The answer can be found with student loan consolidation.  This is a fixed-rate refinancing program that will help you by combining all of your existing federal or private loans into one new loan.  You can manage your finances better, get immediate payment relief and experience long term benefits, such as:

• Lower monthly student loan payments
• Easier handling, with only one payment to make
• No credit checks, fees or application charges
• Possible reduction of your interest rate by consolidating during the grace period

If you are a college student or graduate that has several student loans, the consolidation program offers an option that will make repayment easier.  Doing your homework beforehand will help you to understand the basics regarding consolidation and make the whole process go a little smoother.

What Does The Student Loan Consolidation Program Do?

Let’s start with an example:  A student, “Jane”, has three separate government loans that she is currently making payments on.  The consolidation program would allow Jane to borrow an amount of money that would combine all three outstanding loans into one.  In essence, all three loans would be considered paid off and a new loan would begin in their place.

3 Main Benefits Of The Consolidation Program

1. 1. Convenience – The students that have several loans will also have to make several payments every month.  This can get confusing with differing due dates to stay on top of and involves more paperwork.  The chance that a payment may get missed increases.  When you consolidate, there is only one payment and one due date to keep track of, which is much more convenient.
2. 2. Save Money – With several outstanding loans, the separate payments are often higher than the consolidated payment.  Let’s say that Jane (from our example above) has three payments of about $120 each.  That means she pays $360 per month towards the loans.  After consolidation, let’s say that the one required payment comes to $250.  That’s a savings of $110 per month that can be used for other expenses as the student begins his or her career!
3. 3. Choices – When students consolidate their loans, there are other opportunities that may become available.  It’s possible that new deferment choices as well as new repayment possibilities come open.  For students that are looking to continue their educations, or are struggling to find a job or are even struggling financially, these added choices can make a big difference.

Whether private or federal, it is in your best interest to investigate student loan consolidation programs if you have multiple loans.  They can lower your loan payments, reduce the stress and hassle of multiple payments and help you to budget your money more effectively.

What is Peer-To-Peer Lending?

Peer-to-peer lending is a new version of an older way to borrow and loan money. It has been considered a relatively safe way for people to help other people while gaining some interest on the loans. By eliminating the traditional lender (bank) people who may have difficulty securing funding can acquire personal loans which can be used for anything from buying a car to paying off debt. In short individuals looking to borrow money can do so from other individuals willing to loan money. Lenders are interested in helping others while gaining a higher return than simply stashing their money in a savings account. Borrowers are hoping to find approval for various financial goals without paying an arm and a leg due to high interest rates.

Who Qualifies for Peer-To-Peer Lending?

There is no one simple formula to determine whether or not you qualify for p2p lending. There are several different websites matching borrowers with lenders with each one having their own requirements and policies. Carefully review the qualifications of LendingClub, Prosper and other leading p2p lending sites before applying for a loan. This will save everyone time and energy by eliminating individuals who do not meet the minimum requirements. Understand that your credit will affect the interest rates offered if you qualify for a loan. Even though this is a personal loan not through a bank, your credit worthiness is still determined by your credit score and history. With that being said, you will more than likely find interest rates lower through p2p lending than if you were to qualify at a bank.

How Can Peer-To Peer Lending Help Eliminate Debt?

Basically, p2p lending can help consumers trying to pay off debt by providing a lump sum amount of money which can be used to pay off high interest credit card balances. If you handle this correctly, you could end up saving a lot of money by repaying a lower interest personal loan versus years of minimum payments on high interest credit cards. Similar to other methods of debt consolidation, it is imperative the borrower pay off the credit card debts and avoid racking up new debt. The point is to get out of debt, not move it around to new creditors. When debt consolidation is done correctly with the right terms and conditions, it can be a great way to eliminate debt in a shorter period of time.

The good news is that debt can only hold you back if you refuse to do something about the problem. Getting out of debt is far from easy and in most cases it is a long drawn out battle that few people want to engage in, however it must be done to find financial security. If you are feeling trapped by debt, here are some tips to help you get back on track financially.

• Evaluate the situation- The time to address debt is now. If you have been wearing blinders or avoiding the reality of your financial situation, it is time to face the music and devise a plan to eliminate your debt before you waste any more time and money fighting a losing battle. In order to find out what strategy will work best for your situation you have to sit down with the ever growing pile of bills and determine where exactly you stand in terms of debt and available income. Without taking this first step you cannot move forward toward debt free living.

• Change your habits- Unless you found yourself in debt due to situations beyond your control (sudden job loss, medical issues, divorce, etc) you are probably to blame for your current indebtedness. There is no point in beating yourself up over past mistakes, but you must acknowledge where you went wrong and make a committed effort to change your spending habits and how you manage your finances in the future.

• Compare debt elimination methods- Depending on your current level of debt and resources available to pay off that debt, you have several options to eliminate your debt moving forward. Whether you opt for aggressive repayment on your own, debt consolidation, debt negotiation or even the dreaded bankruptcy will all depend on your unique situation. Compare the different methods carefully to find out which is right for you.

• Take action today- Once you have carefully examined all the options available to you, pick a method and get started today. Each day spent agonizing over what you will do about your debt is another opportunity lost to begin paying it off- on way or another. Do not delay the inevitable any longer and get started as soon as possible.

Getting out of debt is something that each person dreams of, yet many people do not take the necessary steps to achieve. Having too much debt will trap you in a cycle of financial struggle that will never end until you take charge and address the situation. Avoid repeating this cycle indefinitely by facing the debt head-on and working toward eliminating debt from your life forever.

It’s true using debt settlement as a means to get out of debt saves you tons of cash in interest and fees.  Not only that, but by settling a debt you are actually being forgiven for a portion of your debt.

Bottom ine is that you will end up paying your creditors less than you originally owed them.  Not so with debt consolidation, as you will still be paying you full credit card balance and losts of interest to boot.  I was going to title this point You Save More Money, but that implies that you save money with debt consolidation, which is not really true.

2. You Get out of Debt Faster.

This is kind of a no-brainer.  If you start out owing a creditor $10,000, you settle your debt with them for  $5,000, then you end up only having to pay $5,000. And using the same brilliant math, you can pay off $5,000 faster than you can $10,000.

3. You are in Charge.

That’s right.  It may seem that since you owe the credit card company thousands of dollars, that they are in the driver’s seat.  But in reality, since the debt is unsecured, they can’t do a thing to you. Yea, I know they can sue you, but generally, that’s only if you are completely unresponsive to their demands for payment. Which of course, you won’t be because you’re looking for a settlement and working with them along the way.

In addition, the credit card companies are usually reluctant to sue because the fact is they will end up paying more for attorney time and court cost than you owe them in the first place.  They want to get at least a little green from you and they know that you’ll probably declare bankruptcy if they slap a lawsuit on you.

4. You’re not a Slave.

Guess what? Most debt consolidation companies are owned by groups of credit card companies.  Surprised?  When you hear a TV or radio commercial for a non-profit debt consolidation company claiming to “work with hundreds of creditors to help you get your financial life back in order”, it’s true.  Most, not all, are funded by these credit card industry organizations.

So the main objective of the debt consolidation companies is to keep you financially alive enough to keep you paying your bill to them.  Can you say, “Slave”?

5. Your Credit Score Bounces Back Faster.

This truth may be a bit of a shocker to those of you choosing debt consolidation to protect your credit score.  While it’s true that your credit score will suffer a good amount by settling your debt, it will come back faster because your debt will have been cleared.  If you take out a debt consolidation loan, or enter a debt management program, you still have a high debt-to-credit ratio well into your program.  It will take you years to get the balance down to a reasonable level where your credit score will start to grow back.

For example, if you owe $10,000 to a creditor and you settle for $4,000,  you can pay off that $4,000 within a year easily. After a year, your credit report shows no balance and a note on the account, “Settled for Less than Full Balance”.  If you owe that same $10,000 and choose debt consolidation, a year later your balance will be still over $6,000.

Believe it or not, your credit score will be higher with the zero balance and the note on your account, simply because your debt is gone.

Note: I’m simplifying a lot in this article, but the basic points are true. However, there do exist situations in which debt consolidation may be an appropriate choice.

Capital Debt Settlement is a debt management company based in Fresno, California. Operating since 2003, this company has over six years experience helping consumers overcome debilitating debt in their lives. They started out focusing on debt settlement but have since added debt consolidation as an option for consumers trying to get their finances back on track. Their goal is to use the experience and knowledge in the credit industry to help you regain control off your finances and start fresh without the burden of debt holding you back from achieving your financial goals.

Here are some quick facts about Capital Debt Settlement:

Company Founded:- April 2003

Years In Business:- 6

BBB Rating:- D-

BBB Complaints:- 2 complaints reported in three year reporting period

Fee Information:- unknown

Escrow Available?:- yes

Source of Funds:- client payments

Fee Structure:- see below (the program); fees vary per person and program

Avg. % Settled:- 30%-70%

Refund Policy:- unknown

Minimum Debt Required:- unknown

About the Company:

A file for Capital Debt Settlement can be found on the Better Business Bureau. The BBB currently has this company listed with a rating of D- with the reason for this rating based on the industry in which the company conducts business. In the last reporting period (36 month) the BBB processed a total of two complaints against this company both of which are currently listed as closed and resolved. Of the two complaints one has been resolved with acceptance from the consumer, the other has been addressed and resolved without acceptance from the consumer.

The company website also lists the following memberships or affiliations: The Association of Settlement Companies, International Association of Professional Debt Arbitrators, U.S. Chamber of Commerce and a report available through Dunn and Bradstreet.

The Program:

Debt counseling program- They offer the standard program which includes creating a repayment plan with your creditors to get your accounts in good standing while lowering interest rates and waiving fees and penalties. They do this by negotiating better terms with your creditors and establishing an affordable monthly payment which you send directly to them. In turn they will pay your creditors accordingly helping you keep your accounts in order and current. Clients enrolled in the debt counseling program can expect to repay their debt in full while saving money through reduced interest rates which will allow more of your payment to go toward the principle balance you owe. Clients enrolled in this program can expect to pay an upfront fee as well as monthly “management” payments throughout the program.

Debt settlement- This program has an entirely different process, end result and is offered only to clients who are unable to make their minimum monthly payments. Capital Debt Settlement will negotiate with your creditors on your behalf to reach a settlement of 30%-70% of the original amount owed. In the meantime, you will be making one monthly payment into a FDIC insured account which will be used for future settlements. Once an account has been settled, you are free from that debt and able to move on to the next account until all debt has been eliminated. Fee information will be disclosed prior to enrollment and include a series of payments throughout the first year and a half of the program.

To get started you simply have to fill out a form on the company website or contact Capital Debt Settlement via a toll free number listed on the site. You will then be eligible for a free consultation where you can determine which program is right for your specific situation.

Website Experience:

Unlike many reviews where I form an immediate “like” or “dislike” opinion, I find myself on the fence after visiting this website. The website itself is pretty basic, lacking the nifty tools, gadgets, newsletters, articles and various other information that is often found on websites in this industry. That is not necessarily a negative however, as it is more important what information is provided versus what is not present. In fact, when it comes to providing important and necessary information this website does a good job of covering important facts associated with the debt settlement process at least. The website is relatively easy to navigate with most information easily found in the most logical location (again, not always the case with many websites).

I have found a few reviews in other locations online with mixed results. Some people claim they have worked with the company and are pleased with the results, while others complain that they are not satisfied with the program in which they enrolled. As I have mentioned time and time again when reviewing companies, it is hard to determine if clients are unhappy because the company has not performed according to contract or clients do not fully understand what to expect when enrolling in a program.

Therefore I am not in a position to recommend clients either consider or steer clear of this company based on the information I have reviewed. I will say that being in business for six years, having only two complaints in three years and the fact that their website makes no attempts to mislead or confuse visitors speaks in their favor in my book. Of course don’t take my word for it, do your own research before deciding if this company is right for your financial situation and please let us know if you have experience with this company.

Conclusion

With a history dating back to 1958, Money Management International (MMI) has been helping consumers overcome financial hardships for half a century. MMI currently has over 125 branch offices located in twenty-two states with six call centers making it the largest full-service credit counseling company in the nation. This non-profit organization offers credit counseling as well as debt, budget and housing educational tools.

About the Company:

For clients considering MMI for help with financial concerns, you can find information for 30 different branches on the Better Business Bureau. For the purpose of this review we will not be covering the BBB ratings for each individual branch, however if you are interested in viewing a specific branch, simply visit BBB, click on “check out a business or charity” and enter www.moneymanagement.org in the url section to find the full list. MMI is a member of the National Foundation for Credit Counseling (NFCC) and The Association of Independent Consumer Credit Counseling Agencies (AICCCA). This company is based in Houston,TX.

The Program:

MMI offers personal credit counseling, debt management services, housing services, financial education services and bankruptcy counseling. With many locations throughout the United States you may have the option of speaking to a counselor in person or via telephone and the Internet. I was unable to find specific fee information on the website, however there are many services available that can help consumers get back on track financially. Credit counseling is available to help you better understand your current and financial situation including what you can do to improve your finances. The debt management service is designed to help you consolidate your high interest debt with the help of MMI. They will work with your creditors on your behalf to lower interest rates and/or waive fees, while setting you up with a lower monthly payment which is withdrawn directly from your bank account each month. Upon receiving your monthly payment they will then allocate payments to your creditors to ensure your payments get to the creditor on time every month. Whether you are looking for your first home or considering a reverse mortgage upon entering retirement, MMI’s housing services can help you make educated decisions when considering housing or mortgage options. You will also find many educational tools which help you better manage your finances. In the event you are already facing a financial hardship, MMI also has bankruptcy counseling and educational programs which help consumers facing an uncertain financial future determine if bankruptcy is right for them.

Website Experience:

The website for Money Management International is professional and easy to navigate. I enjoyed reviewing this website because even though they offer a ton of information, it is presented in a way that is not confusing or hard to find. You don’t often find yourself being pointed to the same page from dozens of different links which allows you to make good use of your time. I did not notice any mention of debt settlement services (which we normally review here at Leave Debt Behind) nor any indication of how much it costs potential clients who are considering using these services. The website does however offer many different pluses including: video gallery, live webinars, various financial tools & calculators and a blog which appears to be updated regularly. A quick search on the Internet did not reveal many complaints and the few that I found basically mentioned the effect being enrolled in a debt consolidation program has on your credit. For the record anyone considering any debt relief program should understand two things. The first being that many of these programs (depending on the method of reducing or eliminating debt) will be viewed negatively on your credit report. The second thing to remember that while having good credit is extremely important in our lives, if you have to choose between having good credit and drowning in debt or eliminating debt and taking a hit on your credit, in most cases it is better to eliminate your debt. After all, who needs excellent credit to qualify for good rates on mortgages or other loans when you have no reasonable way to pay for them? Just a thought.

As always, do your own research and read the fine print to ensure you are not signing up with a company or program that will only increase your financial problems versus solving them.

Debt Consolidation is An Option
Debt consolidation is a popular option for consumers to lower the total amount owed, making debt issues become resolved faster and more efficiently than if no debt options were used at all. Debt consolidation involves the individual or a third party negotiating with creditors to eliminate penalties, lower interest rates, and negotiate a lowered monthly payment for all debts the consumer incurred. At the end of the consolidation term, you are essentially free and clear of your debts that were consolidated. Most creditors will agree to such negotiations in an effort to avoid you filing for bankruptcy, which in turn would net the creditor nothing.  However, while resolution of the debt is good for you and your finances, it may not always be kind to your credit.

What Happens to Credit Scores Immediately?
Unfortunately the debt negotiation process is not one that will be over and done with in a single day. While your debt is negotiated, your open balances are still required to be paid. If you can not afford the monthly payments, creditors may begin suspending or closing your accounts. If you are late on payments or miss them entirely, your credit score will take another hit. This may continue to happen for the first few months until your account can be reported as being back on track once you have paid regularly for a few months through the consolidation program. Additionally, the closed accounts will alter your debt to credit ratio which can also have a negative influence on your loan.

What Happens To Credit Scores In the Future?
Since the process of debt consolidation negotiation can take months to complete, your credit will suffer for a bit during the down time. Once the process is well under way and you are making regular payments as per your agreement, you may start seeing an increase in your credit score, proof that your accounts are back on track. As you continue to have good payment history information reported back to the credit bureaus, your credit will continue to improve. If you learned a lesson and adopt better money management habits after you’ve considerably reduced your debts, you can continue to up your credit score and eliminate other debts on your own.

Let’s discuss both the benefits and the not-so-beneficial aspects of debt consolidation:

The Advantages of Debt Consolidation

Reduced Monthly Financial Obligations
When you pay off all of your debts with consolidation loan, you can end up saving a lot of cash because you now only have one payment to make each month toward your loan.

Lost Interest Rates
By paying off your debts in full, you are no longer accruing interest charges each month on your credit cards. You may also be able to qualify for a lower interest home equity loan to pay off your debts, which will also help to save you cash.

Easier Bill Tracking
Besides your regular monthly bills such as utilities, you will only have to write one check to a single creditor each month. It can certainly help your accounting practices more manageable and you can staft working on and focusing on a plan to a better, more secured financial future.

Tax Relief
If you use the equity in your home to consolidate your debts, you may earn additional tax breaks on the interest you have paid. Try doing that with your credit card interest rates.

The Disadvantages of Debt Consolidation

Ineligibility
In some cases, you may not even be able to find a loan to help you consolidate your debts because your debts are just too much. There will also be the desperate consumers who will take a loan that has outrageous interest rates just to get out from under debt.

Poor Money Management
One of the biggest risks many consumers face once paying off their debts concerns how they handle the extra money they now have each month. It can be much to tempting to spend that cash irresponsibly instead of having a savings plan in place.

Risk More Debt
When you pay off the debts of a credit card, it can also be tempting to start using your plastic again. Soon many consumers find themselves right back in debt without any way to pay it off, while still having to meet the payments of the consolidation loan.

More Expensive Route
When you take out a loan for consolidation, the terms of that loan may be much longer than your original debts would have gone. You may wind up paying more in interest in the long run, depending on the length of the loan.
Risk for Losing Collateral
When you take a home equity loan to pay off your debts, you stand a very real chance of losing your home should you default on your loan payments.

Depending on your personal financial situation and your money perspectives, debt consolidation may be the ideal choice for you to help with debt or it may be the worst idea ever. Overall, the decision on how to handle your debt is up to you – just as long as you are handling it. Do your research and explore all of your options before rushing to a decision because the creditor pressure is building; otherwise, you may end up losing your money, your home, and your financial future in no time.

Here are 9 sure-fire tactics for paying down and eliminating your debts:

Contact Your Creditors Now
You may already be getting the phone calls and the letters threatening further action on your unpaid debts. Now it is your turn to get in control of your finances. Contact the creditors you owe and let them know you are working to pay back your debts. Ask for their assistance directly and do not feel forced into doing anything you are not able to do – such as make a lump sum payment right away. Instead, see if you can work on lowering interest rates on credit cards to help with payments.

Get Outside Intervention
If you don’t think you can handle the negotiations on your own, seek the advice and assistance of debt consolidation or debt settlement companies, who can work to lower the rates and fees being charged on your accounts, giving you access to more reasonable payment terms. Deciding on which type of company will help you best is a personal decision.

Cut Costs Now
Even if you are working with a company to handle your debts, you also need to take some new direction with your personal finances. You need to cut expenses where you can by first tracking what you are spending and where. Cutting both big and small costs can help you find some more usable income than you might have realized. Create a reasonable budget and stick with it to help limit spending and increase savings and debt payments.

Pay High Interest Before High Balance
If you want to reduce your debts faster, prioritize your debts by the highest interest rates versus the highest balances. Accruing interest charges as you pay off your debts makes the whole process very slow.

Pay More the Minimums
If you are working on your own to battle debt, include in your budget more than the minimum amounts on payments due. Even adding $20 a month can make a big difference on how fast you pay down your debts.

Snowballing Payments
The snowball concept concerning debt essentially means you focus your efforts and additional cash paying down one debt at a time while still making minimums on the rest. Once that first debt is paid in full, its payment amount plus the regular payment goes towards the next debt and so on, until all of your debts have been paid in full.

Go Low Interest
There are many credit card companies that offer no or low interest credit cards for an introductory time period that are suitable for balance transfers. You transfer all of your higher interest credit card balances to one low or no interest card and work to pay off your balances before the introductory period is over. This can work if you have a plan to pay the balance before the normal interest, which is generally much higher than you can afford, becomes effective.

Borrow From Friends/Family
Mixing money with friends and family is not always the best idea. If you do have someone who is willing and able to help you satisfy your debts, you need to consider it just as you would accepting a loan from a bank. There should be an agreement in writing and a serious commitment to making on-time payments to repay the loan in the time alloted. Otherwise you risk losing key relationships over your debts.

Stop Spending
It is virtually pointless to start working hard on paying off debts when you continue to spend irresponsibly. In addition to your family’s budget, you also need to work on changing your financial habits for the good. You may need to take a refresher course on how to handle money. All your learning and financially-stabilizing improvements will help create some security and eliminate debt at the same time.

Some individuals will attempt to go at debt reduction on their own but find that negotiating with creditors to lower interest rates, stop fees, and change the terms and conditions of the original creditor agreement is just not possible with some companies, who are relentless in demanding payment. Consolidation may be the best choice for you. There are several ways you can consolidate your debts. Some of the most common methods include:

Do-It-Yourself Method
If you are looking to consolidate your debts and your credit is still good, you can opt to take out a loan to cover the entire costs of your debts. With the money your receive from the loan, you pay off all of your outstanding debts, leaving just one note to pay each month. Many people choose to borrow money against the equity in their homes or from other investment source. It is not almost the recommended approach for paying off debt but each individual must weigh the pros and cons from their own financial  perspectives.

Professional Consolidation Services
There are companies that specialize in working with you to pay down your debts. There are two major advantages to working with such companies. Number one – once you have contracted with a consolidation company, most creditors will deal with the company directly, preventing incessant debt collectors from contact you for payments. The second advantage is that consolidation companies will work with creditors on your behalf and in many cases can negotiate lower interest rates and the stoppage of fee accrual. Debt consolidation companies operate differently and as the debtor, it is your responsibility to find the right company for you. The consolidation plans will also differ but for the majority of plans, the theme is the same. You combine all eligible debts into one plan and make a monthly payment to the debt consolidation company. The company will then make the required payment to your creditors. This method will not only help you manage your payments and keep you consistent, it will also pay down your debt much faster (as in years faster) than if you were to continue making minimum payments on your own. Consolidation companies do have their drawbacks such as there are often somewhat high fees that go along with your regular payments. However, if you get a full understanding of how the consolidation plan will work, there should be no major surprises.

Debt consolidation can be a great resource for you to improve your debt situation. Choosing this option may help to prevent the need to file bankruptcy and will assist you in becoming debt-free instead of struggling under the weight of your bills.