When looking into whether it is in your best interest to either use a consolidation service, or go about a debt solution on your own, you need to understand exactly what a consolidation company can do for you along with how the debt consolidation runs in general.
This way you know what to expect with the service, and you are less likely to be vulnerable to judgmental mistakes.
What is debt consolidation? A consolidation plan is a solution for debt problems formed by many different debt companies all charging you monthly at one time, the debt grows increasingly fast due to rising interest rates, service fees to keep credit cards active, and much more.
How does consolidation work? Consolidation works by you and the consolidation company totaling up your complete debt between all companies, this total amount is needed to secure your loan with a personal asset of equal or greater value.
Then this sum of money is applied to the companies in which you owe debts to, to pay off those debts.
Then the consolidation company will create a monthly plan with you, which works with your monthly salary to slowly pay back this total loan with easy once a month payments.
Is it better to use debt consolidation or contact creditors directly? The answer to this question really lies in your current situation.
If you are in debt to only one single company the benefits of consolidation are less promising, meaning it may not be the solution for you and you should simply contact that company directly to discuss solutions.
But if you are in debt to many different companies over a long period of time, consolidation can save you a lot of money in which you may need to help feed and house yourself, or your family.
With consolidation you no longer worry about all the stacking up fees or having to pay towards many different debt balances at the same time.