Debt Consolidation is essentially a reorganization of debt. Under a debt consolidation plan, a loan is taken out and used to pay off various other debts; thus, the debts have been consolidated into one loan.

Debt consolidation is often used to obtain lower interest rates, but it has one major drawback. In most cases, debt consolidation transforms unsecured debt into secured debt. This means that a major asset (most always a home) is now the collateral for the debt.

Debt consolidation may allow a homeowner to take advantage of lower interest rates, but unlike Debt Settlement, 100% of the principal must still be paid back. And if the payments are not made, the home used as collateral for the debt consolidation loan will be at risk of foreclosure.

Call 1-800-810-8440 today for a free consultation to see how quickly you can become debt free.