Janet Williams asked:


According to wordtracker, 1819 searches are made per day for the word debt consolidation while debt settlement or debt relief makes only 300 search counts per day. Do you think that all these people who are searching for this word actually want to do debt consolidation? My experience says that most of them want a debt solution. People feel that debt consolidation is the most commonly accepted debt solution.

Is the word debt consolidation misinterpreted?

If we look at Debt Consolidation Care some new members feel debt consolidation is all about settling debts, some feel it is about getting counseling and some feel it is about managing the whole debt. Some even feel it is about doing everything together to settle debts. Consolidation is “The act of combining into an integral whole”, so debt consolidation should be “The act of combining all fragmented debts into an integral whole”. There are different ways of debt consolidation; however, the most common way of merging all the debts is by taking another loan.

Is debt consolidation different from debt consolidation loan?

Yes, it is. Even Wikipedia confuses between “debt consolidation” and “debt consolidation loan”. Debt consolidation loan is about taking a new loan to repay your entire fragmented loan. This can:-



Make debts more manageable.

Sometimes reduce the average interest rate paid on fragmented debts.

Further reduce the average interest paid on fragmented debts if a bigger secured debt (like home equity loan, which will offer much lower interest rate) is used to pay unsecured debts.


Debt consolidation loan is a kind of debt consolidation. Sometimes taking a huge loan to repay your other loans is not advisable. In the absence of collateral attachments, it is seen that many reliable creditors refuse to offer a huge loan package at lower rates.

From a customer’s point of view, it is basically consolidating many monthly payments to one in a smarter way to save more and pay faster. This can be done even without taking a loan by using debt management program, which is again widely perceived as debt consolidation, as monthly payments are consolidated to one. Next section of the article will explain it further.

Why everything is perceived as debt consolidation?

What customer sees is one big monthly payment, which might be used by a law firm under different schemes to settle debts.

A law firm may use the money for an account basis suited solution, which may include:-



Debt Settlement: One account may go for debt settlement, so the company may sometimes accumulate the monthly payments to offer a lump sum.

Debt Consolidation Loan: Another account may be paid off using another loan.



So the perceived debt consolidation includes:-



Consolidating monthly payments to one.

Debt settlement.

Debt negotiation with the creditors.

Credit counseling.

Debt consolidation loan.

Debt management.

Debt portfolio.

Asset portfolio.

Budgeting.



When nothing works out the law firm helps the customer file a suited bankruptcy. Next time when you hear “debt consolidation”, remember it can be a perceived word for a mix of debt solutions.

Julian Lim asked:




A consumer debt consolidation loan can be valuable for any of several reasons.  If you have consumer debt, such as a credit card balance, or department store balances that are out of hand, you may want to be in the market for one of these consolidation loans for your debt.  Obtaining such a loan will help you to get a fresh financial start, but it can be good for various other reasons as well. There is no question but that debt reduction is the best way to get a new start.  Many people are looking at the following scenarios and making the choice to reduce their debt load for the future.

Pay Off Debts

A consumer debt consolidation loan is often selected for the purpose of paying off the debts that have accrued and that may have gotten out of hand. When you consolidate the loans, it puts you in a position of reducing your debt load. With tightening credit limits, this will be a wise action to take for your financial future health. In fact, if credit limits continue to shrink, it may no longer be a voluntary action. reducing your debt load by paying off the debts quickly is a wise financial move.

Reduce Your Costs

Why should you take out a consumer debt consolidation loan?  One major reason is that you will reduce your total debt service costs in almost every instance. Reducing costs is the result of paying less interest, as well as paying for a shorter period of time. You may even be able to get a better rate because taking out such a loan indicates your willingness to take control of you finances. With a consolidation loan, you eliminate fees, overdraft charges and higher interest rates. These are always positive benefits from this type of loan.

Start a New Credit Philosophy

One of the benefits that is realized when you take out a consumer debt consolidation loan is that of the chance to start over.  You can take what you have learned and turn your financial life and habits in a brand new direction that is much improved over the previous practices. Hopefully your new practices in the area of financial arrangements will result in a situation where your bills get paid and you are actively working to reduce your outstanding debt through paying off the bills. The consolidation loan is just one step in the process of improving your credit picture.

Focus your Payments

When you choose to use a consumer debt consolidation loan in an effort to improve your entire financial picture is a smart move.  One of the benefits in this type of loan is when it is used to focus your payments. Instead of making several small payments to various payment sources you can focus your payments and only make a single payment that doesn’t vary from month to month. This helps you to budget your money better and never have problems with forgetting a payment or wondering what the payment amount will be this month.  

Vivian Villalba asked:


If you own a small business sometimes the debt of that business is not that small. Your expenditures may have over run your profit and you may need a loan to tide you over until the black overtakes the red in your accounting book. The need to for a debt consolidation loan in for your small business may stem from the amount of paperwork that follows your debt when you pay your bills. If you consolidate all of your debt and pay only one company, your paper work will be less and you will be able to spend your time making money instead worrying about countless bills.

A good strategy to find a small business debt consolidation loan is to search online. Though there might be loan offices in your town, you will have a better chance at getting a lower rate from the multitude of small loan consolidation companies that are on the internet. There are search engines available that will let the banks and credit card companies fight for a chance to serve you. You put in the amount that you want to consolidate and the banks and credit card companies will bid for your business. After a couple of days simply click on the offers and pick out the best loan rates that fit your budget and your needs.

All banks offer business consolidation loans. You may have a local bank that you have borrowed from in the past. This would be beneficial if you already have a relationship with an institution. They will already have your paperwork on file and your small business dept consolidation loan will be processed in no time. If you have had similar loans in the past and have kept up on them, there is no reason that your local institution cannot handle the loan. If you feel the interest rate is too high, you should shop around. The hassle of filling out paperwork should overcome the hassle of having to pay a higher interest rate the entire length of the loan.

The small business debt consolidation loan will help you manage your finances more securely and faster. Imagine paying only one bill instead of twenty. You will need a list of all your debt and contact information from your debtors. The bank that you pick will add the numbers and give you a grand total and your monthly bill so that it is sent all in one package. Your monthly bill will seem exorbitant, but remember that this is one of the few bills you will receive. You can make sure that payment is made and you can rest assured that you have not forgotten a debtor and ended up on a collections list.

Small business debt consolidation loans are the best way to manage your finances and at the same time they save you time. When you sit down at the end of the month it will be faster to just write one check, use one stamp, and send one bill to the consolidator. That is all there is to it. So if you are suffering from a paper work nightmare, apply for a small business debt consolidation loan today.