Consolidating Your Debt for Free

Our thoughts about money are beginning to change. Free Credit card debt consolidation and dealing strictly in cash are two of the new the most common changes that people are making. Making your own debt management plan is your plan is going to be the only truly free method of debt repayment.

A debt consolidation loan will require you to pay closing costs, but you may be able to have them added to your loan. But, if you have debt it is not in best interest to payoff debt with debt. Most debt consolidation loans are secured with your home. Defaulting on the loan can lead fo foreclosure proceedings. If you look at the recent economy, taking out a home equity loan a few years ago may have put you upside down in your home loan. This is not a comfortable position.

A debt settlement company will charge you based on the amount of money they are able to save you on your credit card balance. The fee usually ranges from 15%-25%. So, if they save you $2,000, you will be paying from $300-$500 for this service with a net savings of $1,500-$1,700. But here is the disadvantage. You will have to pay taxes on that same amount and this transaction will not be reported favorably on your credit.

Credit counseling service is another option you have and for most people that want help managing their debt this alternative is best. You wiil see an interest rate reduction that will be under 10%. If you are currently paying over 20%, this is huge and will save you thousands of dollars and several years. Get onto any credit debt calculator and you will be amazed at what an interest rate reduction can save you. The cost of this service normaly varies from $30-$50 a month. One of the big advantages is making only monthly payment to make all of your credit card payments.

Although these are not free credit card debt consolidation options, they are going to cost you less than what you are paying now. Some debt relief methods are better than others and not all will work for all situations. It will depend on your personal debt situation which debt relief solution will work best for you.