mpowered

Even with the best-laid plans and intentions, you can experience financial problems. Perhaps you, or someone close to you, has been laid-off from a job, is undergoing expensive medical treatment, had a marriage or relationship end, or closed a business. These issues, as well as many others, can led to financial problems.
 
You may want to consider taking out a consolidation loan to help you get back on your feet. However, before you borrow money to consolidate debt and pay off credit cards, you should consider what action you are going to take to make sure that the problem does not occur again. Unfortunately, many people who consolidate credit card debt find themselves in the same situation four or five years later because they fail to change their spending habits. If you are going to use a consolidation loan to pay off credit cards debt, destroy all but one or two of your cards so you don't find yourself in this situation again.
 
As an alternative to a loan, consolidating your credit card, collection accounts or medical debt in a Debt Management Plan (DMP) may make the most sense for you or someone you know. The benefits include a lowered minimum monthly payment (which may free up cash on a monthly basis), a lowered interest rate (to save money while you pay off your debt), and one convenient payment per month instead of multiple payments to many different creditors. A DMP is also considered a non-permanent mark on your credit history (as opposed to filing for bankruptcy), so your credit rating remains strong and robust or in some cases, improves, as you pay down your debt.
 
Another type of loan to consider consolidating are student loans. Most student loans, even those that were previously with private lenders, are now serviced by the Direct Loan program, a division of the United States Department of Education. If you have more than one student loan or if you have variable interest rates on your student loans, you may want to consider if loan consolidation is right for you.  Loan consolidation enables you to combine your variable and/or fixed interest rate loans into a fixed interest rate loan with extended repayment terms. Benefits include: No minimum balance requirements, reduced monthly payments, flexible payment options, ability to retain Federal benefits such as deferment and forbearance, no prepayment penalties, and one-stop customer service assistance with all your student loan financial needs.