|
Debt Consolidation allows a person to combine several outstanding debts into a single account. This is generally done by replacing several existing loans with a single loan from a new lender. The new lender pays off the other loans and then generally reduces the
monthly payment by spreading the larger loan out over a longer period time. If the original loans were unsecured (not secured on property) and the larger loan is secured based on property, the interest rate of the new loan may also be significantly lower. An example of this would be consolidating several credit card debts into a single home equity loan.
|
