http://www.seaofdebt.com/debt-reduction-program.html A debt reduction program may be just what the doctor ordered when it comes to reducing your debt. Which debt reduction program is right for you? en-us Sat, 26 Jul 2008 15:00:00 EDT Sat, 26 Jul 2008 15:00:00 EDT Weblog Editor 2.0 Weight reduction, debt reduction....it seems we are all trying to reduce something somewhere. You know there are a lot of weight reduction programs out there (Weight Watchers, Jenny Craig, the Atkins Diet, etc.) but what do you know about debt reduction programs? What You Need to Know When it comes to reducing your debt through a debt reduction program, the key is finding a good debt reduction program. There are some out there that will scam you. How do you know which ones are reputable? We won't lie to you--this will take some doing. It's more of a time-consuming process than anything. First, you do an Internet search on the term debt reduction program and see what comes up. Most debt management companies or sites will have forms you can complete and submit online, and within 24 hours they will send you recommendations. Once you have all the recommendations, compare them. Also compare the fees and services offered. Narrow it down to just a few companies, then call these companies to ask any remaining questions you might have. If they are very forthcoming with their answers and don't hesitate in the least, you know that that particular company is probably one you can trust. Once you've found a good debt management company, the counselor you get will really be able to fine-tune your situation and tell you which debt reduction program will be best for you. There are at least five to choose from--debt consolidation, debt settlement, a debt consolidation loan, student loan debt consolidation or a debt consolidation mortgage. Here's a brief description of each: Debt consolidation involves the debt management company contacting your creditors to get you massive reductions in your unsecured credit balances and interest rates. Then they bundle all your new, lower balances together and you make one monthly payment to the debt consolidation program instead of several to your creditors. This plan can have you out of debt in about five years. (It would take you 20 years or more otherwise.) Debt settlement is a debt reduction program that will probably score you the biggest reductions overall. The debt management company contacts your creditors and gets your debt reduced down sometimes as much as 60-80%. But you have to have access to a large sum of money. Let's say you owe $10,000 in credit card debt and you have access to about $4,000. Through debt settlement, a skilled debt negotiator might be able to get the amount you owe reduced to $4,000, but you have to pay it off all at once. With a debt consolidation loan, you need collateral. This debt reduction program involves a debt management company giving you a loan to pay off all your unsecured debts. Then you make one monthly payment to the debt management company. The benefit is that the interest rate is so low that you can have the loan paid off in five years. Student loan debt consolidation just bundles all of your student loans together into one loan with a much lower interest rate. In addition, the loan is spread out over more years so they payments are lower. Finally, a debt consolidation mortgage is the best debt reduction program for homeowners. If you owe $8,000 in unsecured debt, for example, you borrow that from the equity in your house and the $8,000 is tacked on to your mortgage. So if you owed $100,000 on your house, you would now owe $108,000. Sure, your house payment would go up slightly, but $8,000 over 30 years (or however many years you have left on your mortgage) is a negligible amount. Whichever program you choose, be proud of yourself for doing the right thing to try to reduce your debt. Sat, 26 Jul 2008 15:00:00 EDT