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Answer by CatDad
A real consolidation loan is where you get a loan from a bank and use that to pay off your cards at a lower rate. You need to have an adequate income and credit rating to do this.
There are non profit debt management programs (these are not loans) where you can pay your debts backs at a lower rate and interest. NFCC is a non profit organization that was set up by the credit card industry to offer assistance to people who are struggling to pay their credit card debt…and who may by considering filing for bankruptcy. They can offer reduced payments and interest (but NOT settlements for less). http://www.nfcc.org –
This is a good program if you are just at the point of getting over your head with debt. If your cards are near/at or past the point of default, then you are far better off trying to negotiate settlements directly with your creditors…assuming you have the money up front to settle in the 25 – 50% range.
Stay away from any debt consolidation firm that promises to cut your debt and payments in half. These firms work by having you deliberately default on your credit cards to settle for half. This is a risky process and your creditors might respond by taking you to court to get a judgment.
Best answer from question by JAYFO’LIFE:
Answer by Rebecca
I’ve used Consolidated Credit Counseling and have had a good experience with them.