Most often, the required collateral is a second mortgage or a home equity line of credit.
This is incredibly risky because if you cannot meet your payments, your home is on the line.
Debt Consolidation: Consolidation is the process of combining all your debts into a single, lower payment by taking out a loan to pay off your creditors.
Companies usually attempt to lower your debt through debt settlement before recommending you take out a loan.
Furthermore, if you have bad credit, debt consolidation loans may come with high interest rates.
In addition to putting your home at risk, many consumers end up prolonging their debt.
These debt relief programs don’t have a negative impact on your credit but may limit your credit options for their durations.
During this program, you receive financial counseling and meet with a financial advisor.Many of these options work hand in hand with or as part of a larger debt reduction program, but in general, these are your choices: Debt Settlement: Settlement is the process of negotiating with your creditors in hopes of reducing the total amount of debt you owe them.While you can undertake this process on your own, many people choose to hire a professional debt settlement company or lawyer to negotiate on their behalf.The goal of consolidation is to have a lower payment at a lower interest rate than you currently have.It can be confusing because debt consolidation is also used to refer to debt settlement programs as well.