If you're in debt and looking for relief, it might seem logical to consider a loan, a personal loan, debt consolidation loan, signature loan, unsecured loan, or even a bad credit loan. However, it's important to remember that a personal loan, and any other debt consolidation loans, may actually cause your situation to go from bad to worse! Debt settlement is actually the better "first step" towards lowering your payments and getting out from under a financial burden.
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Sure, when you're facing what may feel like a mountain of growing credit card debts, medical bills, legal bills, tax debts, collections, and other unsecured debts a loan might seem like it can provide some welcome relief. But keep in mind, if your credit is less than perfect, any personal loan you'll be offered will have a very high interest rate that could further strain your finances, not to mention other poor terms like extensions on the loan to keep you paying longer, or other fees that keep your loan balance high.
It's also good to remember that when you use a debt consolidation loan, which will typically be based on a home or asset as collateral, you risk losing your home if you fail to live up to the term of your loan agreement.
Debt Management Plans and Debt Settlement
This is why a debt management plan through a credit counseling agency or debt settlement may be a much better alternative to personal loans or consolidation loans to handle your debts. Through debt management you may be able to pay back your debt honorably, just at lower interest rates. Through debt settlement you may be able to lower your monthly payments and your overall credit card debt dramatically, without having to take out more loans and risk further financial endangerment.
Remember, unless you have the financial discipline to avoid falling into credit card debt once again, it's wise to avoid any personal loans or debt consolidation loans that "trade" unsecured debt for debt secured by your home or other asset. Instead, consider debt management or debt settlement as debt relief options that may help you get out of debt without risking your assets or falling deeper into debt.
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