Once you've found yourself in debt it may feel like a downward spiral from which you don't know how you'll ever regain your footing. It's hard enough to find simple answers and may seem impossible when the collection agencies constantly call your house and threaten the security of you and your family. Ultimately your decision to choose debt consolidation loans or a consumer credit counseling program to consolidate credit card debt, should be based on your own personal financial situation.

The most important benefit of consolidation is that it can offer a fresh start on the road to a more healthy financial situation. Please visit our Free Money Tips page for more information on how to improve your household budget, lower your bills, and make more income.

Debt consolidation plans offered by credit counselors do not involve taking out a new loan. Most unsecured creditors have arrangements with credit counseling firms.

Once the credit counseling firm advises your creditor that you are signed up for debt consolidation, the creditor will in most cases reduce interest rates, drop late charges, and drop over the limit charges. The account is re-aged to show that you are current with your payments.

The reason that creditors are willing to do this is simple- they know that if you are seeking credit counseling, you are taking responsible action to avoid filing bankruptcy. If you file bankruptcy, unsecured creditors often receive nothing!

Keep in mind that you can consolidate unsecured debt with credit counseling without taking out a loan.

The advantages of a debt consolidation loan is that you may consolidate secured debts in addition to credit card debts and interest charges may be tax deductible (if the new loan is secured by a mortgage).

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