Debt Consolidation Attorney
Debt consolidation refers to the act of taking out a new loan to pay off other liabilities and consumer debts. Multiple debts are combined into a single, larger debt, such as a loan, typically with more favorable payoff terms-- a reduced interest rate, lower monthly payment, or both. Debt consolidation can be used as a resource to handle student loan debt, credit card debt, and other liabilities.
How Debt Consolidation Works
Debt consolidation is the process of using various kinds of financing to pay off other debts and liabilities. If you are saddled with various kinds of debt, you can request a loan to consolidate those debts into a single liability and pay them off. Payments are then made on the new debt until it is repaid in full.
Most people apply via their bank, credit union, or credit card provider for a debt consolidation loan as their first step. It's a good place to start, particularly if you have a great relationship and payment history with your institution. If you're denied, try exploring private mortgage companies or lenders.
Lenders are willing to do this for a number of reasons. Debt consolidation increases the probability of collecting from a debtor. These loans are generally offered by financial institutions such as banks and credit unions, however there are various other specialized debt consolidation service companies that provide these services to the public.
An important point to keep in mind is that debt consolidation loans do not erase the original debt. Rather, they just transfer a consumer's loans to a different lender or kind of loan. For actual debt relief or for those that do not qualify for loans, it might be best to consider a debt settlement rather than, or in addition to, a debt consolidation loan.
For more information about a Debt Consolidation Attorney in Tustin, California, contact Thomas K. McKnight LLP at (800) 466-7507 or visit our website at TKMLLP.Com for a free consultation!