• What is Debt Consolidation?
  Learn how debt consolidation works to reduce interest rates and save money.
• What Can Be Consolidated?
  Types of high-interest debts commonly used.
• What is Debt Settlement?
  Often confused with, but significantly different than consolidating.
• What Debts Can Be Settled?
  Learn what kind of creditors that will often settle for less.
• How Do Bankruptcies Work?
  How Chapter 7 and Chapter 13 bankruptcies work, and the aftermath on your credit report.

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What is Debt Consolidation?

Debt consolidation usually works the best when consolidating unsecured debt, like credit cards and medical bills. Secured loans will more often than not carry the lowest rate, leading to the greatest savings for the person(s) consolidating. That said, there still are debt services available for individuals that do not have the collateral to get a secured loan, although the interest savings might not be quite as good because the interest rate on the consolidated loan will be slightly higher.

While consolidation need not be handled by another party (other than a new loan provider), you may want to deal with a debt company that offers full debt management programs, and normally people decide to enroll in such a service rather than take the task on alone as it can be a little overwhelming.

Although select debt consolidation organizations may really lower your debt burden by reducing the amount owed to your creditors, this is in reality debt negotiation or settlement, regardless of the fact people frequently call them both consolidation.

If you're currently paying high-interest on multiple accounts, things like credit cards, medical bills or most any additional unsecured debts; consolidating your debts is probably a smart option for you. Dropped interest rates will allow you to minimize your overall payments while paying down your debt faster.