consolidation counselor will encourage this method because it is a perk for those who are serious about getting out of debt.