Debt Consolidation Explained

Before you apply for our debt consolidation calculator, learn more about the process. We'll explain how debt consolidation works here.

The Process

Our debt consolidation calculator is only one part of the consolidation process. Here are the steps usually involved in debt consolidation.

1. We negotiate reduced interest rates with creditors. Before you even applied for our debt consolidation calculator, we negotiated reduced interest rates with most major creditors. We have a list of creditors that specifies the lower interest rate we have arranged with each creditor. When we use the debt consolidation calculator, your new monthly payments are based on these reduced interest rates not available to the public.
2. You become a customer, and we pass these rates onto you. Once you become a customer, we references our negotiated rate sheet to determine your new interest rates for your creditors. The debt consolidation calculator applies these lower rates to your creditors and debts, and the resulting amount is the monthly payment you will make to our service.
3. You make one payment each month to the consolidation service. After the debt consolidation calculator has tabulated your new interest rates, you will begin making payments. Each month, you will make one payment to one creditor, your consolidation company.
4. The consolidation service divvies up your payment among your creditors. Your consolidation service will take the payment you make each month and divvy it up among your creditors. This means that you will never have to deal directly with your creditors again, and that your bills will always get paid on time. The process will continue each month until you become debt-free.

About Unsecured Debt

Only those who wish to consolidate unsecured debt may access our debt consolidation calculator. Typically, creditors are more willing to negotiate to lower interest rates when the debt in question is unsecured. With secured debts, debt consolidation companies have much less leverage because creditors can just seize property to get their money. With unsecured debts, the worst creditors can do is get a judgment against you to garnish your wages, and very few even do that. Thus, your chances of successfully bargaining for a lower interest rate are much higher with unsecured debts. Don't include secured debts in the debt consolidation calculator. Check out the next page to see if consolidation is right for you.